Basis Cash is an algorithmic stablecoin that is open-source in nature. According to the official documents, the Basis Cash protocol tries to bring back the original idea of basis.io, first published as a lightweight Ethereum blockchain implementation.

Although there are many different stablecoin processes, Basis Cash uses an "algorithmic central bank" approach to govern the supply of tokens according to a set of rules. The algorithm is in charge of matching the stablecoin supply with variable demand in order to keep the token price stable.

Basis Cash tokens aim to serve as a medium of exchange. Their supply is expanded and contracted via a built-in stability mechanism, which keeps them tied to the MakerDAO ‘Multi-Collateral Dai’ token.

Basis Shares represent the value of the Basis Cash network. If there is enough demand for Basis Cash, fresh tokens are produced and issued to Basis shareholders, assuming the Treasury is fully stocked. Holders of Basis Share tokens are entitled to a pro-rata share of the accumulated Basis Cash tokens in the Boardroom contract.

There are no pre-allocations to the founding team or external traders in either Basis Shares or Basis Cash. Instead, shares are granted to members of the community who perform acts that benefit the network. The protocol's long-term viability benefits from a fair, open distribution of the whole token supply, rewarding those with a stake in the network rather than speculators looking for quick profits. Further, spreading BAS rewards creates a significant financial incentive for network bootstrapping, resulting in increased adoption through network effects. For example, rewarding Basis Cash liquidity providers prevent the currency from depreciating excessively, which could be harmful to the network.

The whitepaper was first published on June 20, 2017.