Basis Cash V2 is planned to be implemented in three phases. The first phase seeks stability; the second phase finds more demand scenarios for BAC; and the third phase builds a DeFi stack.
Original title: “Basis’s V2 Roadmap”
Author: Blue Fox Notes
Basis has been under great pressure recently and has been underwater. How to achieve the relative stability of algorithmic stablecoins is a problem. The Basis team recently launched the V2 plan, which was implemented in three phases. The first stage seeks stability; the second stage finds more demand scenarios for BAC; the third stage builds a DeFi stack.
Basis V2 Phase 1
At present, the stable currency BAC of the Basis protocol has been less than $1 for a long time. The current priority is to get it back to the anchor price. The first stage of Basis V2 set its goal to return BAC to the anchor price of $1.
Migrate liquidity to the Stableswap pool
The Basis team believes that moving liquidity to the Stableswap pool will help BAC return to $1. The Basis team is currently communicating with Curve and other stable currency exchange agreements to achieve this goal. Providing liquidity for these stablecoin pools has the opportunity to get rewards. However, the specific reward plan is still in communication with the corresponding team and should come out soon.
Changes in BAS token incentives
The first stage of Basis V2 requires token migration, which will create new BAS tokens, and the distribution of BAS tokens will be determined through governance. This mechanism can change the future distribution mechanism of BAS tokens, and how to iterate will be implemented through community governance. The distribution of BAS tokens will be combined with the incentives of BAS, BAC and BAB.
The Basis team is currently discussing the launch of BAC-based token pairs with Sushiswap, and the liquidity providers of these token pairs may be rewarded with BAS tokens.
Increase demand for BAC through integrated lending agreements
In the loan agreement of this plan, by providing other stable coins DAI, USDC and USDT, users can borrow BAC at a higher LTV (LTV is the Loan To Value Ratio, the general US practice is that the inventory LTV is 50%, the LTV of accounts receivable is about 80%). In addition, BAC/DAI liquidity providers can have leveraged positions and participate in BAS mining through token contracts.
Basis V2 Phase 2
The Basis team believes that after the first stage, its price stability will improve over time. If relative stability is achieved, the Basis team will plan to create requirements for BAC through various applications.
Savings account and cash app
Basis tries to provide higher income for ordinary savings users. The current bank savings interest rate is much lower than the inflation rate. Basis plans to integrate legal currency deposit channels, allowing users to deposit BAC through legal currency to earn fixed interest income. In addition, it plans to launch Basis Swap in the future, and it can also generate interest by providing liquidity to its internal metapool. This part is planned to be implemented in the first quarter of 2021.
Basis’ Synthetic Asset Agreement
Baisis plans to launch the Basis Synthetic Asset Protocol, which can issue synthetic assets through BAC to increase the demand for BAC, similar to Synthetix. In addition, Basis plans to build a leveraged and decentralized market for various on-chain indicators (such as ETH gas fees, etc.) to expand Basis’s DeFi ecosystem. This plan is expected to be implemented in the second quarter of 2021.
Basis Vision Fund
The core goal of the Basis Vision Fund is to build the Basis protocol ecosystem. The foundation is conducted through governance, but this task is not a priority. This part is planned to be implemented in the third quarter of 2021.
The third stage of Basis V2
To build a fully decentralized DeFi, a decentralized algorithmic stable currency is needed to support it. The current stable currency has certain centralization problems. This is also the most important meaning of the existence of BAC.
In order to make BAC a basic building block of DeFi, Basis needs to expand its usage scenarios and increase its resilience.
Basis Swap
Basis Swap is a decentralized exchange project that the Basis team is trying to build. It adopts a model called DaMM (Dynamic-automated Market Maker) dynamic market maker, in which BAC is used as the basic token to build BAC trading pairs. BAC can be used as a routing asset for all transactions.
Some people may ask, with so many swaps, why does Basis need another swap? The core here is that from a long-term perspective, Basis’s ultimate goal is to build its own stable currency, and at the same time no longer anchor it to $1, so as to escape the gravitation of legal currency stable currency.
Through the Basis Swap model, Basis can get the BPI (Basis Price Index), which is the Basis price index. When this price index accumulates to a certain level, Basis can develop a stable currency that no longer anchors the US dollar. This is an extremely ambitious goal. But this is also a very, very difficult goal.
In order to allow users to provide Basis Swap with liquidity, Basis will provide BAS incentives, BAS can obtain actual cash flow, is a profitable asset, and also has governance rights, and can manage the development direction of the entire agreement.
According to Basis’s current roadmap, Basis Swap will be implemented in the third quarter of 2021.
Plan to increase demand for BAS
18% of BAC/DAI LP’s pledge income is rewarded to BAS pledgers
Since the current price of BAC has been lower than $1 for a long time, and many BABs have been issued, many people are worried about the lack of motivation for BAS token holders. In order to increase the confidence of BAS holders, Basis proposed the CDIP-6 proposal, in which a part of the BAC/DAI liquidity pledged income will be awarded to BAS holders. It has been passed and is expected to be implemented in the near future.
In Basis, BAS rewards can be obtained by staking BAC/DAI LP, and the current rewards are all given to pledgers who provide liquidity. In the CDIP-6 proposal, 18% of the BAS will be rewarded to BAS pledge By. The remaining BAS will be used to sell to provide more BAC/DAI liquidity, similar to Pickle’s mining model.
When the BAB is outstanding, 20% of the additional BAC issuance will be distributed to the BAS pledger
It was previously suggested that if there are too many BABs, the additional issuance of BAC will first be given to BAB holders to repay the bonds. This may cause BAS holders to not receive BAC incentives for a long time, thereby reducing their motivation to hold BAS .
In Basis’s BIP-9 proposal, it proposes that the additional BAC issued when the bond is not cleared should be allocated between BAB/ and BAS at a ratio of 80/20. After all the debts are paid off, all the additional BAC will be given to the Boardroom, which is the pledger of BAS.
One of DeFi’s most important puzzles
Algorithmic stablecoin is one of the most important puzzles to realize the ultimate vision of DeFi. If DeFi is still in a very early stage, algorithmic stablecoin is in an earlier stage. For a long time in the future, algorithmic stablecoins will continue to experiment. In the process of this experiment, most of the algorithmic stablecoin projects are difficult to sustain. But as long as one or two can succeed, it marks a new stage of DeFi.
In addition, it needs to be particularly reminded that algorithmic stablecoins have extremely drastic volatility in the early days and are extremely speculative. It is not suitable for most ordinary users to participate, if you do not understand the mechanism, it is best not to participate.
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