Growth-Based Vesting
Baseline tokens offer several compelling features for investors to consider:
- Baseline tokens are secured with a floor value, protecting investors from significant losses.
- Any profits generated by the token’s market making system are redistributed back to token holders.
- Teams that launch their token on Baseline demonstrate a strong commitment to sustained value creation. By forgoing traditional tokenomics like time-based vesting, they signal their dedication to long-term success.
Introducing Growth-Based Vesting
Growth-based vesting is a novel approach within Baseline that ties an investor's rewards directly to the growth and success of a project, rather than following a traditional, fixed vesting schedule. Unlike conventional methods where tokens gradually unlock over time, growth-based vesting in Baseline is achieved through the use of Baseline's credit system, offering investors unique liquidation-free leveraged positions that amplify their potential gains while aligning with the project's long-term success.
How It Works
- Leveraged Positions: Rather than receiving their full token allocation upfront or through a time-based schedule, investors take on leveraged positions. These positions enable them to increase their exposure to the token's growth, allowing their stake to grow as the project succeeds.
- Growth-Based Vesting: As the project's Baseline Value (BLV) rises, the value of these leveraged positions increases. This means that investor rewards are directly tied to the project's performance, incentivizing ongoing support and active contribution to the project's success.
Benefits
- Alignment with Project Growth: Investors benefit more when the project performs well, as their returns are linked to the token's appreciation rather than a fixed schedule, ensuring shared success.
- Flexible Exit: Investors have the flexibility to exit their leveraged positions at any time, giving them control over their investment strategy.
- Mitigated Risk: The BLV provides a secure floor price, reducing downside risk even in leveraged positions, ensuring investor protection in varying market conditions.
| Aspect | Time-Based Vesting | Growth-Based Vesting |
|---|---|---|
| Vesting Trigger | Fixed schedule (e.g., linear or cliff-based) | Tied to project growth metrics and performance |
| Alignment with Project Success | Limited - Vesting occurs regardless of project performance | High - Vesting adjusts based on project success |
| Flexibility | Rigid - Vesting terms are fixed and cannot adapt to changes | Adaptive - Can dynamically adjust to market and project conditions |
| Market Impact | Potentially negative - Large token releases can depress price | Minimized - Controlled token release based on actual growth |
| Incentive Structure | Can lead to early sell-offs once tokens are fully vested | Encourages long-term holding and continuous project support |
| Risk Mitigation | Higher risk of market manipulation or sudden price drops | Lower risk - Vesting adjusts to avoid negative market impact due to selling to the BLV |