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Sovereignty Guide)
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Sovereignty is gained by an alliance over a system or constellation.
Sovereignty makes the Player Conquerable Stations and Outposts owned
by the sovereign alliance untargettable; it is currently the major mechanic
for holding territory. Sovereignty also grants a -25% bonus to POS fuel use. If a player alliance holds sovereignty in a system, it can construct an outpost (1 per system, has to be
at a planet).
Gaining system sovereignty
The Dominion patch has significantly altered previously existing Sovereignty mechanics.
Sources