BASE Protocol Reinvents The Use Case of Crypto: A New Dawn of Open Finance

Decentralized Finance, DeFi, is one of the major highlights of the year 2020 in the blockchain industry. DeFi has witnessed a tremendous growth with most projects built on Ethereum as the underlying DeFi infrastructure. Apart from the popular open finance sectors such as decentralized exchanges, stablecoins, synthetics, derivatives, decentralized insurance, lending and borrowing protocols, a new surging area of interest is price-elastic tokens.

Price-elastic tokens are are tokens in which the total token supply is not constant but automatically adjusts based on market demand. This automatic adjustment of total token supply is termed rebase. While elastic token supply projects are still very nascent compared to the rest of the DeFi sectors, they are warming their way into spotlight.

Elastic supply tokens are interesting because they forge the path to access new types of open finance. However the few elastic supply tokens available in the market are similar and limited in scope. None can be used to speculate on the total crypto industry with one token. Generally, these tokens are pegged to the price of a single token which may expose investors to the risk of volatility associated to the underlying crypto.

A new project - Base Protocol is recreating elastic supply token by issuing a single token that enables users to speculate on the entire crypto market cap.

What Exactly is Base Protocol?

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Base Protocol is a rebasing protocol that enables BASE token, the native token of the protocol, to track the price performance of the entire cryptocurrency market. Leveraging the well established Ethereum blockchain, Base Protocol is built on an elastic token supply mechanism which adjusts frequently to attain an equilibrium between BASE market price and BASE target price. The cryptocurrency market cap adopted for the rebasing mechanism is sourced and aggregated through a secure integration with Chainlink Oracle.

Since BASE Protocol is built on top of the Ethereum blockchain, BASE is issued as an ERC-20 token. Since BASE Protocol works on a rebasing mechanism, it automatically expands or contracts BASE tokens in circulation to adjust scarcity and sway price in tandem with the total crypto market cap.

BASE Token
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BASE token is the native token of the Base Protocol. It is designed to be used as a speculative and crypto index token, and an alternative base-currency for the crypto-economy. Currently, there over 6000 cryptocurrencies in the market but BASE token is that one token that represents all combined together. By holding BASE, holders have exposure to the performance of the whole cryptocurrency industry. This function is achieved by affixing the price of BASE to the total market capitalization of all cryptocurrencies.

The price target of BASE is a trillionth of the total crypto market cap. That is if the crypto market cap (CMC) is $500 billion, BASE price would be $0.50. However, the price of BASE is not restricted to CMC as the price can rise beyond this computation. But the rebase mechanism activates to drive the price back to equilibrium with the target price that stably tracks CMC.

What's the Unique Proposition of BASE Token?
Yes, there are a number of rebase tokens in the market, but each of these tokens is pegged to a single underlying digital asset, usually another cryptocurrency.

BASE token is the first rebase token in the world that is pegged to the total cryptocurrency market cap. In other words, BASE is the first and only S&P 500 of the crypto industry. This way, BASE token redefines and expands the utility of a rebase token by covering all cryptocurrencies under a single token.

Specific Use Cases of BASE Token
BASE token is designed to serve various utility purposes, which can boost confidence and support for the crypto sector altogether. These use cases include:

BASE as a Crypto Index
The crypto industry needs a crypto index token, one that reflects the total market cap. BASE token lives up to this expectation and acts, by default, as the only S&P 500 of the entire cryptocurrency market.

BASE token, as a crypto index, is designed to measure the performance of the entire crypto market. BASE token can help crypto newbies, experienced traders, and institutional investors to diversify their crypto portfolio, hedge their investments or invest in a digital asset that steadily tracks the performance of the crypto market.

BASE as a Synthetic Crypto Asset
Synthetic assets are digital assets that track the value of an underlying asset. BASE is designed as a synthetic asset and it mimics the market cap of all listed cryptocurrencies available in the space. Investors do not have to hold or own these other cryptos because BASE tracks the performance of all the crypto combined together.

BASE as a Safe Haven
Crypto investment is generally risky but crypto traders and investors can add BASE to the mix to mitigate investment risk and access a safe haven position between crypto transactions due to its countercyclical behavior (expansion and contraction in response to entire crypto market movement).

BASE can provide investors and traders with the opportunity to escape from the risk and volatility of holding a single crypto. Since BASE tracks the entire crypto market cap, the token mitigates the risk associated with holding just one token while aggregating the potential gains and price growth of thousands of others.

BASE as Collateral Asset
Another of the utility of BASE token is as a strategic collateral asset for crypto-based leverage trading. BASE's elastic supply movements make it perfect for use as a collateral as it absorbs any price trend of crypto, ensuring traders only take losses or gains in excess of that of the market.

BASE as Price Reference for Other Cryptocurrencies
The gold standard for referencing price of cryptocurrencies is Bitcoin, now with USDT also becoming popular. This price reference is however limited to how the token performs relative to a single crypto. Using BASE as a price reference provides an alternative value and insight to how the altcoin performs to the entire crypto market.

Which is the Team behind Base Protocol?
Considering the incipient state of the cryptocurrency industry and in a bid to give a face to the project, BASE Protocol has decided to deanonymize its team.

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BASE Protocol is led by a strong team of experts with extensive experience in the blockchain industry. From Chris Peña, who is the Head of development, to Dylan Senter, the marketing and business development person, BASE Protocol combines more than 3 decades of expertise that will be transferred to growing the project in the long-term.

Final Note
The cryptocurrency space has continued to soar with tens of new DeFi projects introduced from time to time, however, Base Protocol is unique, offering a solution that has been yearned for but remained unmet until now. With BASE token, investors and traders now have access to a token via which they can measure the overall performance of the crypto market, and diversify their crypto investment.

BASE Protocol reinvents the use case of cryptocurrencies. A new era of borderless finance is here.

Official Links
Click on the links below to get more information on BASE Protocol:

Website: https://www.baseprotocol.org/
Twitter: https://twitter.com/baseprotocol
Telegram: https://t.me/baseprotocol
Bitcointalk ANN: https://bitcointalk.org/index.php?topic=5283589.0
Medium: https://medium.com/@BaseProtocol

Author's Details
BTT Username: Mexite
Bitcointalk Profile Link: https://bitcointalk.org/index.php?action=profile;u=1418203

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