YES is the first "ERC420" utilizing Baseline's automated tokenomics engine.
Using a dynamic supply model and a basic market making strategy, Baseline provides the YES token with constant on-chain liquidity and non-liquidating leverage right out of the box.
When the YES token is deployed, it automatically directs initial liquidity to the Uniswap V3 pool (LP-NFT). At launch, 100% of the token's volume is on-chain thanks to the protocol and used to protect its value forever.
Baseline guarantees the internal "base value" of a YES token (BLV) by reserving enough liquidity in the pool to buy back their entire supply. Simply put, the BLV is the price at which the last token can be sold into the pool.
This is possible because the protocol owns the initial offering; teams canэt pre-issue tokens to themselves or investors. Instead, each newly issued YES token must be purchased directly from the pool, allowing the protocol to accumulate liquidity.
This liquidity is then used in Baseline's permissionless trading system and in its own credit line to increase the BLV of the YES token over time. Both approaches are implemented in such a way that the BLV never decreases, resulting in a price that can only increase over time.
Baseline's market making strategy naturally increases the value of the underlying BLV token over time through a series of liquidity transactions. Every time the token price exceeds a certain threshold, anyone can permissionlessly rebalance the liquidity owned by the protocol among the three Uniswap V3 positions. This reduces potential information asymmetries arising from liquidity rebalancing and helps maintain a fair, predictable and transparent market.
