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.

If crypto market cap is $1 trillion, BASE is pegged to $1.00.

If crypto market cap is $2.5 trillion, BASE is pegged to $2.50.

Crypto Index

The Base Protocol acts as a one-stop trading instrument which allows holders to speculate on all cryptocurrencies

simultaneously, rather than just one or a select portfolio of multiple. It allows traders to agnostically invest in the

entire crypto ecosystem. This is its primary function.

The Base Protocol can also be used as a tool for more nuanced trading situations:

Save Haven

BASE can be used as a transitory, “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.

Price Reference

Another use case is for BASE to function as a price reference for all cryptocurrencies. 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 x

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.

Lending Instrument

BASE can also be used as a lending instrument to hedge on leveraged crypto trading. Traditionally, lending has been

a challenge in crypto; if an individual borrows 1 BTC to buy a car, they could be on the hook for much more than

they originally borrowed when it’s time to pay that 1 BTC back. This volatility presents a problem in borrowing

crypto for general purposes, but can be useful if borrowing for crypto investing. Say a trader borrows 100 BASE to

buy an altcoin, and that the altcoin plummets alongside a bearish trend in the crypto markets. When the trader goes

to pay their 100 BASE back to the lender, he notices the value of that BASE also dropped – perfectly 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. And vice versa, if his altcoin went bullish, he would only absorb the gain in excess

of overall market performance. In this way, BASE can be used as a strategic hedging instrument for crypto-focused

portfolios trading on leverage.

The ability to speculate on the entire crypto market with one synthetic instrument lends itself to use cases like these

and many others. Those interested in exploring these use cases can build on the Base Protocol to create relevant,

second layer products.

How to Participate in the Cascade

The purpose of the BASE Cascade is to reward BASE holder for contributing liquidity to the Uniswap liquidity

pool. To participate, a user must first deposit BASE and ETH into the Uniswap liquidity pool. While these tokens are

deposited, the user gets a percentage of the transaction fees produced from trading activity in the pool, proportionate

to the network percentage that was deposited. The user’s Uniswap balance is still affected by supply rebases.

Once a user’s BASE and ETH are deposited into Uniswap, the user is issued LP tokens in return. These tokens

represent proof that the user’s BASE and ETH are deposited in the pool. The user can now stake those LP tokens to

earn additional rewards through the Cascade.

This is how the BASE Cascade it works:

1. Deposit BASE & ETH in Uniswap liquidity pool in exchange for LP tokens

2. Visit the BASE Cascade dashboard

3. Deposit LP tokens into the Cascade

4. Track rewards multiplier / balance

When a user first stakes in the Cascade, their rewards multiplier starts at 1x. After 30 days staked, the multiplier

reaches 2x. After 60 days staked, the multiplier reaches 3x. This works linearly, so the multiplier is progressively

growing every day. 3x is the ceiling for the multiplier.

A user can deposit as much or as little liquidity as they’d like to participate in the Cascade. They can withdraw their

liquidity whenever they’d like, but would lose the bonus progress they’ve made up to that point. So if you’ve been

staking for 45 days, you would have a 2.5x bonus multiplier. If you withdrew, you would miss the opportunity to

reach the 3x multiplier over the next 15 days.

The Cascade dashboard displays these relevant metrics to the user:

- Deposited balance

- Time staked

- Annual % yield

- Rewards multiplier

- % of rewards pool

- Rewards balance

The main takeaway is this – if you deposit tokens into the liquidity pool and use the Cascade, you should to try to

stay in the Cascade for at least 60 days to maximize rewards.

Note: Due to the potential for impermanent loss, users may receive a different distribution of tokens upon

redemption to Uniswap than initially added.