No, SAP is not a stablecoin. Rather, SAP aspires to become an algorithmic reserve currency backed by other decentralized assets. Similar to the idea of the gold standard, SAP provides free-floating value its users can always fall back on, simply because of the fractional treasury reserves SAP draws its intrinsic value from..

Each SAP is backed by 1 BUSD, not pegged to it. Because the treasury backs every SAP with at least 1 BUSD, the protocol would buy back and burn SAP when it trades below 1 BUSD. This has the effect of pushing SAP price back up to 1 BUSD. SAP could always trade above 1 BUSD because there is no upper limit imposed by the protocol. Think pegged == 1, while backed >= 1.
You might say that the SAP floor price or intrinsic value is 1 PD. We believe that the actual price will always be 1 BUSD + premium, but in the end that is up to the market to decide.

There is no clear answer for this, but the intrinsic value can be determined by the treasury performance. For example, if the treasury could guarantee to back every SAP with 100 BUSD, the intrinsic value will be 100BUSD. It can also be decided by the future DAO. For example, if the DAO decides to raise the price floor of SAP, its intrinsic value will rise accordingly.

At a high level, Sapphire DAO consists of its protocol managed treasury, protocol owned liquidity, bond mechanism (minting), and high staking rewards that are designed to control supply expansion.
Bonding in the “Mint” page generates profit for the protocol, and the treasury uses the profit to mint SAP and distribute them to stakers. With LP bond, the protocol is able to accumulate liquidity to ensure the system stability.
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