SIP-32: SPA Gauge Starting Budget and Inflation Rate

Title: Set SPA Gauge Starting Budget and Inflation Rate

Author(s): Sperax Team

Reference: Arbitrum AMA Jan 30, 2023

Created: Jan 31, 2023

Labels: [#Governance, #LiquidityMining]

Simple Summary

As the Demeter genesis campaign comes to an end, the SPA Gauge will take over the responsibility of distributing SPA to liquidity pools. How much SPA emitted to each pool is determined by a monthly gauge vote by veSPA holders. Protocols can bribe veSPA holders for votes. This proposal suggests the Sperax treasury fund one year of gauge activity, the total campaign would inflate the circulating supply of SPA 7%.


The current circulating supply of SPA is 1.593 billion tokens, which is 34.5% of the current total supply (total supply reduces with SPA burn). SPA from the SPA gauge are distributed with every block, ready to be claimed by USDs and SPA liquidity providers. The SPA budget will start at 12.435M SPA every 30 days and reduce by 20% every 90 days.

SPA inflation from the SPA gauge is distributed to liquidity pools according to the results of the monthly gauge vote. The number of SPA distributed depends on the SPA budget. The budget will start based on the current emissions rate and reduce by 20% every 90 days. During the first year, the total inflow will be 110 Million SPA. This initiative would inflate the SPA supply by 7% over the next 360 days.


A significant portion of SPA is held within the SperaxDAO treasury and must be distributed to continue maturing the protocol.

This can be done with four primary focuses

  1. Decentralize SPA governance

  2. Incentivize the minting and depositing of USDs into liquidity positions

  3. reason for Arbitrum DEXs to promote USDs trading pairs

  4. Ensure deep liquidity of SPA and USDs


The SPA gauge needs a starting budget for veSPA holders to allocate with votes and bribes. When considering budgets to begin the campaign, we will use current emissions and reduce aggressively with time.

The soon to be concluded Demeter Genesis campaign matched partner rewards according to $ value.

When the rewards for the last refill were calculated (Jan 19,2023), the price of SPA was $0.0039, nearly an all time low. This resulted in the SperaxDAO emitting the most SPA per day compared to any other time in protocol history.

Let’s look at a breakdown of the current weekly SPA emissions to Demeter pools. This is the proposed starting emissions rate for the SPA Gauge. The idea is to start with the highest emissions, reducing every 90 day epoch.

Currently, 414,500 SPA / day are distributed to the pools being added to the gauge:

GMX/USDs 161k/day

PLS/USDs 31k/day

ETH/USDs 55k/day

SPA/USDs 78.5k/day

USDC/USDs 20k/day

SDL/USDs 16k/day

L2DAO/USDs 38k/day

fxUSD/USDs 15k/day


Reducing Inflation In 2023

To attract early usage of the gauge and to make bribes lucrative, the starting budget will start high and after every 90 days, decrease by 20%. This rate is subject to change via SIP. This rate of decrease may need to be adjusted if the USDs supply SPA price appreciation flywheel stalls.

Ensuring SPA and USDs Liquidity

SPA bribes will be provided by the SperaxDAO to ensure veSPA holders vote for SPA/USDs and USDC/USDs. A SIP is in active discussion to redirect SPA emissions from veSPA holders to the gauge where veSPA holders can earn the SPA by voting to direct SPA emissions to the major Sperax pools.

Technical Specification

Allocate ~110,000,000 SPA to finance the SPA gauge.

Day 1-90 budget

37,305,000 SPA

Day 91-180 budget

29,884,000 SPA

Day 181-270 budget

23,875,200 SPA

Day 271-360 budget

19,100,160 SPA

If additional USDs or Demeter farms are added to Demeter before the launch of the gauge, the emissions from this pool will be considered in the starting budget. RageTrade and VELA for example have been approved for Demeter Genesis but have yet to launch their farm. They will be automatically added to the SPA gauge.



Approve proposed budget and inflation schedule


Deny budget and inflation schedule

  • For
  • Against

0 voters

Huge step forward for the protocol! The beginning what will be a cornerstone of the Arbitrum liquidity scene:

DAOs looking for DEX liquidity?
Pair with USDs and get added to the gauge, offer SPA to your liquidity providers.

Investors farming stablecoins?
Benefit from the boosted yield thanks to USDs in smart contracts that aren’t receiving yield. USDs auto-yield preforms better thanks to the Gauge.

Investment portfolio that is partially stablecoins?
Earn native interest rate without staking. This rate stays high thanks to the USDs in LP positions, earning rewards the gauge.

veSPA holders want to accept yield in SPA?
Ok vote for the SPA/USDs and USDC/USDs pool and earn SPA.

veSPA holders want to earn new tokens as yield?
Ok vote for that DAOs pool. I.e. earn PLS by voting emissions to PLS/USDs.

Perp DEX or vault needing liquidity?
Increased USDs circulating supply means more collateral available to deploy into strategies. SperaxDAO becomes a strategic financier which can participate in strategies like the one presented by JonesDAO.

I also like the emphasis on emission reduction with time. Right now, SPA price happens to be appreciating during a period of max emissions, but inflation reduction is still critical.

Also fond of the marketing benefit. Promoting of the “Upcoming Catalyst” every 90 days will be big. Can provide a recurring cadence to spread the word about the SPA gauge and encourage DAO to participate by bribing for launching USDs pairs and bribing for SPA emissions.

Overall thumbs up from my end.

I would prefer going ahead with the current emission numbers and avoid any commitments on reduction etc. within the scope of this SIP since it is not feasible to implement it programmatically. Probably we will have an on-chain DAO within the next 90 days and we can let the DAO decide what the emission rate should be after 90 days.

Agree. Will need a DAO vote at the 90 day mark to determine the reduction %.