BlockTalks x BASE Protocol AMA Transcript!
Hello! BlockTalkers & Blockchain Enthusiastic!
We recently hosted an AMA with BASE Protocol, on October 19th, at 04.00 PM UTC. Many of you might have participated or many of not. But we make sure no one missed out from the knowledge shared by Dylan Senter, Commercials & BD & Nick Ravanbakhsh, Operation at BASE Protocol So here we are up with the AMA transcript, for those who missed the live session, this blog post will be a saver & feeder of knowledge for them.
Nick — To keep this brief — we’re entrepreneurs, business nerds, programmers, and friends.
I, Nick, have worked in tech startups since 2013, been involved in crypto since 2015, and began working on crypto projects directly in 2017. I also have a portfolio of Airbnbs which generate passive income so I’m able to focus on BASE full-time. I’m the guy who writes all the copy for our papers, articles, and website. I’m basically the storyteller for BASE.
Dylan Senter is a lifelong entrepreneur who has been active in crypto since 2013, spoken on multiple panels at different crypto conferences, and consulted over 50 clients across ecommerce, blockchain, and technology projects. He currently runs an ecommerce store with $1m in annual sales. Dylan is our business and marketing guru!
Chris has been programming professionally for almost 10 years and has been doing blockchain development since the Ethereum wave of 2017. He’s known for his YouTube channel Learn with Coffee (17k+ subscribers) where he teaches programming across different stacks through in-depth video tutorials. Chris is our head developer.
And Based McGee is our other core developer. All we’ll say about McGee is this; there is no higher level of Ethereum development expertise. He is a global elite. McGee likes to keep a low profile, so he’s opted to stay anonymous. But don’t worry — you can get to know him through his contributions on the GitHub and you can reach him through the Telegram and Discord.
Introduction Questions Asked By Team BlockTalks
Q1. Could you please introduce Base Protocol to our community in layman’s term?
Ans — BASE is a token that represents all cryptocurrencies. By holding BASE, you have exposure to the performance of the whole cryptocurrency industry — all in one token.
This is achieved by pegging the price of BASE to the total market cap of all cryptocurrencies:
If crypto market cap is $400B, BASE is $0.40.
If crypto market cap is $700B, BASE is $0.70.
You might be wondering, how is this possible? How can you attach BASE price to crypto market cap?
This is achieved through the Base Protocol, which incorporates an elastic token supply. This means all BASE tokens across the world can be multiplied (expanded) or divided (contracted) to tune scarcity and influence price.
Using this protocol, we are able to create the world’s first tradeable cryptocurrency market index — one token that represents all tokens.
Q2. What are the advantages of Base Protocol to the other alternatives in the Blockchain field?
Ans — There is currently no crypto index fund product which covers the entire cryptocurrency industry. That’s because it’s very challenging to create such a product through traditional means, as it would be almost impossible to manage portfolio ownership of 5,000+ assets. How would the portfolio manager weigh ownership of each asset as market cap dominance changes? How would they account for newly entering/exiting assets? Who would take on all the associated transaction and custodial fees? There are also various legal limitations that restrict the formation of such an instrument in many countries — and even if it could be formed, it would be a highly centralized product.
BASE is really the first of its kind. There is NO other way to speculate on the entire industry.
Q3. What are the major milestones Base Protocol achieved so far & what are in the future pipeline?
Ans — At this stage BASE is still pre launch, but we do have our smart contract & rebase code finished and currently being audited. We also have fully integrated a Chainlink oracle into our protocol, that tracks the total crypto marketcap from a variety of different marketcap aggregator sites.
Additionally, we have partnered with DuckDao as a strategic partner. This has allowed us to work with their large network in the crypto space, and grow our community dramatically.
We have lots of announcements coming pre-launch/post-launch, and have our future 1 year roadmap posted.
Questions Asked on Twitter For BASE Protocol Team!
Q1. The fact of being pegged 1:1 to the total market does not make investing in the project risky? How do you give stability to the project in the face of extreme market volatility? what is the role of the rebasing mechanism in this?
Ans — This answer I’m about to give generally answers everything in this question, but it also goes into depth on another common questions we get:
- The Formative Period vs. the Final State -
BASE will act as a crypto index once it has achieved a stable price peg to the crypto market cap.
However, this price peg will NOT be stable in the beginning. That is because new adoption for BASE will cause bullish disruption on the price peg.
This is the “Formative Period” dynamic. In this formative period, as new users buy and adopt BASE, the growth rate for BASE will probably exceed the growth rate of crypto market cap. This means that for early adopters, BASE is more speculative than it is stable. During the formative period, holders are speculating more on BASE adoption than they are on the crypto market peg.
However, once BASE reaches an adequate threshold of visibility and adoption slows down, we can expect its market price to stabilize on the peg. Once this is achieved, holders will be able to use BASE to speculate on crypto market cap, and not so much on BASE itself. This is the “Final State.”
In the formative period, buying BASE is a bet on future adoption of BASE. In the final state, buying BASE is a bet on future adoption of the crypto industry.
Q2. Could you tell me more about the Base’s cascade rewards program? What are the requirements to be rewarded? How it different from the other liquidity rewards program currently in the market ? As a collateral assets, do you plan to list the token on lending/borrowing platforms?
Ans — You’ll be able to stake BASE straight through Uniswap, and get bonus rewards through the BASE Cascade. As long as you’re staking your Uniswap LP tokens in the BASE Cascade, you’ll get a share of the Cascade rewards pool.
The BASE Cascade rewards pool is perpetually funded by the network at rebases. These funding issuances are called SPLASHES.
When there is a supply expansion, an extra 8% of that expansion is minted — these tokens are splashed
into the Cascade rewards pool.
For example, if there is a 10% expansion, 0.8% extra is minted and goes to the Cascade.
When there is a supply contraction, 10% of the contraction doesn’t get destroyed — these tokens are
splashed into the Cascade rewards pool.
For example, if there is a 10% contraction, 1% is exempted and goes to the Cascade. This is how the Cascade sustains itself through the course of adoption. It encourages staking during “bullish periods” of supply expansion and further encourages staking during “bearish periods” of supply contraction.
Q3. I was reading on your website about one of the Base Protocol features and I am curious, how does Base Protocol work when used as a “safe haven” between encryption transactions and what is this about?
Ans — BASE can be used as a “save haven” position between crypto transactions. Typically, one might trade into a “blue chip” crypto to reduce risk exposure, or trade into a stablecoin to remove risk exposure. Trading into BASE presents an alternative that maintains exposure to all cryptocurrencies rather than just one. This could be riskier than trading into a blue chip, but in some instances, may act as a hedge against some isolated / unforeseen events. For example, a rapid downfall in the blue chip, or the rapid emergence of a new project. Trading into BASE mitigates the inherent risk of holding one coin, while absorbing the potential gains of several others. So far, the most popular safe haven crypto asset is Bitcoin, as it generally leads industry direction and is historically the least volatile. The ability to “hold” the entire crypto market should present a useful trading alternative.
Q4. Exposure to Total market Cap requires additional technologies such as oracles. Can you give us details about the type of oracle will you use? what is the technology behind?
Ans — For the Base Protocol to achieve its price peg, it requires one key data point: the total market cap of all cryptocurrencies (cmc). At launch, 11 off-chain cryptocurrency data APIs will be polled at regular intervals for market cap information by a quorum of Chainlink oracles operated by the Base Protocol team (soon to be operated by Chainlink). The Chainlink oracles calculate the median value of cmc across those 11 providers. The median is used rather than the average so as to better protect against extreme outlier values reported by any of these APIs, whether erroneously or maliciously.
For an inaccurate value to find its way on-chain, at least 6 of the 11 providers would have to be compromised or conspire together to defraud the network. At present, we consider this an acceptable mitigation against a highly unlikely scenario. Nevertheless, the more decentralized the Base Protocol’s oracle network is, the more resilient it will be against fraud and single point of failure risks; as such, the team plans to onboard third-party node operators in the future.
Regardless of how the data is sourced, there will frequently be a small discrepancy between the cmc used for BASE and the data that appears on any individual cryptocurrency data aggregator. To allay concerns, users will be able to consult the BASE dashboard surfacing all of the underlying data used to calculate the median market cap, and by extension, expansions and contractions to the BASE token supply.
Q5. What are the Base Protocol’s projections for the future? Do you think that the Market Cap of cryptosystems will increase enough to make the investments in $Base profitable?
Ans — There’s a common misconception that BASE price is perfectly pegged to the total crypto market cap, so BASE can only grow as fast or slow as the total crypto market. This is our goal in the end, yes.
But early on, new adoption can disrupt this peg so BASE grows at a much faster rate than crypto market cap. This would be highly rewarding for the earliest adopters. Once adoption slows down, BASE price will stabilize on the peg. This is when BASE performance will slow down and correlate more to the pace of the crypto market.
Not trying to shill here, but it is just such a huge misunderstanding that’s so important to clear up; if you buy BASE early, it has just as much opportunity to grow quickly as any sub $1m market cap project. As a founder, I’m not promising that will happen. But it can, like any other emerging project.
Questions Asked by our BlockTalks Community Members during live Session to BASE Protocol Team!!
Q1. Your Medium states “By holding BASE, you hold everything”. Does this include stablecoins, backed assets, and NFTs?
Ans — Great question. BASE is pegged to the total market cap of all cryptocurrencies! This includes stablecoins, backed assets, NFTs, security tokens, everything.
It represents speculation on ever digital crypto asset.
Q2. Volatility nature of crypto assets is one of the major barrier that discourage people from borrowing crypto assets, 1 ETH that worth $350 at the time of borrowing could worth $500 when it’s time to pay back. How does Base Protocol aim to address this issue with it lending instrument?
Ans — Great question. You’re right — lending is usually a problem in crypto because of volatility.
However, for BASE, the volatility actually adds value, IF you borrow BASE for trading crypto. I’ll explain:
BASE can be used as a collateral asset to hedge on leveraged crypto trading. Say a trader borrows 100 BASE to buy an altcoin, and that altcoin plummets alongside a bearish trend in crypto markets. When the trader pays their 100 BASE back to the lender, he notices the value of that BASE also dropped — correspondent to the crypto market. This means that when he pays the loan back, he only absorbs the loss he took that was in excess of the overall loss in the market. In this way, BASE can be used as a strategic hedging instrument for crypto-focused portfolios trading on leverage.
Q3. to create the $BASE financial ecosystem, will there be a buyback or burning of a token supply?
Ans — There is not a conventional system as you described, but this is essentially what rebasing does for the tokens.
BASE price above peg price = Supply increase
BASE price below peg price = Supply decrease
Q4. What is the DeFi problem that Base Protocol is focused to solve? Can you tell me what is long Run objectives?
Ans — BASE’s mission is to make cryptocurrency investing easier for EVERYONE.
We’ve seen that there are many individuals who want to invest in cryptocurrencies, but don’t necessarily understand how they work. While the overview for each different crypto asset can be difficult to understand for a new user, the pitch for BASE is simple: it’s the way to invest in all of those crypto assets simultaneously. In this way, the Base Protocol can become an instrumental force in driving new adoption in the blockchain space.
We’ve also noticed that institutional investors have been introducing cryptocurrency investments to their portfolios. These institutions typically invest at a high level with great diversification covering multiple industries. Their cryptocurrency holdings are usually composed of just Bitcoin, or some handful mix of “blue chip” digital assets. By holding BASE, these institutions will gain exposure to the entire cryptocurrency industry — an objectively more diversified alternative.
In the same way that Bitcoin is the household name of cryptocurrencies, the Base Protocol aims to become the household name for general cryptocurrency investing. BASE’s vision is to become the primary channel of investment for new/existing cryptocurrency traders and institutional investors.
Q5. Many projects rug pulled and exit scam recently. Why should investors trust your project not to do the same?
Ans — BASE is NOT a rugpull or scam.
The team is public.
Team tokens are locked for 1 year then vested monthly for 1 year.
Ecosystem tokens are vested over 36 months.
We have a very long-term commitment here.
Q6. Will governance be turned over to the Base Protocol in phases of some sort? What are the first governance decisions that you foresee the Base Protocol is the challenge of defi, how Problem Base Protocol facing?🤔🤔🤔
Ans — Governance will likely come in stages as you mentioned. The main point of governance for our project will be in the rebasing parameters experimenting. As we mentioned, we will be adjusting the parameters of our rebasing protocol to increase or decrease stability of the price peg as needed. The community will have input on this as we move forward.
Q7. As a trader like me, the security of my funds is my first priority before choosing any exchange for trading. How much secure Base is? What programmable technology & security developed by your team to build the platform very secure?
Ans — Here is a quick write-up on why we chose Chainlink as our most secure data source through their nodes:
Our engineering team has been watching Chainlink closely for months. In truth, we haven’t found another provider in the space that comes close to the level of decentralization, customer service, and blockchain agnosticism that Chainlink is capable of providing today. When it came time to start developing the architecture for our project, we were already sold on implementing a Chainlink oracle integration. Because of this long-held sentiment, our engineers had been consuming the Chainlink documentation and Youtube tutorials for some time. As a result, we were quickly able to set up a node of our own that is still aggregating market cap data from 11 different market cap APIs and relaying the data to our own FluxAggregator.sol smart contract to this day.
Q8. Currently attracting real users and mass Adoption is a problem for Blockchain projects. So how will $BASE solve this problem?
Ans — The thing about most crypto projects is that they are usually very complex and niche in utility.
BASE can be used by everyone and anyone; people currently in the crypto space and people not in it. BASE is valuable for anyone you know, even your grandparents. They might not have any idea what cryptocurrencies mean, but if they want to invest in them, BASE is the easiest way.
Q9. What are the core features that create the value of #Base Protocol ? What does #Base Protocol have that other projects don’t? What is the vision behind #Base Protocol and where do you see the project in the next 2 years in the crypto industry?
Ans — Here is a breakdown of our planned Use cases:
-The Base Protocol acts as a one-stop trading instrument which allows holders to speculate on the entire crypto industry simultaneously, rather than just one token or a select portfolio of multiple. This should be valuable for outsiders interested in crypto investing who don’t know which assets they “should” buy. It will also be useful for institutional investors seeking to diversify crypto exposure to the entire industry, and general crypto traders looking to hedge or diversify their investments.
-BASE can be used as a collateral asset to hedge on leveraged crypto trading. Say a trader borrows 100 BASE to buy an altcoin, and that altcoin plummets alongside a bearish trend in crypto markets. When the trader pays their 100 BASE back to the lender, he notices the value of that BASE also dropped — correspondent to the crypto market. This means that when he pays the loan back, he only absorbs the loss he took that was in excess of the overall loss in the market. In this way, BASE can be used as a strategic hedging instrument for crypto-focused portfolios trading on leverage.
- BASE can be used as a safe haven position between crypto transactions. Typically, one might trade into a “blue chip” crypto to reduce risk exposure. Trading into BASE mitigates the inherent risk of holding one coin, while absorbing the potential gains of several others. So far, the most popular safe haven crypto asset is Bitcoin, as it generally leads industry direction and is historically the least volatile. The ability to “hold” the entire crypto market should present a useful trading alternative.
- BASE can be useful as a price reference for any cryptocurrency. If a trader is speculating on an altcoin (x), he will often track price in terms of x/BTC rather than x/USD. This price reference illustrates how the altcoin performs relative to BTC rather than USD, which is the more important data for many crypto traders. If the trader instead uses x/BASE as their price reference, it would illustrate how x performs relative to the overall crypto market, rather than just BTC. The x/BASE price reference should present a valuable alternative to the popular x/BTC price reference.
Q10. Can you explain how is your Tokenomics Distribution? How many tokens Will be minted ? And How many tokens Will be locked by the team?
Q11. Southeast Asia is a very vibrant market and many project developed here so with your project what do you think about Southeast Asia and do you have any plan to develop here?
Ans — We are actively talking with Korean, Vietnamese, and Indonesian strategic partners now. We definitely understand the value in the Asian markets, and will be exploring growth there as well.