Partnership with Sperax.io: Bridging Interest Bearing Stablecoin To Harmony

Funding Proposals Grants
1

## Name of Project / DAO / Company
Project: http://sperax.io/USDs

## Application type
[Ports, Partnership]

## Proposal overview
Sperax USD is a hybrid stablecoin that is mostly backed by explicit, protocol-owned collateral, and partially by algorithm. Sperax USD uses ETF/Tether Foundation style arbitrage to ensure a tight peg at $1. This keeps the price of USDs in a tight band around $1.00, offering users the stability benefits of explicit collateral stablecoins with the scalability benefit of algorithmic stablecoins.

Collateral in the protocol is deposited in Aave markets to earn returns. We believe that the launch of our liquidity incentives for USDs will cause at least $15M in liquidity to be deposited into Aave.

About the LM campaign
Our mobile app, Sperax Play, we are onboarding our 600k users into our stablecoin and we don’t want to mitigate slippage. Customers will be transferring from centralized exchanges with size, and want to easily transfer from their stablecoin or major asset to USDs.

To ensure there is adequate liquidity, we will be allocating 250M SPA from the bootstrapping liquidity budget to compensate early market makers for their generous contribution to the Sperax ecosystem.

Once adequate liquidity is reached on Arbitrum, Sperax Foundation and Sperax DAO will allocate SPA to trading pairs on partner layer 1 ecosystems.

Positioning within Harmony Ecosystem
Once a liquid market is established on Hamony’s DEX, achieved through liquidity incentives, dApp developers on Harmony will have a few tool at their disposal: a high interest savings account that acts as both a store of value and a medium of exchange.

Sperax Play mobile front end app, can act as a conduit for Southeast Asian and US community to access Harmony products. The Sperax community is very active and looking for venues ways to interact with the crypto and defi ecosystem in a fun, user friendly way. As we expand Sperax Play’s financial service offerings, Sperax outsource financial services to Harmony dApps, expanding optionality for Sperax users. We will list the rates offered, with a “powered by Haromy X” logo next to it.

Project History
The project launched and funded in 2019. The project is currently using snapshot voting for governance. The project is working with Compound governance contracts to begin the transition to a fully functional, decentralized DAO.

Sperax Play Key User Metrics
Week of September 20
total users increased by 8%↑ to 611.13k users
sessions increased by 14%↑ to 916.02k sessions
page views increased by 15%↑ to 2.89m page views
new user count increased by 19%↑ to 17.2k new users

Community Metrics
Twitter: 36k Followers
Telegram: 13,000 Member Community
Discord: 3,000
Sperax USD Twitter: 4,000+ (1 month old)
Email Newsletter: 56,0000

## Proposal ask
Harmony to match a liquidity incentive budget provided by Sperax.io. Our proposal is to match 25M SPA worth, at an exchange rate of $0.05 this is $1,375,000

At todays exchange rate of $0.15, Harmony would provide ~9,100,000 ONE tokens for the incentive budget.

## Metrics for success
TVL of the stablecoin-USDs pool

4 Likes
2

Thanks for the proposal. A few questions:

  1. Can you describe more details on the liquidity incentive program?
  2. Please also add in more detail what’s the benefit to Harmony ecosystem and community.
  3. What’s the estimated TVL we want to achieve with this program? (could be based on previous campaign of yours if any)
2 Likes
3

“Our mobile app, Sperax Play, we are onboarding our 600k users into our stablecoin and we don’t want to mitigate slippage.”

could you post the user data on this forum?

2 Likes
4

@rongjian Thanks for your reply, answers below:

  1. Can you describe more details on the liquidity incentive program?
    -This program is following the Sperax Genesis Campaign, which is allocating 250M to incentivize the minting of Sperax USD on Arbitrum.
  • The cross-chain program is designed to incentivize the deployment of Sperax USD, interest bearing stablecoin in alternative layer 1 ecosystems for dApp integration.
  • The collateral pool resides on Arbitrum, but the Seprax USD is minted on other chains.
  • Sperax has a budget of 250M $SPA reserved for all partnerships in the cross-chain liquidity campaign.
  1. Please also add in more detail what’s the benefit to Harmony ecosystem and community.
  • New profit opportunities for Harmony stakeholders
  • Access to a decentralized, interest bearing stablecoin
  • Sperax to pay users to lock liquidity in a Harmony decentralized exchange
  • Access to a new user base of 600k users from Sperax Play community
  • Future collaboration/integration with Sperax Play mobile application
  1. What’s the estimated TVL we want to achieve with this program? (could be based on previous campaign of yours if any)
  • Using the same distribution design as USDs genesis campaign on Arbitrum, we can expect the following liquidity numbers:

Sperax contributes 5M SPA matched with 1.3M $ONE = $1,600,000 TVL
Sperax contributes 15M SPA matched with 4.8M $ONE = $4,800,000 TVL

This value would only increase as demand for USDs in Harmony dApps increases.

2 Likes
5

I am of full support for this proposal. Any questions, contact me on Twitter. I am an author at Entrepreneur.com and would love to cover this Partnership within an article, looking forward to the discussion here! :smiley:

1 Like
6

I think USDs will bring huge value to Harmony ecosystem. USDs’s core research team is from Terra and USDs will become one of the leading stablecoins in the industry soon.

2 Likes
7

Let me clarify: We want to mitigate slippage for our users. We will be delivering a high-interest USD based account powered by USDs to the users.

Many users will make large purchases, we don’t want any slippage for these users, regardless of what chain they choose to use.

Here is user information on the last 12 months.
COUNTRY USERS
India
141K
China
76K
Vietnam
67K
United States
62K
South Korea
48K
Nigeria
46K
Indonesia
29K

Screen Shot 2021-10-18 at 10.20.58 AM
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1 Like
8

I am a huge supporter of this proposal and believe it will help grow Harmony’s ecosystem and value proposition throughout the crypto space. If there is anything that we as a community can do to further support, please let us know! When could we move forward with this proposal? Any updates on timing?

9

@Alec_Sperax thank you for choosing to deploy on Harmony. The app onboarding is quite typical and has been done as well as you could using current mnemonic-based approach.

Questions:

  • What’s the “high interest” savings account look like in terms of APY and how is that achieved?
  • What happens after liquidity is mined… meaning why would the community stay?
  • Why do users need to return to the app daily to “Tap” once? (I read this on the app store reviews)
  • Has USDs been battle tested before with flash crashes?
  • What does “Snowball” do? Is it really using my phone’s CPU/GPU?
  • How is Arbitrum’s liquidity faring right now after the initial incentives? (did folks mine then leave)
  • Can you share how “sticky” the friends invite loop is? (looking for virality / “k”-factor here)
  • How did you come up with the prediction that $15M liquidity will be deposited into Aave?

Looking forward to hearing from you soon.

10

This is very promising project. :+1:t2:

11

How do you ensure all of the farming rewards won’t be dumped on small holders by larder liquidity providers? I generally support this proposal looking forward to next steps!

12

@Alec_Sperax reached out to you to discuss this further

13

I would like to address the proposed budget after some recent price changes. Our updated proposal is the following:

Sperax and Harmony communities each provide $1.2M worth of rewards to the campaign. The amount exchange rate to be set at a predetermined date agreed by both parties.

Example At Today’s Exchange Rate:

$0.054/SPA = 22,222,222 SPA

$0.353/ONE = 3,399,433 ONE

Reference project deployment: During the partnership between Harmony and Sushi, $1M in $ONE was allocated toward liquidity incentives for $SUSHI on Harmony on June 30th. The exchange rate for one $ONE was $0.067. Roughly 15M tokens of ONE were allocated to the incentive budget. We will be asking for only 3.4M tokens or 22.36% of tokens allocated to the Sushi campaign.

We are eager to hear your thoughts on this updated proposal and if you have any counteroffers!

14

*** What’s the “high interest” savings account look like in terms of APY and how is that achieved?**

The SperaxUSD yield aims to be multiples higher relative to industry-leading traditional banking alternatives. The yield is generated via protocol controlled collateral invested into defi yield aggregators. We are starting with Cream.finance. Eventually, new collaterals will likely be added that might utilize a different aggregator, or a new aggregator is selected by the DAO.

*** What happens after liquidity is mined… meaning why would the community stay?**

The community will be enticed to stay because we intend on working closely with dApps in the Harmony community. We can offer Harmony users an interest-bearing stablecoin without having to stake, proving rich composability for USDs holders on Harmony. We envision this being integral in gaming applications on Harmony, functioning as a metaverse savings acct.

*** Why do users need to return to the app daily to “Tap” once? (I read this on the app store reviews)**

We did this to gamify the onboarding process. As users check into the mobile app by tapping, they earn in-app loyalty points called XP. Users can spend this XP in the in-app raffles. NFTs and physical goods like gaming systems are raffled off through this system. Over time new use cases for XP will be introduced, we are open to community suggestions on other possible use cases.

*** Has USDs been battle tested before with flash crashes?**

So far only in simulation. However, our diverse pool of collateral is designed to be resistant to attacks in two ways. First, when minting Sperax USD, the protocol accepts a small amount of governance token for collateralization. Instead, the protocol will require upwards of 95% of less volatile tokens like ETH, USDC, Tether and DAI. Second, the protocol has a dynamic swap fee that makes the redeeming of Sperax USD expensive during periods of panic. This makes a bank-run style event unprofitable. We will have a report published shortly, and we will allow for Sperax USD to operate on Arbitrum for a few weeks before deploying on Harmony.

*** What does “Snowball” do? Is it really using my phone’s CPU/GPU?**

No, it is just a gamified onboarding mechanism.

*** How is Arbitrum’s liquidity faring right now after the initial incentives? (did folks mine then leave)**

The farms are launching in November, we will use these farms as a pilot for how to best deploy on Harmony.

*** Can you share how “sticky” the friends invite loop is? (looking for virality / “k”-factor here)**

We have found it to be extremely sticky. With 600k total users, we have 200k monthly active users. This is all before the launch of our stablecoin and the app having minimal features besides decentralized wallet and XP collection.

*** How did you come up with the prediction that $15M liquidity will be deposited into Aave?**

With the way our liquidity incentives are structured, at the current exchange rate of about $0.055, all SPA rewards would be reserved for the whole 6 month duration if $15M of liquidity was locked in the stables farm. Although this number can increase with SPA appreciation or LP’s not locking for a full 6 months.

2 Likes
15

Cool, scheduled time for Friday. I also responded to your initial questions in this forum!

1 Like
16

Our current approach is to heavily incentivize lockups. Current model used at Sperax is a 2.5x bonus for 6 month lockup. Boosting the APR for the stablecoin farm from 15% to 38%

1 Like
17

Excited to see more Defi 2.0 projects on Harmony!

18

Thanks Alec. Looking forward to hearing more about Sperax’s plans

1 Like