I don't use any substrate in my cham cages. I have that substrate in only 2 of my enclosures and I'll tell you why. One is my tarantula because she's tiny and hardly makes any waste and the other is in with my grass lizards also because they're tiny. Substrate is a pain to clean, especially if it's wet. The less that's in the bottom of the cage, the easier it is to clean. While he's real little, misting several times a day should keep him hydrated. When he gets a little bigger, you're going to want to use a dripper with something for the water to drain into. I've also had that substrate get moldy in the past where it's constantly wet when I've tried using it with other reptiles that needed high humidity (never chams). If it's not wet, then you're probably not giving him enough water.
One other thing is that fake branch you have in the bottom. I used to have one (I wish I could find it for my geckos!) but he won't be able to climb on it because it's too slippery and he won't be able to grip it. If you want to use it, get some skinny vines from the craft store (Pat Catan's has the ones I'm thinking of) and wrap them around it for him to hold onto
I have a similar sized cage that I've been trying to set up for my panther chameleon, maybe you can get some ideas from mine:
Your little guy is so cute, good luck with him
