Baseline Market Maker (BMM)
BMM is an on-chain market maker built on Uniswap V4 as a general purpose liquidity solution for token creators. By accounting for tokenomics, Baseline provides liquidity for the full FDV of its tokens, guaranteeing liquidity for the entire supply at all times.
- Autonomous & onchain – Operates entirely on-chain using configurable rules, no human intervention needed.
- Volatility-Aware – Adjusts bid/ask depth in real time using trend-based volatility signals.
- BLV-Integrated – Strengthens the token's price floor with every trade via Baseline Value (BLV).
- Capital-Efficient – Liquidity allocation responds to size, price, and system solvency—making more out of every dollar in the pool.
- Direct Pool Interventions – Executes trades to counter extreme volatility using real-time VWAP-based price signals.
Why it matters
| Feature | Traditional Market Making | Baseline Market Making |
|---|---|---|
| Transparency | Off-chain actors, special access, opaque incentives | Fully transparent and algorithmic |
| Value Accrual | Profit-driven spreads that extract value from token holders | Grows with volume—value flows back into the system |
| Growth | Fails under pressure due to human error or conflicting incentives | Designed to scale with market cap |
How It Works
BMM deploys liquidity across three distinct ranges:
- Floor Liquidity: BLV is a buy wall for the last bToken holder to exit their position at the Baseline Value (BLV), located at the top of the Floor tick.
- Anchor Liquidity: A tightly concentrated range around the current price, ensuring deep liquidity and strong price support — especially during volatility or sell-offs.
- Discovery Liquidity: A wider range that facilitates upward or downward price exploration, enabling trend formation and smoother price discovery.
These liquidity ranges operate independently, giving the system more flexibility to respond to different market conditions.
BMM uses real-time trading data and volatility trends to rebalance liquidity across the three ranges:
- Storage (long-term price floor)
- Bid (buy-side support)
- Ask (sell-side supply)
Liquidity is dynamically adjusted based on volatility regimes, cost basis, and token flows. When demand increases, BMM deepens bid-side liquidity and raises support levels. During sell-offs, it cushions impact by reducing slippage and preventing downward spirals.
BMM incentivizes value capture over time by optimizing the spread between average buy and sell prices (ABP / ASP), guiding the market toward healthy price discovery.
Key Takeaway: Baseline's dynamic liquidity system is intelligent. By concentrating liquidity where it's needed, applying leverage when it's safe, and adjusting floors only when fully supported, Baseline creates a market that is deep, efficient, and self-sustaining — without ever needing a centralized market maker.