USDS and Sperax behind it

2022-09-08, 07:03

TL;DR

USDS is a stable digital currency that is linked to the value of US dollars through Bitcoin acceptance.

The main advantages of USDS are the adoption of fixed interest, more efficient utilization of capital and complete decentralization.

Sperax introduces the embedded financial layer, which provides developers with the scalability to develop distributed applications and business models, and enables them to associate with real-world financial transactions.

Sperax hopes to improve the financial situation of the world's more vulnerable groups and open up a better path for a decentralized world.

What Is USDS？

USDS (USD Standard Token) is a stable digital currency (1 USDS = 1 USD) that is linked to the value of US dollars (USD) through Bitcoin acceptance. USDS is an accounting voucher based on BTC acceptance, which can assist in BTC trading and circulation. Every USDS can be exchanged for BTC equivalent to one dollar according to the real-time price of BTC spot in the compliance exchange.

USDS can only be obtained by selling BTC, and can only be redeemed by buying BTC. USDS is issued on the basis of Ethereum ERC20. Every issuance and redemption of USDS is decided by the user according to the user's wishes. It is a 100% transparent and reliable accounting tool.

USDS combines the advantages of the existing stablecoin design. USDS has the price stability advantage of explicit collateral, but it adds the scalability advantage brought by the stability of some algorithms. This mechanism design produces a highly scalable, detrustless and decentralized stablecoin protocol, which runs completely on the chain.

In short:

USDS is a decentralized stablecoin that tracks supply demand and earns interest from it;
USDS combines the arbitrage function of centralized stablecoins with the anti-censorship function of stablecoins;
Due to the decentralized arbitrage mechanism, USDS will grow with the increase of demand;
When the market demand increases and the USDS price rises above 1 dollar, traders can profit from selling the minted USDS.

What Are the Advantages of USD

Creating scalable stablecoin is not as simple as printed cash. They must get some kind of support: cash, cryptocurrency or the trust of the community. Meanwhile, exchange rate fluctuations must be maintained, so it is difficult to maintain each design scale.

Presently, the scalable stablecoin currently relies on the central institution. Due to the lack of arbitrage opportunities, decentralized alternatives cannot be expanded. In order to ensure that stablecoin really has strong anti-censorship and scalability, a decentralized arbitrage mechanism must exist, so the advantages of USDS are also highlighted:

1. Fixed interest: USDS will use representative and audited decentralized financial applications, such as the leading income aggregator yEarn, to earn collateral interest. And no matter how the market changes, the interest will continue to be distributed to the holders of USDS.

2. Capital is more efficient: USDS can operate normally with only a small amount of capital. And allows the protocol to be effectively extended to meet the needs of large-scale adoption. Maker needs 150%; Synthetic 400％; Sperax protocol: less than 100%.

3. Completely decentralized mode: USDS is anti-censorship, and no one can completely control it. The whole network is controlled by SPA token holders. With the gradual expansion of the scale, the Sperax community will decide the future collateral and token bridges.

Sperax Behind USDS

Sperax is committed to building a new generation of decentralized financial infrastructure. Financial services are provided in the public blockchain stack through the hybrid stablecoin USDS and distributed financial services. In the infrastructure layer, Sperax has developed a more secure and efficient BDLS protocol than other Byzantine fault-tolerant protocols. In the financial service layer, Sperax has designed a native stablecoin system to provide users with convenient financial services in the future through cooperation with licensed financial institutions.

Sperax is a blockchain based on proof of stake (POS) and adopts the BFT consensus protocol, which gives priority to security and activeness and aims to promote the development of the blockchain ecosystem by providing a higher level of security in the open network.

Most PoS based blockchains use BFT to determine the unique next block. However, most of the BFTs used in the currently deployed PoS blockchain are designed based on overly idealized assumptions (such as persistent security and reliable peer-to-peer channels), which are usually not tenable in the Internet environment, such as when a denial of service (DoS) attack is launched.

In the token economic design, Sperax introduces the embedded financial layer, which provides developers with the scalability to develop distributed applications and business models, and enables them to associate with real-world financial transactions.

Meanwhile, Sperax has launched its first community application - Sperax Play. Play is a decentralized wallet App designed to give users full control of their accounts. In the future, it will develop into a decentralized community for Speraxians and crypto enthusiasts.

The Spice Trade protocol introduces a revolutionary new concept: a stablecoin that automatically adjusts and prevents inflation. Every month, with the release of CPI data by the US Bureau of Labor Statistics, the index of iUSDS will be adjusted according to inflation (or deflation). Spice aims to create a stable currency to maintain the relative purchasing power of the US dollar.

What Can You Do with USDS

Imagine the following scenario: Peter, who lives in Cuba, has been troubled by the continuous depreciation of the local currency caused by the abuse of local currency by the local government.

In order to protect personal assets from depreciation, Peter invested them in Bitcoin. However, he soon realized that even if BTC is the mainstream cryptocurrency, it still has strong volatility and may face rapid depreciation caused by the market crash at any time.

Fortunately, Peter found USDS and decided to invest in it. What he didn't expect was that he started to gain profits by simply holding USDS!

Once users start using USDS, they can obtain a sustained return on investment (income) without being affected by market conditions. Unlike other stablecoins, USDS do not rely on higher risk leverage (such as venture capital and buyout funds) to generate income. Instead, it relies on fees charged to dealers, the Sperax DeFi aggregator and other protocols. Therefore, it is higher than the traditional financial savings rate.

In addition, USDS is the main collateral of Sperax derivatives (synthetic assets or trading options).

Peter can invest in American stocks without holding any stocks. All he needs to do is lock the USDS in the Sperax protocol to generate synthetic assets.

If he wants to take higher risks and speculate on the market trend, he can buy the option contract of Sperax protocol.

What's more exciting is that if Peter wants to focus on long-term growth, he can deposit USDS into Sperax and ask for the establishment of a portfolio.

Last but not least, USDS is a convenient payment method. Whether locally or globally, Peter can always use USDS to pay for merchants' goods and services, similar to credit cards or mobile payment applications, but the difference is that USDS is faster and cheaper. This is particularly beneficial to people in countries with strict censorship and restrictions. Since the USDS are decentralized and not restricted by the review system, the capital flow can be faster without capital control.

Conclusion

"Connecting money from the real world to the digital economy" is a slogan written on Sperax's official website. Sperax also hopes that through DeFi, the financial situation of the weaker groups in the world can be improved. Even if the goal of equality may not be achieved soon, at least it should strive for an equal opportunity.

Similarly, only by cooperating with other blockchain projects in the world can we open up a better path for decentralization. Only by working together can we realize the democratization of financial services as soon as possible and move towards the truly decentralized "Utopian" world that people who truly love the blockchain world expect.

Author: Gate.io Observer: Byron B. Translator: Joy Z.

Disclaimer:

* This article represents only the views of the observers and does not constitute any investment suggestions.

*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all other cases, legal action will be taken due to copyright infringement.

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