Launching a Baseline Token

Designing tokenomics and managing token distribution for long-term success is an incredibly complex task fraught with pitfalls. Teams end up designing unsustainable tokenomics and agreeing to unfavorable terms with market makers. Navigating these challenges takes time and energy that could be better spent building products–and even then often result in suboptimal outcomes.

Baseline offers a streamlined solution that eliminates the need for traditional market makers and has an automated approach to liquidity and pricing. Project teams can concentrate on product development knowing that the system will manage token distribution and market making efficiently and fairly.

Launching a Baseline token involves a structured process consisting of three key areas:

  1. IBLV (Initial Baseline Value Event)
  2. Liquidity Configuration
  3. Tokenomics

IBLV - Initial Baseline Value Event

Each Baseline token will undergo a fixed-price auction in order to source the initial capital needed to set up the liquidity pool. The presale will have a capital limit and allowlist to ensure fair participation and distribution of tokens.

Liquidity Configuration

Each Baseline token will have a unique liquidity configuration that its project team will define. This configuration will affect how the token is traded and managed by its own market making system.

Liquidity Allocation

  • The raised funds from the presale will be allocated between the Floor, Anchor, and Afterburner. The split in allocation will decide the BLV price, market premium, and amount of leveraged buyback respectively.

Liquidity Depth

  • The liquidity depth can be configured in the market making system to control the price impact from buy and sell orders. High liquidity depth allows the market to absorb large transactions without causing significant price changes, whereas low liquidity depth allows for greater price movements and higher volatility.

Tokenomics

Baseline tokenomics offer a distinct approach compared to traditional models. At the time of launch, the entire token supply is either seeded into the liquidity pool or distributed to presale participants and investors. This model eliminates the need for time-based vesting schedules that are common in traditional tokenomics.

Looped Positions

Unlike traditional vesting, where investors frequently dump their tokens at a scheduled point in time, investors can choose to borrow against or loop their position. This approach offers investors leveraged exposure to the token. Any increase in the bToken's value relative to the reserve asset is magnified, providing potential for higher returns, and aligns investor incentives with the token’s growth. Investors can exit these positions at any time, but will lose the benefits of the leveraged upside if they choose to take profit early on.

Allowing investors to exit their positions immediately after launch might seem risky. However, the BLV’s supporting liquidity structure helps mitigate potential adverse price impacts from early selling. Unlike other tokens, which might experience severe price drops due to early investor exits, the BLV provides a stabilizing effect that allows the token to consistently perform.

Inflation Rate

The inflation rate is the amount of tokens that are minted and sent to the project team’s multisig whenever a bump() operation is executed. This feature enables the team to benefit financially when the token is performing well. The inflation rate is a configurable variable that teams can define at the time of deployment.

Here’s an example of how this works:

  1. Suppose the floating supply of a bToken is 1,000 tokens.
  2. When a bump() operation is carried out to increase the BLV, the inflation rate comes into play.
  3. For example, if the inflation rate is set at 1%, the system will mint and introduce an additional 10 bTokens into the floating supply, making the total supply 1,010 tokens.
  4. These 10 bTokens are sent to the team’s multisig.

$YES IBLV Allocations

Each presale will reserve up to 50% of its participation for YES token holders. YES holders are entitled to IBLV allocation based on a time-weighted share of their YES token holdings (spot & collateral).

YES IBLV Allocation Example:

  • Suppose an IBLV cap of $100k, of this $50k is reserved for YES holders
  • Consider the case where there are only two YES holders
    • Alice holds 100 spot tokens and 200 collateralized tokens over 10 days = 3000 points
    • Bob holds 200 spot tokens for 5 days = 1000 points
  • Alice is entitled to 3000/4000 IBLV allocation, or up to $37.5k
  • Bob is entitled to 1000/4000 IBLV allocation, or up to $12.5k
Leveraged LPsGrowth-Based Vesting