Introduction
BaseFi is a community driven project incubator, staking platform and DAO dedicated to cultivating the growth of the Base ecosystem. Our vision is to serve as the foundation of the Base ecosystem, built upon three fundamental pillars:
Staking: Participate in staking activities across a range of popular Base coins and get rewarded in BaseFi tokens.
Project Incubator: Access opportunities to participate in vetted token launches and early-stage projects within the Base ecosystem.
The Cabal: An exclusive inner circle for Base chain & BaseFi investors, offering unique benefits and networking opportunities.
Why is BaseFi positioning itself in the Base ecosystem?
BaseFi is at the heart of a vibrant and rapidly growing community of investors and developers on the Base chain. We are optimistic on Base for several key reasons, which will help to benefit the growth of BaseFi:
Base is a L2 blockchain that benefits from faster transaction speeds and reduced costs through optimistic roll-ups, while being secured by the Ethereum L1 blockchain.
This results in a user experience that is faster, more reliable and cheaper than competing blockchains such as Solana.
A key factor setting Base chain apart is backing from Coinbase, which not only enhances its credibility but also provides a seamless onboarding channel to millions of users through the Coinbase app.
BaseFi aligns with the Base ecosystem, tapping into the Coinbase network effect to offer a community driven project incubator, promising significant growth potential with sustainable token economics, first mover advantage and DAO governance.
How is revenue generated to pay for staking emissions?
Once the first incubator projects begin to launch, BaseFi will start generating revenue through fundraising fees. These fees can be utilized in several ways, such as buying back tokens from the market to replenish the rewards pool or further developing the BaseFi platform and ecosystem. The use of this revenue will be determined by the DAO, allowing the community to decide how best to allocate these funds once they are available.
Although BaseFi will not directly generate revenue from incubator projects at launch, several elements have been strategically implemented to support a sustainable market over the first phase of launch:
Locked ETH liquidity from staking
When users purchase and then stake BaseFi tokens, the process has a dual effect on the market dynamics. First, the Ethereum (ETH) used to buy the tokens remains in the Uniswap liquidity pool. This is because once the tokens are staked, they are not available to be sold immediately, effectively locking up the ETH in the pool. This action deepens the liquidity on Uniswap, making it easier for others to trade without causing large price fluctuations.
Secondly, staking the BaseFi tokens takes them out of the circulating supply. This reduction in available tokens can help support and increase the token's price by creating a scarcity effect. The fewer tokens available for trading, the more valuable those that are available can become, especially if demand for them remains strong.
Early unstaking fees
Another feature that benefits committed participants in BaseFi involves the early unstaking fee. If users decide to unstake their BaseFi tokens before the agreed-upon term ends, they incur a penalty. Specifically, 30% of the tokens they had staked are deducted and redirected back into the staking rewards pool. This penalty serves to replenish the pool, thus increasing the rewards available for users who continue to stake their tokens for the full term.
Staking distribution curve
The staking rewards distribution curve for BaseFi is designed to offer a sustainable and attractive Annual Percentage Rate (APR). It balances the expected initial market demand with projections for future market capitalization increases and long-term staking emissions. The daily staking rewards are calculated as 1/170th of the remaining rewards pool. As a result, the maximum daily reward amount in BaseFi tokens gradually decreases as the platform's adoption grows and the market cap expands. This structure ensures sustained staking emissions over the long term, while also providing higher rewards initially to incentivize early lockups and participation.
How do we plan to onboard high quality projects for incubation?
As a community-led DAO without venture capital or seed funding, we have strategically devised a plan to foster community engagement, attract investors, and encourage deep commitment through a series of incentives.
This approach is organized into a three-step funnel aimed at cultivating a robust community, which in turn initiates a self-sustaining cycle of growth and innovation that draws in high-quality projects for incubation.
Step 1: Engage and Expand
To broaden awareness and engage the community, we collaborate with Key Opinion Leaders (KOLs) and advisors, launching social media campaigns. We offer incentives such as referral programs and rewards for content creation, actively involving community members. Additionally, we introduce flexible community staking that allows members from other Base chain communities to stake their tokens in exchange for BaseFi tokens, with no penalties for early unstaking. This provides an accessible entry point into BaseFi, encouraging initial participation.
Step 2: Deepen Commitment through Staking
We then encourage users to increase their commitment by staking BaseFi tokens for a fixed period, enhancing their rewards. This lock-up period ensures long-term liquidity and keeps users engaged with the BaseFi ecosystem, demonstrating and reinforcing their investment commitment.
Step 3: The Cabal
At the core of our investment community is The Cabal, the governing DAO of BaseFi. Membership in The Cabal is designed to incentivize substantial and long-term token investments, reflecting a serious commitment from investors. Cabal members receive special benefits, such as exclusive opportunities to curate and invest in incubator projects under more favorable terms.
Activating the Community Flywheel
The community staking pools and The Cabal drive our community flywheel, propelling BaseFi towards sustained growth:
Community Staking Pools: These pools serve as entry points for a wide audience, allowing them to earn rewards and become active participants in our ecosystem.
The Cabal: This group draws dedicated investors with additional staking rewards, deal flow, and networking opportunities, solidifying a core of committed contributors.
Cyclical Growth: As participation increases, the resultant community activity attracts solid projects, enhancing the ecosystem's appeal and leading to further community and project success.
This ongoing cycle of engagement, collaboration, and project development continually fuels the BaseFi flywheel, driving the expansion and progression of our thriving community.
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