Sphere Finance towards the deflationary model

Da inflazione a deflazione

Let’s see in simple words how Sphere Finance is working to make the transition from an inflationary model (typical of a rebase-based protocol), to a deflationary model, without losing its main attraction for new investors, thus keeping APYs high and rebased.

SPHERE / USDC pool which is currently used to allow investors to buy or sell Sphere

Let’s take the example where in the half of the Sphere pool there are 2 tokens and 100 usdc on the other. The value of a Sphere will be $ 50.

We increase the number of Sphere to 4 after the sale of an investor who is making a take profit or panic sell

We increase the number of Sphere to 4 after the sale of an investor who is making a take profit or panic sell. At this point, due to the inflationary concept of the rebase, which allows owners to sell the earned Sphere, this part of the pool is destined to increase indefinitely, drastically reducing the value of Sphere, which with the example of 4, becomes 25 $ each

Burn model on Tetu Swap

Sphere has acquired most of the liquidity of Tetu Swap, which at this point allows the Sphere protocol to Burn the fees obtained from the sale or purchase exchanges that take place in the Swap, of which Sphere is practically the owner. This continuous activity, already in action, incessantly reduces the number of Sphere in circulation, but does much more đŸ™‚

Combo Burn Fees + Quantum Liquidity

The fees received by the protocol consist of USDC or WMATIC, which are continuously entered to increase the non-Sphere part of the Pool (therefore USDC or WMATIC).

To increase the pool there are also the rewards derived from the various staking pools in which the Sphere treasury is invested.

Let’s take for example a pool with 1,000,000 Sphere and 1,000,000 USDC.

This Pool undergoes a continuous rebalancing from the various exchange activities and reintroduction of liquidity in fees and rewards in the currency opposed to Sphere.

Burn and re-enter

During the trading operations, fees are generated in USDC, which Burnano Sphere. These Fees are reintroduced into the Pool by increasing the value of Sphere.

Quantum Liquidity effect

Added to this comes Quantum Liquidity, which in turn increases the value in USDC, thereby increasing that of Sphere.

Final value of Sphere based on the example

Keeping faith with the example, which in no way assesses any appreciation or depreciation of the token at this stage, we can see that Sphere will have assumed an automatic value of $ 4, compared to $ 1 before the intervention of the re-entry activities.

The revolution is underway. If you want to be part of it, find out more about Sphere.Finance

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