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Sperax OGs remember that once upon a time $USDs was a partially algorithmic stablecoin.
Now Sperax USD is 100% backed with stables and has no algo component anymore.
Why did this USDs design evolution happen?
Let's recall!
#Sperax_fundamentals
Now Sperax USD is 100% backed with stables and has no algo component anymore.
Why did this USDs design evolution happen?
Let's recall!
#Sperax_fundamentals
At its inception, USDs had an algorithmic component - it was collateralized by governance token $SPA (~6%) and stable collateral (~94%). Algo component's share was supposed to grow with time - together with USDs market cap growth.
In May 2022 UST-Luna has shown: though the algo-collateralization made the stablecoin ecosystem more scalable, it also made the system vulnerable to extreme fluctuations and to the death spiral with the stable's peg loss and governance token depreciation. coindesk.com/layer2/2022/05…
