SperaxUSD — 2022 Recap & 2023 Roadmap

The Sperax community should be immensely proud of what has been built. In December of 2021, our community took a massive bet. It was decided to launch SperaxUSD on Arbitrum, even though alternative layer 1 protocols were promoted as the future of DeFi.

At this time, alt L1’s were attracting significant TVL, economic activity and a massive user base. Their native token + ecosystem funds significantly fueled much of this activity. Looking beyond the short-term token hype, SperaxUSD was deployed on Arbitrum.

In 11 short months, the Sperax DAO shipped two protocols: SperaxUSD stablecoin and Demeter liquidity management. These protocols have attracted a committed community of users, investors and builders which will accelerate the development of permissionless finance. Together, we are building reliable and publicly accessible financial infrastructure.

Arbitrum transaction volume, total value locked, and economic activity increased tremendously over the course of 2022, bypassing all alt L1’s. The Sperax community is committed to building out our ecosystem on Arbitrum. Here’s the current state and what’s to come:

2022 Highlights

• USDs Minted: $36,625,839
• USDs Redeemed: $34,310,813
• Circulating USDs: $2,315,026.24
• USDs $1 Peg Maintained
• Total protocol revenue : $474,714
• USDs average APR: 8.97% APR
• SPA price ATH: $0.238
• SPA staking passes 120M SPA locked
• Liquid SPA Staking — plsSPA attracting over 70M SPA to be locked forever
• DAO Launch — 26 votes have occurred to date.
• Demeter Liquidity Managment Solution Launch — Genesis participation from GMX, PlutusDAO, Gains Network, Vela Exchange, Layer2DAO, Saddle Exchange, Handle Fi
• Sperax on top users list on Arbitrum week over week

2023 Focus

For the Sperax ecosystem to succeed, there must be emphasis on the key performance indicator of the protocol: USDs circulating supply.

When USDs circulating supply increases, so does the collateral (TVL) backing USDs. This collateral is controlled by SperaxUSD and generates revenue for the protocol. 50% of revenue collected is used to fund USDs Auto-Yield. The other 50% is given to SPA stakers like a revenue share. When USDs TVL increases, so does the value that is sent to SPA stakers — creating a positive relationship between USDs circulating supply growth and SPA price.

In 2023, activity will focus around increasing USDs trading pairs and USDs demand drivers to increase circulating supply and subsequently, revenue of the protocol.

Increasing USDs Trading Pairs

Sperax Gauge

Upon the conclusion of the Demeter Genesis program, Sperax will launch a gauge. Sperax gauge holds SPA incentives that are allocated to various pools which include USDs. The purpose of the gauge is to reward DAOs that use USDs within their DEX trading pair (GMX-USDs instead of GMX-USDC). More pairs results in a better experience for the traders of Arbitrum.

When using Demeter to launch a farm, a DAO can pair against USDs, this results in auto approval and listing on Sperax Gauge. Once listed, a pool qualifies for two types of emissions:

1. Voted Emissions — Every 14 days SPA stakers vote to allocate a SPA budget to pools listed on the Sperax Gauge.
2. Bribed Emissions — Every 14 days DAOs can bribe SPA stakers to vote for their vote. Bribes are paid in their native governance token.

Future iterations will include a completely permissionless emission, allowing any DAO to earn SPA based on the USDs TVL int he pool without any bribe or vote.

Until then, let the SPA wars begin. ⚔️

Gauge Genesis Campaign

Similar to the Demeter Genesis Campaign, multiple DEXs will be featured as Sperax Gauge Genesis partners. Any pool that is launched on these DEXs that features USDs, is auto-approved to the Gauge.

DAOs that participate in Genesis benefit from a SPA allocation for governance plus bonus SPA to incentivize USDs TVL on the partner DEX.

Reach out to Alec Shaw (Twitter: Alec_Sperax TG: AlecShaw) to join the Sperax Gauge Genesis campaign and list your DEX on Demeter.

Demeter v2

Demeter will soon feature new ways to incentivize and structure exotic liquidity campaigns. We have begun testing novel systems with Bond Protocol, Revest Finance and other partners. New DEXs coming online allow for custom liquidity curves which could result in IL covered positions and more. We will build whatever flavors of incentives deemed necessary by the Arbitrum community.

Why To Focus on USDs Trading Pairs

• Liquidity moat: As USDs is already traded against GMX, PLS, gDAI and other tier 1 Arbitrum tokens, liquidity and routing benefits will create a competitive moat around USDs. When trading fees are cheap thanks to this, USDs becomes the de facto stablecoin of Arbitrum.
• Chainlink Price Feed: Once adequate TVL is acquired on these pools, Chainlink has committed to launching a USDs price feed. When the price feed is live, USDs can be listed as an asset to lend or borrow on dapps such as Aave and Compound or collateral in GMX’s GLP product.
• Auto-Yield Boost: All USDs is backed 1:1. All of this collateral backing is generating yield, but not all the USDs receives the yield. USDs in smart contracts (like trading pairs) are exempt from Auto-yield. This creates a boost effect. The more non-rebasing USDs lets us build new USDs yield products, like Passive Vaults.

Non-Trading Pair Demand Drivers

USDs Passive Vaults

To bolster USDs demand, we are launching fixed-lockup USDs vaults. Users deposit their USDs into the vault where the USDs is locked. The longer the lockup, the larger the bonus. This yield is generated organically by reducing yield of liquid USDs or tx fees from specific stablecoin pools. This organic rate is boosted with additional rewards paid in veSPA. This SPA is locked to reduce selling pressure while offering USDs Vault users the ability to participate in SperaxUSD governance.

This means that locked USDs could be earning 16% while unlocked USDs are earning 4%. All parameters will be discussed publicly on the forum and voted on via snapshot.

USDs As A Treasury Asset

Sperax has begun the expansion of USDs as a DAO treasury asset. By keeping USDs in their treasury, DAOs benefit from automatic yield payments up to 11% APR. This is uniquely beneficial for multiple reasons:

1. Diversify treasury into stablecoin
2. Native interest rate approaching 11%
3. No active treasury management required (reduce centralization risk)
4. Promotion from partners at Bond protocol

This has worked well with our partner, L2DAO, where they sold a L2DAO bond in exchange for USDs. During the Sperax pilot bond program, SPA was also sold for USDs. These programs sold nearly $6,000 worth of USDs bonds in the first week. Layer2DAO treasury now holds yield bearing USDs as a treasury asset!

This strategy will be replicated across Arbitrum DAOs. Future versions of this will feature the buyback lever. When the buylack lever is pulled by the DAO’s treasury, Auto-yield will fund a buyback of the desired ERC20 token on the DEX of their choice.

Perpetual Protocol Collateral Integration

Perpetual protocols rely on a basket of collateral for traders to trade against. Without this pool of collateral, traders wouldn’t be able to open up large positions. The value of collateral is directly tied to the size traders can put on. This results in extremely sticky liquidity. As more collateral is deposited, larger trades can happen which drive more rewards to the collateral pool.

This means that when USDs is listed as collateral on perp exchanges, this should be sticky collateral as trading demand historically remains constant. GMX and VELA are arealy in talks for integration.

Decentralizing Operations

In 2023 Sperax will be open sourcing the SperaxUSD code repo. This will be done once all processes are decentralized including rebasing, harvesting rewards and distribution of rewards. This means that functions can be called by the community. If they aren’t called by a specified time, Gelato contracts will execute on behalf of the community.

Contributor Grant Program

During the bear market, the traders leave and the builders stay. Launching a community contributor grant program during the bear market provides unique opportunities for Sperax DAO and contributors.

For SepraxDAO, we are funding contributors who have proven resilience and remain building through the bear market. These users are less swayed by price and more aligned with the protocols long term vision.

For the contributor, you have the opportunity to acquire far more units of SPA due to radically decreased valuations. For the same $10,000 contribution, in Jan of 2022 this contributor would only receive 100,000 units of SPA.

At today’s valuation, this contributor would earn 2,000,000 SPA. If this contributor holds the SPA, and hypothetically if the SPA returned to Jan 2022 valuations, this user would be holding $200,000 worth of SPA. Bounties and grant criteria will be published as needs arise.

Conclusion

2022 has brought us back to our roots, reminding us of why we are building a decentralized financial system in the first place. 2022 reminded us why we fell in love with the radical agency that crypto offers. As a direct result of centralized actors, honest investors were forced to pay the price in 2022.

It’s clear that a decentralized, trust-less financial system isn’t just nice to have, but it’s a must have. In 2023 we will continue to build an unstoppable defi ecosystem on Arbitrum, which may be the only way to save ourselves from the greed of centralized actors.

About Sperax

Sperax USD is a stablecoin and yield automator on Arbitrum. Hold $USDs and earn Auto-Yield. Stake $SPA to govern the collateral investment strategy.

Read more at sperax.io and join the Sperax community!

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