Author(s): Sperax Core Team
Reference: This proposal
Created: 08/22/2022
Labels: #Product Features
The SPA buyback contract decentralizes the SPA buyback process while adding a boosting mechanism to continuously grow USDs TVL with protocol revenue. Protocol revenue (yield from USDs collateral and USDs redeem fees) will be swapped for collateral used to mint USDs. The freshly minted USDs used for buybacks gets deposited into the Buyback contract. Any users or external wallet can sell SPA tokens for USDs using the buyback contract. SPA sold to the protocol is used for veSPA staking rewards.
Currently the yield generated in the form of various tokens is used to buy back USDs from various decentralized exchanges, depending on reward token. Instead of buying back USDs, yield can be converted to collaterals which can be used to mint USDs. This will organically grow USDs TVL, forever.
Users and bots will be able to view the USDs balance in the Buyback contract and can sell their SPA tokens for USDs. Staking reward distribution happens every week and above steps are executed manually every week. So automating this process is critical and will save several man hours which the Sperax foundation can otherwise spend in building other critical product solutions.
Buyback Contract will have three main functionalities
The Sperax Dapp front end will have a separate page where users can see USDs amount in the buyback contract. They can buy the USDs using SPA.
Example :
Sperax protocol deposits Frax and VST into the Curve pool and then stakes the LP token in the Frax gauge to earn FXS and VSTA tokens. Protocol earns FXS and VSTA token.
The buyback protocol can have a discount parameter which will allow the protocol to sell tokens at a discount to the market price. Discount parameter will be set to 0 in the beginning and can be changed later on. In future, the community will have the power to increase the discount parameter to incentivize the buy back process.