How this stablecoin has high yield strategies built into its design mechanism


Deployed on Arbitrum, Sperax USD (USDs) entered the DeFi space as the “first auto-yield stablecoin.”

The Sperax protocol leverages a dual token system with a stablecoin ($USDs) and a governance token ($SPA).

CryptoSlate talked to Sperax, who explained what makes the hybrid stablecoin special and in which aspects $USDs harnesses the power of DeFi to deliver passive yield to stablecoin holders.

Founded in late 2019, Sperax describes itself as a “global technology company that aims to connect people with modern money through open-source, decentralized finance protocol deployed on public blockchains.”

PIC2–Generating interests for UDSs collaterals–through a DeFi aggregator (Source: Sperax)
PIC2–Generating interests for UDSs collaterals–through a DeFi aggregator (Source: Sperax)

Crypto-collateralized algorithmic stablecoin

“Primarily, users may see $USDs as a savings account with a significantly higher return than banks can offer to earn passive income. Secondly, $USDs will be used for transacting in daily lives in the near future,” explained Sperax, noting that the stablecoin is native to Layer 2 Arbitrum.

The scaling solution’s extremely low transaction fees help guarantee $USDs stays at its one dollar peg, Sperax added.

The stablecoin’s dynamic reliance on two mechanisms means that $USDs is explicitly collateralized by a pool of existing cryptos and implicitly by utilizing $SPA to stabilize the uncollateralized component algorithmically.

“Each USDs minted requires our governance token ($SPA) to be burnt, which means that increased $USDs circulation in the market will lead to $SPA scarcity. This is one of our major breakthroughs that fundamentally boosts USDs use cases,” clarified Sperax. 

This innovative hybrid design combines the best of the two mechanisms, offering a higher level of both stability, and scalability. 

PIC1- Minting $USDs (Source: Sperax)
PIC1- Minting $USDs (Source: Sperax)

But how exactly does $USDs compete with DeFi yields?

“​​High yield on stablecoins is predominantly captured by those with both financial and technical expertise to put their stablecoin to work in DeFi,” commented Sperax, adding that Sperax succeeded in implementing yield strategies into the stablecoin itself.

“This means that if the crypto money markets return 10%, $USDs holders get this yield directly in $USDs, without having to stake or claim. Just hodl and earn,” Sperax noted.

As the collaterals that users locked are re-invested through DeFi aggregators to generate continuous interest–$USDs adopters can earn passive income from the protocol.

Past and future milestones

“We learned that even though the yield farming strategy is automated, we still need to make it extremely easy for users to acquire $USDs and $SPA,” said XY, explaining that in order to solve this, Sperax is teaming up with fiat on-ramping partners like MoonPay–allowing users to get Sperax assets with a bank or cash credit (CC).

“We are investigating new collateral investment strategies to increase the auto-yield APR. This will be a primary role of $SPA holders in the future DAO governance,” added Sperax.

Sperax further explained that as the value managed by the protocol grows, SPA holders can vote to deploy this collateral into new strategies.

“Think of this as an on-chain fund, managed by a DAO, with the objective of increasing auto-yield and an emphasis on risk aversion,” Sperax explained, noting that new collateral will be added and cross-chain collateral deployment is possible in Sperax’s future.

The protocol’s governance token, $SPA, was listed on Huobi in 2021, with more listings t come in 2022. Following suit, Sperax launched $SPA and $USDs farms.

These farms were the first pools on Uniswap V3, allowing the minting of the first five million $USDs.

To further boost $USDs use cases, Sperax also recently launched an incentivized $USDs Metapool with Saddle Finance, an automated market maker (AMM) optimized for pegged value cryptos.

“Our rollout strategy is slow and steady, we plan on a sustainable roadmap,” said Sperax, explaining the team wants to avoid the megahype, since such scenarios often result in crashing and burning.

“We are the 3rd most liquid trading pair on Uniswap Arbitrum, with over 8M of deposits,” Sperax added, noting that the Sperax community has grown tenfold–” all organically since the stablecoin launch.”

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