3. Noticed the first spread level is 0, how does it help?

Based on the methodology described, if no transactions have occurred since the last update and there is a Bid at the 0 spread level, the next mark price will always be equal to or higher than the current mark price.

Likewise, if there is an Offer at the 0 spread level, the next mark price will always be equal to or lower than the current mark price.

Having a 0 spread level helps speed up the price formation process.