Thread by @SperaxUSD

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

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…

To make the death spiral technically impossible, Sperax implemented a radical prevention measure.

The algo-component has been removed from USDs' basket of collaterals.
Now the USDs redemption releases stable collateral - $USDC, $FRAX, $DAI, or $VST and does not mint SPA.

This design change made USDs 100% collateralized.
It is not an algo-stable anymore.

Now the users are protected if a massive redemption happens for any reason. The users will get back collateral - reputable stables pegged to $1.

Mint or swap USDs here: app.sperax.io
Auto-yield for holding USDs: APY ~11%.
LP strategies with USDs: demeter.sperax.io

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