Editor's Note: This article comes fromChatting with Xiaozha (ID: xiaonazha88), reprinted by Odaily with authorization.
Editor's Note: This article comes from
Chatting with Xiaozha (ID: xiaonazha88)
Chatting with Xiaozha (ID: xiaonazha88)
, reprinted by Odaily with authorization.
In the morning, I saw a Weibo post by He Taiji, what a guy so violent.
I quickly checked what BAC is. According to the information on Lianwen: the algorithmic stable currency project Basis Cash was launched by an anonymous team, and the code has also been open sourced on Github (I didn’t see any audit information).
Basis, an early DeFi algorithmic stablecoin project, was shut down due to the risks associated with the SEC, while Basis Cash was built by a group of anonymous developers who were not afraid of the SEC, with no venture capital investment, no token sales, and no pre-sale tokens. currency.
There are three types of assets in the Basis Cash system:
1) BAC (Basis Cash) is a stable currency that is pegged to the price of the US dollar;
3) BAS (Basis Shares) can collect the surplus of seigniorage in the system.
I opened the Basis website and saw that this $1-anchored Basis Cash actually sold for $403. What a guy, it’s crazy.
Stablecoins are a big market. In addition to centralized stablecoins, such as USDT, BUSD, and USDC, various algorithmic stablecoins such as AMPL are also booming. Who makes the stablecoin market so big.
The following is a summary of the characteristics of the BAC algorithm stable currency.
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Basis Cash Algorithm Central Bank
There are currently many stable currency mechanisms, such as AMPL's Elastic Stablecoin.
Basis Cash uses an "algorithmic central bank" that manages token supply according to predetermined logic. The algorithm is responsible for balancing the supply and fluctuating demand of stablecoins, ensuring that token prices remain relatively stable. There are two important contracts here: the treasury and the boardroom.
1) Treasury
The vault exists to enable the redemption of BAB.
When the BAC price is below 1 DAI, the vault does not allow redemptions to avoid prematurely cutting losses for BAB holders and causing unnecessary downward pressure on the price of BAC.
Since the price of BAC may experience significant fluctuations during its initial distribution phase (first 5 days), the treasury plans to start after the end of the initial distribution (starting from the 6th day of listing) to give the BAC market enough time to stabilize, after which the protocol effectively utilizes the stable mechanism to prevent further price deviations.
2) Board meeting room
The Board allows holders of BAS shares to claim the excess BAC specified in the agreement (see below for excess BAC). BAS holders can link their proportion to the board of directors contract, and then they can obtain the BAC token share allocated to the board of directors in proportion.
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Basis Cash Stability Mechanism
The Basis Cash protocol is designed to ensure that BAC tokens are exchanged at a value of $1, and the stabilizer (in-protocol stabilization mechanism) is responsible for adjusting the BAC supply to match demand.
Every 24 hours, the time-weighted average of the BAC-DAI exchange rate is read from the Uniswap v2 contract, and then passed to the Basis Cash protocol for its stability mechanism reference.
When the BAC price is higher/lower than (1+ε) DAI, the stabilization mechanism will be triggered, where ε is a parameter defining the stable range of the BAC token price, and the initial value of ε is set to 0.05.
1) Tightening strategy
At any time, BAB can be purchased from the protocol in exchange for BAC.
The purchase of BAB is carried out at the price set by the algorithm. For example, when the price of BAC is x DAI, BAB is sold at the price of x BAC (the effective price is x^2 DAI), and BAB holders are promised to receive a premium when redeeming . When conditions are met, BAB can be converted to BAC.
Of course, if the price of BAC exceeds 1 DAI (x>1), BAB can still be purchased, but the purchase is definitely a loss. For example, when 1BAC=1.1DAI, BAB is sold at a price of 1.1BAC, and 1BAB can only be redeemed for 1BAC.
Therefore, BAB buying is only expected to occur when 1BAC trades below 1DAI. While it is still possible to buy BAB when the protocol allows the BAC price to be higher than $1, it is disabled on the basecash front to avoid user confusion.
When the price of BAC is higher than (1+ε)DAI, the system will generate totalSupply*(oraclePrice-1) new BAC tokens.
Depending on the vault's BAC balance, newly issued BAC is either deposited into the vault or into the boardroom.
If the vault has a balance of more than 1000 BAC, then it is reasonable to assume that either all BAB has been redeemed, or no current BAB holder is willing to make a redemption. Either way, it shows that there is currently no need to redeem BAB, so the newly generated BAC is provided to the board room contract.
If the balance of the vault is less than 1000 base cash, it is assumed that there will be additional BAB to BAC redemption demand. Therefore, the issued BAC is transferred to the vault so that BAB holders can exercise their redemption rights.
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How Basis Cash is issued
Basis Cash has no private placement, no pre-mining, and no reservation.
