Overall guide for Basis Cash

Step by step process towards stabilization.

DeFiMorty
DeFiMorty
Nov 17, 2020 · 5 min read

Unlike other DeFi protocols, Basis Cash has two farmable tokens. One is Basis Cash, a stable coin that seeks to be valued at $1. The other is Basis Share, an ownership token which receives inflationary rewards from Basis Cash, deriving value from the increased adoption of Basis Cash. This guide will give you a step-by-step overview of the distribution process's mechanism.

How the Basis Cash mechanism works

The protocol consists of three tokens (Basis Cash, Basis Share, Basis Bond), with Basis Share and Basis Bond designed to move Basis Cash towards the price of $1. The following scenarios describe how Basis Share and Basis Bond work, with the first scenario assuming that the price of Basis Cash is above $1 and below $1 in the second.

When Basis Cash is below $1

When Basis Cash is traded below $1, users will be able to purchase Basis Bonds at a certain discount to establish the price stability of Basis Cash, with the expectation of future profits upon redemption.

Each bond promises the holder exactly 1 Basis at some point in the future under certain conditions. Whenever a user purchases Basis Cash, it is burned, causing a decrease in the circulating cash supply. Bonds do not have interest payouts, nor do they have maturity or expiration dates. Rather, they can be redeemed on a 1:1 ratio with Basis Cash when the price rises above $1.

Purchased bonds can be redeemed on a 1:1 ratio with cash only when the oracle price of cash is above $1. This prevents bondholders from cutting their losses on redemptions and creating unnecessary increases in supply.

When Basis Cash exceeds $1

When the price of Basis Cash exceeds $1, the contract primarily allows bond redemptions to bond redeemers. Even after the bonds are redeemed, if the price of Basis Cash is traded above the price of $1, an increase in the demand of Basis Cash results in new Basis Cash tokens being minted and distributed to Basis Share holders.

For instance, let’s assume that the price of Basis Cash exceeds $1 even after bond redemption. In this case, the Treasury contract mints new Basis Cash seigniorage into existence. This seigniorage is given to the Boardroom, where users can stake Basis Shares and earn daily seigniorage based on the price of Basis Cash.

Distribution Overview

Zero supply minted / purely via community distribution.

The initial distribution of Basis Cash prioritizes those who deposit DAI (MCD), yCRV, USDT, sUSD, and USDC to the distribution contract. A total of 50,000 Basis Cash tokens are distributed to depositors, with 10,000 Cash tokens distributed per day. An equal amount of tokens is assigned to each stablecoin pool, with the amount of stablecoin deposits limited to 20,000 tokens per pool.

Afterward, Basis Shares is distributed to those that provide liquidity to the Basis Cash(BAC)-DAI Uniswap v2 pair, where users can deposit LP tokens to the distribution contract and earn Basis Shares. The BAS pool 1 will distribute 750,000 Basis Shares, starting with 6250 Basis Shares and decreases 75% after every 30 days.

A further amount of Basis Shares is given to liquidity providers of the Basis Share (BAS)-DAI Uniswap v2 pair, distributing a total of 250,000 Basis Share which lasts for 1 year (365 days), and an equal amount of tokens is distributed per day.

How to earn a distribution reward?

Step1. Earn Basis Cash distribution

1. Go to the Basis Cash app page.

First, go to https://app.basis.cash. This will show you the basic market page UI.

2. Choose a Stable coin (DAI, SUSD, USDC, USDT, yCRV) Pool

Click Pool and unlock wallet by providing a connection to your Metamask browser extension. This article provides an explanation of how to use Metamask. A Metamask connection will aid your journey of farming & harvesting.

Choose a stable coin to deposit and approve your deposit. The maximum deposit for each account is 20,000 tokens per pool. Each pool will distribute 10,000 Basis Cash during 5 days to provide the system with instant liquidity. The cumulative distribution chart is as follows.

Basis Cash distribution cumulative chart

Step2. Earn Basis Share distribution

Once you have entered step 2, you have now become a potential holder of Basis Shares. Step 2 might be a little bit tricky but if you read the instructions, you’ll be able to follow very easily. The point of step 2 is ‘to provide price liquidity to Uniswap’ and receive a Basis Share as a reward.

Basis Share Pool 1

An example image of Basis Share Pool 1

First, to gain a Basis Share from scratch, users need to provide liquidity to DAI <> Basis Cash pair on Uniswap V2. The bottom of the page displays a link redirecting you to the liquidity providing page, allowing for easy participation.

After you provide liquidity through Uniswap, go back to the pool page and approve BAC_DAI-UNI-LP v2 to deposit LP tokens. The BAS pool 1 will distribute 750,000 Basis Shares, starting with 6250 Basis Shares and decreases 75% after every 30 days. The cumulative distribution chart is as follows.

Basis Share Pool 1

Basis Share Pool 2

An example image of Basis Share Pool 2

Pool 2 distributes 250,000 Basis Shares to those who provide Basis Share <> DAI Uniswap V2 pairs. As with Pool 1, the link at the bottom of the page will redirect the user to the Uniswap liquidity providing page.

Having provided liquidity through Uniswap, go back to the pool page and approve BAS_DAI-UNI-LP v2 to deposit LP tokens. The BAS pool 2 will distribute a total of 250,000 Basis Shares over the course of 1 year. The protocol distributes 684.9315 Basis Shares per day, as demonstrated by the daily chart below.

Basis Share Pool 2

Basis Cash

Basis Protocol brought back from the grave