Blast's rising star, Baseline: From a Stolen Past to Present Emphasis

Yamini003

Baseline, developed by the team behind the OlympusDAO algorithmic stablecoin protocol, was a recipient of the Blast BIG BANG award. They have announced the allocation of all reward points to the community. Baseline's precursor was reportedly the Jimbo Protocol, which suffered a loss of over 4000 ETH (approximately $7.5 million) due to a hacking attack, a project that "Big Brother Ma Ji" had previously invested heavily in. However, Baseline has committed to compensating for this loss from the profits generated by the Baseline protocol.

Baseline is characterized by "infinite liquidity and non-liquidation leverage." According to official documentation, Baseline is an automated token economic engine for ERC20 tokens, providing persistent on-chain liquidity and out-of-the-box non-liquidation leverage using dynamic supply models and market-making strategies. When deploying Baseline tokens, the protocol automatically injects initial liquidity into the Uniswap V3 pool. Once launched, the protocol reserves 100% of the token supply on-chain, ensuring its permanent value protection.

Simultaneously, Baseline repurchases its entire supply by maintaining sufficient liquidity in the pool, guaranteeing the token's intrinsic "baseline value" (BLV). Specifically, the team cannot issue tokens to themselves or investors in advance; each newly issued Baseline token must be purchased directly from the pool, allowing the protocol to accumulate liquidity. The value of the baseline is also enhanced by protocol earnings, obtained through LP fees, liquidity transfer fees, and lending activities, leading to a continuous increase in baseline value over time and driving token price appreciation.

The highlight of Baseline lies in its market-making strategy, where tokens are automatically distributed across three liquidity pools on Uniswap V3: Floor, Anchor, and Discovery. Floor defends the token price during significant sell-offs, Anchor provides reserve liquidity spanning from the token's baseline value to the current market price range, and Discovery offers new token liquidity between the current market price and higher prices, facilitating upward price discovery and distributing new token supply to the market. As of the time of writing, the ETH reserves for Floor are approximately 7270 ETH, and for Anchor, about 1610 ETH.

In essence, Baseline tokens have a baseline value to support their price, ensuring continuous appreciation, and the pool automatically adjusts the market-making range to guarantee token liquidity and a floor price.

Additionally, native credit tools are a feature of Baseline. Baseline allows token holders to use their Baseline tokens as collateral to borrow assets, distinct from liquidity provided through token trading. It features a peer-to-peer, independent risk architecture with no interest, no liquidation requirement, fixed terms, and no reliance on oracle risks. Users can use Baseline tokens as collateral to exchange for ETH as a loan, with a maximum fixed fee payment for up to 365 days. If users choose to default and not repay the ETH loan, they will be liquidated, but the process involves burning the collateral tokens to increase the proportion of intrinsic value, reducing circulating supply and reserves.

Regarding borrowed assets, Baseline officially suggests that users can borrow and repurchase tokens to create highly capital-efficient leverage positions, borrow and deposit reserves into yield-generating tools (such as borrowing ETH and depositing it into stETH), etc.

In conclusion, while the narrative of Baseline's "only rising, not falling" gained attention with the success of $YES, the sustainability of this mechanism will require further validation over time.

Jafar224

It is advisable to give in moderation, as otherwise it becomes a hasty pursuit of immediate gains.

Iti9

I'm just here to observe.

Jatin255

"Only rise and never fall" is also unhealthy.