Dec 1, 2021
The BASIS token launch
The BASIS token sale will take place from 8th December — 11th December 2021 on ido.basis.markets
TL;DR:
- basis.markets is launching the BASIS token to unlock the potential to scale the basis.markets Decentralised Basis Liquidity Pool to a higher TVL and at speed.
- Trading fees from the future Liquidity Pool are modelled to reach up to $10m per month.
- BASIS token holders will be entitled to their share of trading fees, proportionally to their BASIS holdings staked, as well as an attractive staking programme, and a discount on Liquidity Pool fees themselves.
- Trading fee revenues are modelled at a conservative $35k per 100,000 BASIS over 3 years, excluding compounding or any token price growth, and paid in our non-inflationary, USDC-backed bmNOW token
- The BASIS token will be launched in a customised dutch auction running from 8th — 11th December 2021. You can find the countdown at ido.basis.markets
- Consistent with our seed funding round through Ownership NFTs, we are adopting a fair, decentralised approach with no presale, VC funding, or early owners.
- Our auction mechanics are based on the open source model developed by Mango Markets and customised to avoid manipulation.
The basis.markets story so far…
Our vision
In the past few months, basis.markets has seen rapid growth since we set out an ambitious vision: Next-level returns. Delta-neutral yield. Real-time insights.
Our roadmap consists of two streams:
- Decentralised Basis Liquidity Pool (DBLP): A managed liquidity pool taking advantage of the high APRs offered by the Basis Trade Engine and other high-return, evergreen strategies on behalf of users, automating the process of executing these trades for investors.
- Basis Trade Engine (BTE): A trade analysis platform scanning real-time data to highlight the highest return trades from across 15 exchanges, including basis trades, long & short trades, and more. We have launched the alpha version of the BTE on the 1st December, and are already collecting feedback and making improvements with suggestions from members.
This is underpinned by a decentralised governance model.
What we’ve achieved
We’ve achieved a lot in a short space of time, and are committed to a fast pace of growth:
- Core team identified and built
- Top-tier developers recruited and onboarded
- Trading strategies developed and tested
- Sell-out seed round of Ownership NFTs (25x oversubscribed)
- DAO community and voting mechanism launched
- Basis Trade Engine alpha release
The basis.markets community
basis.markets is committed to decentralisation — we see this as one of our key differentiating factors — putting the ownership of the fund in the community’s hands, rather than those of VCs and big players with early access. Our initial launch sold 5,000 “Ownership NFTs” and changed the model of seed investing — giving access to all rather than a select few.
We shared our first proposal with the DAO last week — giving everyone the chance to vote for continuing on the current roadmap, or raising additional funding to scale the community and growth plans.
In an open vote with over 87% turnout and 99% of votes in favour, the community voted to pass DAO Proposal 1 and launch the BASIS token, with the goal to unlock TVL growth to up to 10x and generating higher passive returns for current and future members of the community.
What’s coming next
Our initial vision for the Decentralised Basis Liquidity Pool had modest growth projections, offering a service managed by our small team to automate non-directional trade strategies for those who wanted a hands-off approach, and estimating a TVL of circa $100m.
We had no idea just how much interest we would receive…
The feedback has been immense and we’ve become aware how large the opportunity is to scale this idea. VCs, funds, and big players have been in contact expressing their interest. It’s clear the demand is there and we are in exactly the right place and time to capitalise on it.
All while generating passive income for our community through equal sharing of performance fees from the pool’s returns with all Owners.
As a decentralised community, we have an opportunity to scale up our growth significantly with the right growth investments — into the team, trade system architecture, and other areas.
And we want to offer you the chance to join us on this journey.
Introducing the BASIS token
The BASIS token is being launched as a single, simple mechanism to govern how trading fees from the Decentralised Basis Liquidity Pool are given back with the community.
With the launch of the DBLP, basis.markets will generate significant fees through an attractive 16% performance fee on pool returns. These fees will be distributed using our non-inflationary, USDC-pegged bmNOW token mechanism amongst all BASIS holders who have staked their tokens.
True to our vision, we are changing the game and putting the community at the heart of the reward structure, giving access for anyone no matter their size. Every BASIS tokens is equal and rewards will be shared as such.
Different to some crypto token sales, we wanted to make sure that our token sale participants are treated fairly and not at the hands of VCs or insider friends. We flipped the model around. In fact, those who purchase BASIS tokens in the token sale will benefit from accelerated access to the staking programme on Day 1 rather than waiting for tokens to be unlocked. This was voted for by the DAO to encourage the growth of the community.
Utility of the BASIS token
- Trading fees: Passive income through fair allocation of fees generated by the Liquidity Pool(s) and paid in non-inflationary, dollar-pegged bmNOW tokens
- Staking rewards: Early access to high staking rewards, paid in additional BASIS tokens, ahead of Ownership NFT holders
- Future cash flows: Ability to speculate on the future value of trading fee rewards
- Discounted investment: Tiered discount on Liquidity Pool trading fees
The chart below compares potential returns through trading staking and trading fees, exclusive of any compounding, and ignoring any gains through BASIS token price growth:
Tokenomics
Our tokenomics and vesting schedule have been designed to promote the decentralisation of basis.markets’ ownership model, whilst providing attractive rewards to BASIS token holders and all members of the community.
Token allocation:
- Token sale: 25%
- Ownership NFT holders: 50% (vested over 6–24 months)
- Staking & liquidity rewards: 24% (vested over 12 months)
- DAO contributors & seed liquidity: 1%
The initial circulation will be 35.5% of total supply: 25% token sale, 10% NFT holders, 0.5% seed liquidity.
BASIS tokens will be distributed through the following mechanics:
Our philosophy & the bmNOW fee token
We have a pledge to our token holders, to disperse the fees earned from the basis.markets pool evenly among the staked token holders. This means we will be using a completely new tokenomics model.
A model that naturally keeps a floor on our token price because instead of paying rewards in inflationary reward tokens, we will be offering a true USD-pegged value of the fees we earn from the pool. This is unique, we have a real business, and this is how we get the profits of that business directly to you as token holders.
For example: If we earn $5m in pool fees for a week, will be passing this all onto our staking owners using our bmNOW token which we will provide a DeX bid for. This will finally end the endless cycle of declining token rewards. The BASIS token will be the utility enabler through staking, but fees from the basis.markets pool will be paid via a separate stable token (bmNOW).
The BASIS token sale
The BASIS token sale will follow a tried-and-tested approach to our token launch, following a “dutch auction” style using a modified and enhanced version of open source code kindly shared by Mango Markets.
Our approach is slightly customised, with some modifications to increase fairness for participants and avoid manipulation by high capital players. It will be a single auction sale , avoiding the pitfalls of some recent dual auction processes.
Participants will contribute USDC to a deposit pool to determine the price, and BASIS Tokens will be distributed to all participants in proportion to their share of the USDC contributed.
The token sale will take place on: ido.basis.markets
Auction process
The token sale will take place over 72 hour
- Price Discovery Period: 48 hours
- Price Refinement Period: 24 hours
The BASIS token sale will happen over three days, starting 8th -11th December. The auction contract will have two vaults, one with 250,000,000 BASIS Token and the other with 0 USDC.
The 3-day sale will be split into two periods: Unrestricted and Withdraw Only.
During the Price Discovery period, any Solana user may deposit or withdraw their USDC from the Sale vault. The Price Discovery Period ends in 48hours and transitions into Price Refinement, where buyers may deposit additional capital but may only withdraw 50% of their USDC.
At the end of the Sale, all USDC depositors will be able to redeem their BASIS Tokens in proportion to their share of the USDC contributed.
The token sale will take place at ido.basis.markets
Our customised auction model
Our goal is to run a token sales that is simple, fully transparent and minimises the possibility for an unfair distribution through “gaming the system”. Our modifications to the process used by other recent token sales disincentivise this manipulation, whereby high capital players could deposit large amounts to artificially inflate the price, scaring off smaller players and reducing the pool size, only to withdraw large sums during the second period and crash the price, ensuring a high proportion of tokens for themselves.
Our approach reduces this possibility through 2 modifications to the Price Refinement Period mechanics:
- Limiting withdrawals to 50% of total capital deposited, meaning large players can’t deposit large amounts and then withdraw
- Allowing additional deposits, meaning participants can add additional capital if the price falls to a level they would like to add additional capital
Timeline
The Timing of the token sale
Start 8th December 2021–8pm GMT (3pm EST, 4am HKT(9th)) — PRICE DISCOVERY STARTS
10th December 2021–8pm GMT (3pm EST, 4am HKT(11th)) — PRICE REFINEMENT STARTS
End 11th December 2021–8pm GMT (3pm EST, 4am HKT(12th)) — REDEMPTION STARTS
Auction details
Buyers get a pro-rata price at the end and every participant gets the same price for BASIS Tokens.
The sale price per token can be calculated with: (total USDC in vault) / (250,000,000 BASIS Token) This price will fluctuate during the entire 72 hour period as USDC is deposited and withdrawn.
However, during the last 24 hours, you may only withdraw 50% of the USDC, although you can still deposit USDC.
Some examples of how the process would work in different scenarios:
Example 1: You deposit in the first 48 hours and you simply wait for the process to end, you will get the BASIS tokens at the same price as everyone else for the USDC amount you entered.
Example 2: You deposit in the first 48 hours, and within the first 48 hours decide this token sale is not for you and you can withdraw all the USDC you deposited.
Example 3: You deposit in the first 48 hours, and then in the last few hours you see the expected price is favourable to your views and deposit more USDC.
Example 4: You deposit in the first 48 hours, then in the last 24 hours withdraw up to 50% of your total deposit. Then in the final few hours decide to deposit more USDC as the price is back to what you were hoping.
Staking programme
Our staking programme will launch shortly after the token sale, incentivising early holders with rewards paid in BASIS in advance of the DBLP going live in Q1/Q2 2022.
What’s on the roadmap?
Our roadmap can be found at https://basis.markets/roadmap, and is updated regularly — next update coming 2nd December
Following the token sale, we have a number of priority growth investments which will enable us to scale to full capacity, including growing the team & operating model, building the trading system architecture needed to execute at 10-figure scale. Read more below:
Where next?
The countdown is now live on ido.basis.markets.
Connect with us to find out more, ask questions, and hear the latest updates on our social channels:
- Watch the latest townhall here
- Recap previous townhalls here & here
- Check out the team and roadmap on our site
- Join the community on discord
- Follow us on twitter
Appendix 1: Our protocol universe
