A new direction for BASK

Motivation

We’re dropping a new low-risk product — BMI: BasketDAO Money Market Index. It’s a diversified stablecoin farming index powered by Yearn, aimed at stable farmers and treasuries. We feel it’s a strong product and it complements BDI on the risk spectrum, particularly in this bear market. So we’ll aim to give it the best launch boost we can.

Before we do that though, we need to talk about BASK.

BASK in its current form does not make good incentivisation. Its flaws raise a lot of questions among buyers and low BASK appeal = ineffective incentivisation.

With all of our learnings, we propose the following new direction for BASK.

Max Supply

BASK will enforce a fixed supply of 100,000 by minting the remainder to The Treasury and then stopping emissions. The Treasury will then be responsible for setting up incentive programs using its finite BASK balance.

After fixing supply, increase BASK-Minting timelock from 24hrs to 1 week, to further ensure future supply changes cannot be made in stealth.

This max-cap will remain definite until future BASK holders vote to change it. Given token holders generally prefer a lower supply, the future proposal will have to be compelling.

Vesting

Discard the vesting concept going forward.

All vested rewards will still be paid out as they mature. UI will be available as we get closer to the first batch of vested rewards maturing.

Product Incentivisation

Our aspiration is for our products to stand tall on their own merits rather than relying on incentivisation. Hence, BASK incentives will only be used to support product launches in the short term instead of offering a long-lasting farm.

For 4 weeks after BMI’s launch, there will be a single-stake BMI pool where ~200 BASK is emitted each day.

As for BDI and BASK, there will be new double-dipping pools for BDI-ETH and BASK-ETH liquidity providers. The existing double-dipping issue will be fixed by moving away from the Masterchef Contract.

The new pools will each received an increase in BASK emissions. That’s without vesting and of course, it farms Sushi on Onsen for you.

This is the final BASK incentive for liquidity providers and will last for 2 weeks. So remember to migrate your staking when the new pools go live.

After BASK incentives end, BDI-ETH and BASK-ETH liquidity providers can still farm on Onsen.

The social minter/burner will be turned on for BDI to allow low-slippage entry/exit, with the gas cost covered by The BasketDAO Treasury.

Revenue Share

The original thinking was that revenue-share increases token appeal. However, it’s apparent now that the market also cares about protocol earnings, and rightfully so. Retaining protocol revenue allows it to grow more effectively by reinvesting earnings into new products, R&D, marketing, exchange listings, and many aspects of protocol growth.

Our experience of running BasketDAO thus far has painfully taught us the importance of treasury management. Here’s a good article from Blockchain Capital Blog to sum it up: DAO Treasury/Balance Sheet Management.

The decision effectively becomes: do you want dividend now, or growth now and dividend later?

We believe the protocol should aim for growth now and consider revenue share later as it matures.

If this proposal passes, xBASK will receive one final profit distribution and then all future xBASK profits will be redirected to The Treasury for purposes of protocol growth, until future BASK holders vote to turn revenue-share back on.

Inspired by Yearn, BasketDAO Treasury will spontaneously buy back BASK when times are good, effectively achieving non-systematic revenue share.

Timeline

[Now] This article drops and a new channel “new-bask-direction” is created on our discord where discussions can take place.

[June 30th, UTC+2] Proposal is finalised and published on Snapshot, and voting begins.

[July 4th, UTC+2] Voting ends. The supplementary proposal begins voting today.

[July 6th, UTC+2] Supplementary proposal passes:

  • Treasury mints BASK to 100K
  • New double-dipping pools created for BDI-ETH, BASK-ETH, allowing 48hrs of pre-staking before emissions begin
  • Emissions stop for old pools: BDI single-stake, BDI-ETH, BASK-ETH; Incentivising you to migrate to new pools so you do not miss out on new rewards
  • Final xBASK profit distribution until revenue-share is turned back on

[July 8th, UTC+2] Double-dipping pools begin emission, allocations are 200, 400 BASK per day for BDI-ETH, BASK-ETH

BMI will aim to launch around early July, more details to come.

Final Thoughts

In summary, this proposal:

  • addresses uncertainty around BASK total supply, making it 2x more scarce than originally intended
  • addresses existing vesting confusion
  • commits to only short-term product incentivisation and outlines a path forward for existing farmers
  • postpones systematic revenue-share indefinitely to focus on protocol growth
  • repositions BASK as a useless governance token

In doing this, we hope we’ve made the strongest case for BASK we can think of, timed with the launching of our new money market product.

This proposal has sourced its inspiration from our past learnings, our advisors and other protocols. It aims to strike a balance between market conditions, resources and growth.

This has been the subject of constant discussion among the team, and we hope you’ll give this proposal your full consideration.

Join the discussion on our discord.

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