• 1. What is SPOT?

  SPOT is a low-volatility commodity-money. It's durable, decentralized, and inflation resistant, like a commodity money, only more stable. Spot can be used as a store of value and collateral asset. To learn how SPOT works see the SPOT primer.

• 2. Is SPOT a stablecoin?

  SPOT is not a stablecoin, it does not have a peg and does not track the price of any fiat currency. SPOT is a low-volatility commodity money. SPOT is more volatile than a traditional stablecoin, but less volatile than a traditional cryptocurrency. Most notably, unlike today's stablecoins SPOT is scalable, durable, and inflation-resistant.

• 3. What is a flatcoin?

  Flatcoin is a general term of art used to describe a new generation of stable assets that do not track the US dollar. SPOT is sometimes referred to as a decentralized flatcoin. More precisely, SPOT is a low volatility commodity money.

• 4. How durable is SPOT?

  The SPOT token is extremely durable. Its protocol has no peg and no catastrophic breaking conditions. In extreme market scenarios the token simply becomes temporarily more volatile, bending rather than breaking.
  
  Instead of a peg, SPOT has a bounded range of volatilies. In its typical state, where all the tranches in SPOT’s collateral set are fresh, the token is stable. But in the most extreme condition, where all the tranches in SPOT’s collateral set have matured, SPOT is precisely as volatile as AMPL.
  
  For more context, read: The SPOT Flatcoin — A Low Volatility Derivative.

• 5. What do you mean by low risk?

  By low risk, we mean low downside volatility. SPOT's reduced volatilty combined with USDC's stability makes the SPOT/USDC staking pair easy to stake and hold.

• 6. What do you mean by high reward?

  By high reward, we mean high potential upside. The staking asset received by participating in Spot's bootstrap program is the underlying collateral asset AMPL. Holders of AMPL have a stake in the growth of the SPOT network. Unlike SPOT AMPL is volatile and has potentially high upside. You can think of AMPL as the "gold" that back's SPOT.

• 7. Why should I hold SPOT?

  SPOT integrates some of the best qualities of fiat monies like the dollar and commodity-monies like gold or Bitcoin. SPOT is:

  • Much less inflation-prone than fiat monies
  • Much more stable than commodity monies
  • Similarly durable & uncensorable to commodity monies

  To understand why low volatility commodity monies are important and how SPOT fits into this new asset class check out:

  • The asset that's missing.
  • SPOT v2 — The cost of stability.

• 8. What is AMPL and how does the SPOT use it?

  AMPL is the underlying collateral asset that enables SPOT protocol. It is a price stable, but supply volatile cryptocurrency. AMPL's unit of account function greatly simplifies the creation of on-chain derivatives through tranching. To learn about tranching see the SPOT primer.

  • SPOT — is rotating basket of Senior AMPL tranches
  • stAMPL — is a rotating basket of Junior AMPL tranches

  Any holder of AMPL benefits from SPOT's network growth.

• 9. What makes SPOT different from Ethena?

  SPOT and Ethena use very different approaches. Ethena creates stability and yield through delta neutral positions across centralized exchanges. The SPOT protocol uses tranching to reorganize the volatility of a medium volatiltiy asset (AMPL) into high and low volatility perpetual derviatives. The most notable differences are:

  1. SPOT is decentralized:
     There are no custodians or administrators executing trades on centralized exchanges.
  2. SPOT scales naturally with demand::
     Increased demand for SPOT translates directly into increased supply of SPOT.
  3. SPOT is a low volatility derivative
     Although SPOT is mean-reverting it has no peg and the protocol is happy to let prices float.

• 10. What makes SPOT different from DAI?

  SPOT and DAI use very different approaches. DAI creates stability through liquidation markets. The SPOT protocol uses tranching to reorganize the volatility of a medium volatiltiy asset (AMPL) into high and low volatility perpetual derviatives. The most notable differences are:

  1. SPOT is decentralized:
     SPOT does not rely on centralized collateral of any kind.
  2. SPOT scales naturally with demand::
     Increased demand for SPOT translates directly into increased supply of SPOT.
  3. SPOT is a low volatility derivative
     Although SPOT is mean-reverting it has no peg and the protocol is happy to let prices float.

  Note: Liquidation market based approaches are vulnerable to cascading liquidations and are difficult to scale in general — hence their use of centralized collateral (like USDC).

• 11. What makes SPOT different from Terra / Luna?

  SPOT is a low volatility derivative. It is a one-directional claim on a basket of collateral that has no peg and no death-spiral minting mechanics.
  
  Instead of a peg, SPOT has a bounded range of volatilies. In its typical state, where all the tranches in SPOT’s collateral set are fresh, the token is stable. But in the most extreme condition, where all the tranches in SPOT’s collateral set have matured, SPOT is precisely as volatile as AMPL.
  
  For more context, read: The SPOT Flatcoin — A Low Volatility Derivative.

• 12. Where does SPOT's native yield come from?

  Similarly to how Ethena harvests yield from imbalances in demand for short and long ETH positions, Spot's native yield is harvested from imbalance in demand for stability (SPOT) and volatility (stAMPL).
  
  To learn more about it see: Enrichment & Debasement.

• 13. What is rebasing, does SPOT rebase?

  Rebasing is the process of automatically adjusting the quantity of units in user wallets based on demand. AMPL rebases, but SPOT does not.
  
  To learn more see the official website.

For an overview of the system read the SPOT primer.