What is Base Protocol?

Base Protocol (BASE) is a unique token that aims to mirror the total market cap of all cryptocurrencies at a ratio of 1:1 trillion. This innovative approach enables users to observe the entire crypto industry with a single token. BASE is built on the Ethereum blockchain and integrates a Chainlink oracle. The token's price is designed to be elastic, programmatically expanding or contracting to achieve target price equilibrium. This equilibrium is based on the total market capitalization of all cryptocurrencies, allowing BASE to reflect the overall health and direction of the crypto market.

How does Base Protocol work?

Base Protocol operates on an elastic supply protocol, which programmatically adjusts the token supply to achieve target price equilibrium. This equilibrium is calculated as one trillionth of the total market capitalization of all cryptocurrencies. When the market price of BASE deviates from this equilibrium, the token supply is adjusted through a process called a rebase. If the market price is higher than the equilibrium, an expansion rebase occurs, creating new supply and driving the price down. Conversely, if the market price is lower than the equilibrium, a contraction rebase occurs, reducing the supply and driving the price up. Users may also contribute their BASE tokens to the liquidity pool to receive compensation through the Base Cascader.

What are the potential use cases for Base Protocol?

Base Protocol has a range of potential use cases. It can serve as a one-stop trading instrument, allowing holders to observe the entire crypto industry rather than individual tokens or a select portfolio. This could be particularly useful for newcomers to crypto or institutional users seeking to diversify their involvement. BASE can also be utilized as a borrowable asset for leveraged crypto transactions, acting as a strategic hedging instrument. Additionally, BASE can serve as a stable position between crypto transactions, mitigating the risk of holding a single coin while potentially benefiting from the gains of several others. Finally, BASE can be used as a price reference for any cryptocurrency, providing an alternative to the popular BTC price reference.

What is the history of Base Protocol?

The Base Protocol team has developed an open-source code, which is accessible on the Base GitHub. The team continually updates this repository as new developments are made. The Base Protocol was built on the Ethereum blockchain, integrating a Chainlink oracle, and was launched on a decentralized exchange. The team has also compiled a detailed document outlining the token distribution stages, total supply breakdown, and vesting schedules for all allocations, demonstrating their commitment to transparency and user education.