The $SPHERE token is used to capture various governance tokens on the Polygon blockchain, leading to vote disruption. We believe 2022 will be the year of governance tokens and we want to be a big part of it. If we can decide where the liquidity goes, the liquidity will flow to us.
No, $SPHERE is not a stablecoin. Rather, $SPHERE aspires to become a hyper-deflationary token, with an effort to suck as much governance as possible into its treasury to reward token holders.
It is extremely important to understand how early in development the Sphere Finance protocol is. A large amount of discussion has centered around the current price and expected a stable value moving forward. The reality is that these characteristics are not yet determined. The network is currently tuned for expansion of $SPHERE supply, which when paired with the staking, taxation and yield mechanics of Sphere Finance, result in a fair amount of volatility.
$SPHERE could trade at a very high price because the market is ready to pay a hefty premium to capture a percentage of the current market capitalization. However, the price of $SPHERE could also drop to a large degree if the market sentiment turns bearish. We would expect significant price volatility during our growth phase so please do your own research whether this project suits your goals.
When you buy and stake $SPHERE, you capture a percentage of the supply (market cap) that keeps growing thanks to our burning mechanism. Furthermore, if, for example, 2% of the market capitalization were burned thanks to our burning mechanism, your share would increase by 2%. Other protocols allow bonds that passively dilute your position and pass it on to bondholders (thereby reducing your market share). Thanks to our tax system, we get our income from taxes, not bonds, and when someone buys or sells, you as an investor benefit. There is no passive dilution to mint new tokens through binding. In addition, it means that if you buy $SPHERE with a low market cap, you get a larger percentage of the market cap since there are fewer tokens in circulation and the price of the tokens is cheaper too! And that will grow exponentially. On top of that, thanks to the continous buying back and burning, the tokens you hold will over time inevitably grow in value!
We're working on making price manipulation as costly of an endeavor as possible by implementing additional taxes, as voted, by the community. So far, we've made the possibility of an additional sell tax at launch & dynamic taxes.
The sell tax is generically capped at 20% with a ceiling of 25%. This means that it cannot be raised by more than 5% for the community, and it can only be done manually with the approval of the community. However, considering the needs of the protocol, we've asked the community to raise the tax for a few days after launch to make use of potential early exits. The sell taxes will be raised by 10% (20% -> 30%) and periodically decrease by 5% every day until it's back to 20%. This means that for the next few days after launch, the protocol will receive a much bigger share in the LP, the RFV treasury & the Investment treasury.