Base Protocol: The financial protocol king. The stable peg to all cryptocurrencies as one! by frankydoodle

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· @frankydoodle ·
Base Protocol: The financial protocol king. The stable peg to all cryptocurrencies as one!

Hello everyone! This is your Mr. Decentralized again that will be discussing another interesting topic about blockchain, coins, and tokens that surrounds the crypto space. Today  I will be talking about Base Protocol and why it is important to look into this token. We will cover the basics, features, and use-cases of this token. 

We came across different eras in the cryptocurrency market. There are ups and downs but we are still here and following the vision of Satoshi Nakamoto. From the history of the first blockchain to now different use-cases and so many coins and tokens around the space. It is tedious to research and monitor different coins or tokens at once and so many pumps and dumps that are happening. Especially if you do want another project to another and to another which is time-consuming. Which is I feature Base Protocol. Wherein once you own it, you are mimicking the entire crypto market just by holding the coin based on the entire market cap of the entire crypto industry. 


# What is the Base Protocol?

---> Base Protocol is a protocol that is also a digital asset wherein you as a cryptocurrency enthusiast and believer buys the $BASE token to track the entire cryptocurrency market and its market cap as a whole. It is on the BASE protocol website that the price of each BASE tokens is pegged to the total market cap of crypto capitalization with a ratio of 1:1 trillion. Meaning, that for every $1 USD worth of BASE, is 1 trillion in total market cap of the entire crypto market. Hence, if the entire crypto market capitalization goes 2 trillion USD, then each BASE will also become $2 USD each. On the other hand, if the market cap of the crypto is only 0.5 trillion USD, then the BASE token will only be $0.5 USD as well. But here's the catch, you may ask me, what if there is a disruption in the price of the token due to buying and selling to reach the target price as it is what it should be pegged? Good question. There comes now the features, use-cases and advantages of the BASE protocol which is in the next discussion. And let me remind you guys, this protocol as per the website is like the S&P 500 of crypto. Which will be launching by November 30th of this year!


# Features of the Base Protocol and its competitive advantages

## 1. Elastic Finance BASE token


---> When we say that the BASE protocol is elastic, meaning that the supply changes depending on the demand. I would like to input here from what the BASE team and I quote 
> 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.

What does it mean in here that if there is a disruption on the price where the peg is currently, the token readjust its supply to meet the price and reach the equilibrium the same as the current coinmarket cap is. And that is being done through what we call as 'REBASE'. Which is the next feature to talk to.

## 2. Rebase


---> This is where the 'elasticity' happens. It is called a rebase. First, let me show you what is the technical of rebase means as per the BASE protocol team again. And I quote:

> Supply expansions / contractions are called rebases.
Rebases occur when bmp β‰  (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.

Let me explain to you how that works. As we already discussed above, there is elasticity in the supply of the BASE protocol token. Meaning, the tokens have no fixed supply. They are contracting and expanding depending on the demand of the token. So, once you buy a BASE protocol token after the rebase based on the protocol's algorithm, you may have more tokens at hand or you may have fewer tokens at hand. But do not worry! The rebase is just the adjustment of the supply. Meaning, ALL of the holders of the BASE token has their wallet increase or decrease in their holdings. Therefore, there will never be a dilution of the tokens that you own. You still are holding the same amount of percentage of the network unless you will buy or sell BASE tokens.

## 3. Synthetic 


---> When we say the word 'synthetic' it means pseudo or 'mimicking' something with the same traits, characteristics, and actions of the one we are mimicking. Say, for example, you want to create an asset that follows the stock market like Berkshire Hathaway, you can use BASE tokens to mimic the movement of that stock like Berkshire Hathaway of Warren Buffett. Aside from that, not only stocks can be the use-case for BASE tokens. It can be minted to be a synthetic asset like Stable coins to be used for borrowing and lending for DEFI. Or it can also be used to act like a volatile asset if needed. Like BTC, ETH, LTC, etc. any asset you want! Which makes the BASE tokens be useful for financial usage without using the native tokens or coins.

## 4. Cascade


---> I am an Ampleforth liquidity provider. And as you can see, BASE protocol also has their inspiration from the AMPL protocol to have a token that will support the overall market cap of the tokens circulating in the crypto market. The Cascade is basically a type of liquidity mining program where the stakers of BASE tokens and a specific pair of token to be supplied into the liquidity pool will earn them incentives from the BASE protocol by being a liquidity provider. Therefore, it is really rewarding to be a liquidity provider for BASE protocol. The elastic protocol for the whole market cap of crypto!



## 1. BASE token as a crypto index token


---> As what I am keeping on emphasizing here guys, The BASE protocol is the equivalent of UITF, Mutual Fund, PSEI, S&P 500, NASDAQ, and anything you could think of as a measurement of economic stability. But in this one, it is all those equivalent in CRYPTO industry. In a quick summary, why would you buy each crypto, if, with BASE token, you already bought the entire crypto market cap! The ones that could buy these are the financial institutions that would want to invest in the cryptocurrencies with the lowest risk possible because it is already a crypto index fund. Aside from that, it can also be interesting for people of all ages to buy this crypto index token for maximum exposure whilst minimizing the risk. 

## 2. Borrowable asset and lendable asset 


--->  The beauty of Base protocol is that it can be used to be a borrowable or lendable asset for trading. If you are a trader and wanted to hedge your trades to minimize risk, you can use BASE tokens as a borrowable asset. Since the BASE represents the entire crypto market, if ever the trader is at a loss when he/she used BASE as a borrowed asset to buy an altcoin and if he/she will repay back the loaned BASE, the BASE rate in USD will also be lower. Hence, it only makes implies that the only loss of the trader is the one where he/she bought which is the altcoin. This is also the same when he won in the trade and vice versa. 

##  3. Safe Haven in Crypto holdings


---> We all know here that crypto is a volatile market. Whether it be BTC, ETH up to the lower in the market cap. Especially for those in the lower market cap, wild swings can be experienced here. But when you buy BASE tokens, you do not need to worry anymore about volatility because what you are only about that you need to do is market cryptocurrencies more and give awareness. Because you are only concerned with the overall market capitalization of it. Amazing right? It is like having your retirement fund but in crypto. 

## 4. Price Basis


---> As a trader in crypto, most of the base pairs are either BTC, ETH, XRP, LTC, and etcetera. Base Protocol's vision and one of the missions is to have the BASE protocol token to be a  base pair when trading. Because if the BASE token will be the base pair, You will be more accurate in checking the market health whether it is bullish or bearish. Therefore, giving you more accurate trade decisions that will give you more time to give a knowledgeable buy and sell signal from you with conviction. With this type of (altcoin)/BASE pair, we can be more confident to make this a possibility of profit in the short, medium, and long term investments. 




---> Guys, just a primer about this rebase because all of the information can be accessed via their white paper which I will also input here later. This is the main emphasis of the elastic supply of BASE protocol. If you would see above, it is the supply that reacts to price change as well. Not the price only. To match the equilibrium based on the price oracles, the rebase will do the computation to incentivize the lag time between rebases for buyers and sellers. If the price is below the target price, it contracts the supply to have the price get distributed to the remaining supply. While if  the price is too high above the target price to reach the equilibrium, the rebase expands the supply so that the price gets distributed to the network. 








Thank you so much guys for reading this exclusive post regarding BASE protocol. I am excited about this project as well because I am a fan of rebasing tokens! By the way, if you wanted to apply for the presale, you may go here to this link:

If you want to know more about the BASE protocol project, you may go to their website, check the white paper, lite paper and their social media channels below:


White paper:

Lite paper:

Token pre-sale:

ANN thread:







About the author: 

Proof of authentication link:

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