IBV - Intrinsic Borrowing Value in SonicSphere

One of the most powerful innovations SonicSphere offers is the ability to achieve Intrinsic Borrowing Value (IBV). IBV is a structured way for users to extract liquidity against their SPHERE position without ongoing interest or liquidation risk.

IBV measures how much capital efficiency you can unlock from your SPHERE (via gSPHERE) relative to the price you paid, giving participants the ability to stay liquid while participating deeply in the protocol’s growth & extracting value from their gSPHERE positions.

What is IBV in SonicSphere?

Every SPHERE token is backed by at least 1 $S (Sonic token) through the bonding curve floor mechanism. This provides users with the ability to:

• Lock SPHERE into gSPHERE

• Instantly borrow up to 1 $S per SPHERE (at 97.5% Loan-to-Value based on a 2.5% fee)

• Do so without ongoing interest payments or risk of liquidation

Thus, your IBV "Intrinsic Borrowing Value" is based on the ratio of the average price you paid for SPHERE versus the amount you can borrow back.

How to Calculate Your IBV

The formula for calculating IBV is simple:

• If you acquire SPHERE at 1 $S, your IBV is 100%.

• If you acquire SPHERE at 2.22 $S, your IBV is:

Where you are able to borrow 1 $SONIC back from your original 2.22 $SONIC / SPHERE purchase (45.04%).

In short: Lower entry price = Higher IBV = Greater borrowing power relative to your initial purchase value.

Why IBV Creates a Strategic Advantage

Buying SPHERE near the bonding curve floor (early) means:

• You maximize your ability to borrow $S against your gSPHERE with very low capital friction.

• You retain the upside exposure to SPHERE appreciation, emissions, and yield distribution.

• You preserve liquidity without needing to sell your core position — liquidation free, interest free.

This creates a capital-efficient, risk-minimized exposure that compounds over time as the protocol grows.

Example Scenarios

Scenario 1: Buying SPHERE from the Bonding Curve at Launch (Floor Price)

• Purchase price: 1.00 $S per SPHERE

• Borrowing power: 1 $S per SPHERE (97.5% LTV)

• IBV: 100%

Effect: You can unlock nearly the full value of your capital instantly, while still maintaining full upside to SonicSphere governance, yield farming, and auction participation.

Scenario 2: Buying SPHERE Later at a Higher Price

• Purchase price: 2.22 $S per SPHERE

• Borrowing power: 1 $S per SPHERE (97.5% LTV)

• IBV: 45.04%

Effect: Your capital efficiency drops significantly — you can still borrow $S, but now only against ~45% of your invested principal.

Scenario 3: Acquiring oSPHERE via Auction or Emissions

• oSPHERE can be exercised 1:1 for SPHERE at the floor price (1 $S).

• If market SPHERE price is 2.22 $S, you are essentially buying SPHERE at a ~55% discount to market price.

Effect: Exercising oSPHERE becomes an ultra-capital-efficient strategy to restore or boost your IBV, allowing savvy participants to farm future intrinsic value at a discount.

A System Built for Intrinsic Value, Not Gambling & Speculation

SonicSphere’s IBV design is meant to:

• Incentivise early participation without inflating token supply.

• Reward governance, long-term commitment, and protocol contribution.

• Provide users with intelligent liquidity options without selling core assets.

Unlike mercenary yield models, SonicSphere ensures every participant has the tools to stay liquid, stay incentivised, and grow their position intelligently over time.