Explore the new Ponzi project: Analysis of the core mechanism of BaselineMarkets

Author: Chen Mo, founder of BV DAO Source: X, @cmdefi

There are so many new Ponzi projects that have appeared recently. Let me summarize some of the BaselineMarkets $YES that were particularly popular yesterday.

1. The non-liquidation loan module is the engine of the bulldozer, which was initially ignored by most people (including me). There is no liquidation, and the mortgaged YES will be directly destroyed without repayment upon maturity, and YES will be deflated.

2. The participation of OHM core members is definitely a plus, and it basically offsets debuffs such as the project’s predecessor being hacked.

3. The loaned ETH comes from reserves, which is essentially the pool support of YES. If revolving lending is used to continuously buy YES, this is actually what the protocol hopes for. For users, this is the maximum leverage without liquidation. It can be said that a win-win situation is achieved at this level, and the risk aspect is corresponding. The more ETH that is lent out, the less support YES will have at the previous Floor price. But from an overall perspective, if most of the borrowings are used to purchase YES, it will push the price of YES to rise, and at the same time, ETH will enter the pool, and the floor price will continue to rise, forming a positive flywheel.

4. Basically it continues OHM’s (3,3) game. If everyone uses leverage to buy and hold, it is equivalent to (9,9), which will form a perpetual motion machine. Note that a key point here is that there is no liquidation in this lending design, which means that even if someone leaves the market and the price drops, the market will not be passively smashed because the leverage is liquidated. That is to say, even if the price drops, you can still continue to hold it as long as the loan period has not expired. Theoretically, as long as you don't want to sell it, you can treat it as spot goods. Although it is said that the loan has a time limit, it seems that it can be extended in the official documents. I don’t know whether this can be supported now. The core risk of this gameplay (apart from contract risk) is actually the same as in the early days of OHM, which is the collective profit selling of large investors, that is, (-3,-3).

I wrote it in a hurry, and I welcome corrections if there are any laxities.