Basis’ Road to Algorithmic Stablecoins

蓝狐笔记

特邀专栏作者

2021-02-02 15:05 (UTC+8)

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In search of the Holy Grail.

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In search of the Holy Grail.

Editor's Note: This article comes fromBlue Fox Notes (ID: lanhubiji), reprinted by Odaily with authorization.

Editor's Note: This article comes fromBlue Fox Notes (ID: lanhubiji)》、《, reprinted by Odaily with authorization."as well as"Algorithmic Stablecoin Two Heroes: Basis》。

Basis: where to go

"as well as"

Basis V2 roadmap

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Basis' top priority

Basis is working hard on various plans to get back on the water, and there are three important things to do in the first phase of Basis v2:

First, the migration of liquidity to the stableswap pool is planned to begin this week. You can keep an eye on the specific progress at any time.

Secondly, a very important point is the change of the basis reward mechanism. The current basis reward mechanism is mainly to obtain bas token rewards by providing liquidity for bas/dai and bac/dai on Uniswap. As of the writing of Blue Fox Notes, the amount of bas tokens in circulation is 351,273, and the total number of tokens is 1,000,001. There are still less than 650,000 bas tokens available for incentives.

So, how to reward the remaining 650,000 or so bas tokens to ecological participants?

Judging from the information disclosed so far, most of these tokens will be given to the liquidity providers of bac and bas tokens. At present, liquidity is mainly provided on uniswap, which will be migrated to the stableswap pool in the near future, and the rewards will also be Along with the migration, this requires governance to pass a resolution.

*Liquidity Provider Incentive Program

basis plans to add BAC3CRV to crv.finance, and users can obtain liquid LP tokens without depositing BAC. If the BAC price is lower than the anchor price, users who deposit USDT, USDC, and DAI will receive higher BAS rewards than users who deposit BAC in the Stableswap (such as crv.finance) pool. In this way, users can be incentivized to provide more stablecoins to their stableswap pools, providing them with greater liquidity. This is similar to the original pickle mode. In the view of the basis team, such measures are conducive to the realization of the "anchoring" of bac.

*Vanilla Vault Program

In addition to providing liquidity in the stableswap stablecoin pool to obtain bas rewards, basis also introduces a new reward mechanism: "vanilla-BAC Vault", which is the internal vault of basi and the external of pickle Vaults have different incentives.

When the BAC price gradually recovers, the income of the vanilla-BAC vault will gradually decrease, and the rewards of these bas will be gradually transferred to the stableswap pool to motivate people to provide liquidity. When the BAC price is higher than the anchor price, the vanilla-BAC vault will convert the BAC into DAI or other stable coins, and deposit these stable coins into stableswap to provide liquidity for its token pairs and earn BAS.

The "Vanilla Vault" exists to regulate the supply of BAC in the market, thereby stabilizing the price of BAC.

Again, increase the demand for BAC by integrating lending protocols.

There are two aspects to the integration of lending protocols. One is that users provide other stable coins (such as usdc, usdt, and dai) to borrow BAC at a higher LTV, that is, other stable coins are regarded as high-quality pledged assets. When borrowing BAC The mortgage rate can be reduced, thereby increasing the demand for BAC; second, leveraged liquidity mining can be carried out through lending agreements, for example, liquidity providers of BAC/DAI token pairs can achieve higher multiples through other lending agreements bas mining, which also increases the demand for BAC.

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Basis medium-term strategy: bac becomes a stable currency supported by scene demand

Whether it is migrating liquidity to the stableswap pool, liquidity rewards, vanilla vault plan, or integration with lending protocols, these are essentially just guidance measures, not the soil on which algorithmic stablecoins can survive in the long run .

If you want to continue to develop and really gain a foothold, you must have the support of application scenarios. The need is fundamental. Regardless of how the US dollar is issued, its demand is real. Whether it is payment, taxation, international trade, treasury reserves, etc., it has its application scenarios and needs. It can only develop if it is integrated into economic transactions.

The same is true for the bac of basis. It needs to rely on the defi protocol and integrate it into payment, synthetic assets, lending, dex and other protocols before it can really develop.

basis thus established a roadmap for future development. In the medium term, it has two core supporting strategies:

*Save and pay

Savings and payments are the most basic application scenarios of stablecoins. Of course, the payment itself is the final result. Without stability, there is no possibility of payment. Therefore, basis starts with savings first. How to attract ordinary users to use bac? Basis plans to integrate the channel of fiat currency deposit, allowing users to earn fixed interest income by depositing BAC. In addition, it also plans to provide liquidity through the internal metapool through the subsequent basis swap to earn income for users.

In the view of Blue Fox Notes, synthetic assets are the most critical part of the success of basis, and it is also the most likely path. Compared with all other measures, this is the most concerned point of Blue Fox Notes.

synthetxi is a platform for the generation and trading of synthetic assets. Its native token SNX has no real value at the beginning, but it has become the original basic token of its synthetic asset network by integrating it into the generation and trading of synthetic assets. Snx is a very typical case of pulling one's own hair and taking off. And whether basis can take off by pulling its own hair, whether it can make bac truly meet the real demand, and be integrated and adopted by more defi protocols, the path of its synthetic assets is very critical. Expect the basis team to take this seriously.

*Vision Fund

In the mid-term strategy, it also has a vision fund to develop the ecology of the basis, which is collective wisdom. In fact, the basis team can use part of the funds from the bas reward and the additional issuance of bac to motivate more developers and ecological participants, thereby realizing real support for bac. If the pie can be made bigger, it should be encouraged for the team and ecosystem developers to obtain corresponding benefits from the development process, which is also conducive to the long-term development of the ecosystem.

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Basis's most ambitious strategy is its long-term goal: breaking away from the dollar peg and building its own stable system.

How does it plan to achieve this? Its path is basis swap. At the beginning, Blue Fox Notes did not understand why it followed up into the field of DEX in a "vulgar" way, because this is an extremely crowded track at present. But after seeing that its goal is to build a BPI (basis price index), I understand its future ambitions.

On basis swap, bac will form transaction pairs with all tokens, thus becoming the routing asset of its basis dex. Just like eth in uniswap, BPI is constructed through basis swap. When it accumulates to a certain level, basis hopes that bac will not Instead of anchoring the US dollar price, it forms its own stable currency.

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There is a narrow gate for basis to walk. The things it has to do are very difficult, and it is impossible to go smoothly. If it can still have toughness after tossing back and forth, then, as time goes by, its vitality will be stronger. The probability of the success of the encryption project itself is very small, and the algorithmic stable currency is a small probability in the small probability.