Why an Options Token?

Why an Options Token?

Having an options token in the mix is what defines SonicSpheres point of difference between our protocol & its origin protocol, Solidly. This notion was derived and utalized based on the beautiful financial engineering by the BeraDrome team.

As mentioned earlier, oSPHERE serves as the token allocated to Auction Gauge participants as payment for contributing yield bearing assets to the ecosystem’s hedge fund treasury. It functions as the perpetual call option for $SPHERE. Auction winners or gSPHERE holders who receive oSPHERE have two options: 1) Exercise: They can exercise their call option tied to $SPHERE, by putting 1$S / SPHERE (oSPHERE) in the bonding curve, thereby acquiring it at the established floor price and realizing an arbitrage opportunity between the floor price and the market price of SPHERE. 2) Burn: Alternatively, they can choose to forgo their privilege of purchasing $SPHERE at a discount (the floor price). In doing so, they can opt to burn their oSPHERE tokens and, in exchange, receive 'Voting Power' that is locked indefinitely. Voting Power cannot be borrowed against, but does reap the full benefits of yield distributions just like gSPHERE holders.