Leveraging gSPHERE to Borrow $S - The Game Changer

Because the bonding curve mechanism guarantees that each SPHERE token is continually backed by no less than 1 $S. This innovative framework forms the basis of the protocol’s borrowing function, presenting a unique opportunity for gSPHERE holders to employ gSPHERE as collateral to borrow $S from the bonding curve, without risk of liquidation. Since the value of 1 SPHERE is always equal to or greater than 1 $S, holders of gSPHERE are able to borrow up to 1 $S (subject to a 2.5% fee) for every gSPHERE they have locked. This borrowing process is entirely free from liquidation risk, as the borrowed $S is inherently secured by the underlying SPHERE tokens.

By eliminating liquidation risk and interest charges, the protocol offers a borrowing experience that is straightforward, low-risk, and user-friendly—distinguishing itself from conventional DeFi lending systems that require constant margin and collateral maintenance. Additionally, the structure prevents the emergence of non-performing debt, as the value of SPHERE tokens consistently equals or exceeds the amount of $S borrowed. This mechanism not only ensures ongoing protocol stability but enhances capital efficiency of the ecosystems underlying assets.