What is BASE Protocol?
Base Protocol (BASE) is a token whose price is pegged to the total market cap of all cryptocurrencies at a ratio of 1 : 1 trillion. BASE allows traders to speculate on the entire crypto industry with one token.
A synthetic asset is one whose properties have the same effect and value as another asset. BASE is a synthetic asset engineered to simulate the market patterns of its underlying asset – all cryptocurrencies. This allows users to agnostically speculate on every token, rather than just one or a select portfolio of multiple.
BASE is built on an elastic supply protocol which programmatically expands/contracts token supply to achieve target price equilibrium. BASE’s target price is one trillionth the total market capitalization of all cryptocurrencies: (cmc) x 0.1^12. When BASE market price (bmp) = (cmc x 0.1^12), BASE is at equilibrium. When this equilibrium is disrupted, token supply is adjusted.
Supply expansions / contractions are called rebases. Rebases occur when bmp ≠ (cmc x 0.1^12). When bmp > (cmc x 0.1^12), expansion rebase occurs. When bmp < (cmc x 0.1^12), contraction rebase occurs. Expansion creates new supply, decreasing scarcity and driving price down its target. Contraction destroys supply, increasing scarcity and driving price up to its target.
Users will be able to buy BASE at its Uniswap liquidity pool. The Base Cascade rewards users who stake their BASE in the liquidity pool. The Cascade issues rewards based on how long a user stakes their tokens in the pool – where the more liquidity provided, and for longer, the greater share of the pool they receive.