🚨 First stress test for Baseline's V3 Market Maker 🚨

The results:
💰 $2.3M sell-off
📉 Price dropped just -15%
📉 Market cap $61M -> $51M

How did our market maker handle it? And how does this liquidity compare to a basic XY=K AMM?

Let's break it down 👇

For beginners, Baseline Market Maker (BMM) is our latest liquidity design that uses Leveraged Anchor LP.

This increases liquidity in the anchor position by borrowing reserves against supply it buys back within that range.

Here is how the liquidity looks like:

$YES is now live on @base!

0x1B68244B100A6713ca7F540697b1bE12148a8bf9

This isn’t just a re-launch - it’s a major upgrade that comes with:

💧 New liquidity design - absorbs large sells
🔒 Fixed supply - no more confusion
💰 0% borrows - no liquidation

Let’s break it down 🧵👇

New liquidity design

The new market making contract rebalances more intelligently: instead of 4 distinct actions (bump, slide, sweep, drop), the core functionality happens through a single rebalance() operation.

Additionally, the new liquidity design uses Leveraged Anchor LP.… https://t.co/LeLgsFgIzR

Baseline

Programmatic Liquidity. Builder of @yesdotmoney with 1 billion tokens coming soon

Here's a step-by-step of how BMM reacted to sell-off:

1. BMM starts off with 254 eth in liquidity depth. This means it takes that much to move price down by 2%.
2. Initial sell-off of 530 eth happens.
3. BMM absorbs $YES supply and updates liquidity depth to 370 eth.
4. Sell-off continues with 666 eth.
5. BMM absorbs supply again and updates liquidity depth to 486 eth.
6. Additional 265 eth sell-off happens but due to thick liquidity depth, price barely budges.

In total, we saw $2.3M in sell-offs, price went down by -15% and market cap from $61M to $51M.

The same sell-off in a xy=k pool (e.g. most tokens) would've moved price by -65% and reduced market cap from $61M down to $21M.

Dumps suck, but w/o BMM, $YES would've been rekt.

If you're interested in learning more about what we're working on, and how we're changing token fundamentals, join our Discord:

If you're interested in learning more about what we're working on, and how we're changing token fundamentals, join our Discord:

https://discord.com/invite/baseline

For beginners, Baseline Market Maker (BMM) is our latest liquidity design that uses Leveraged Anchor LP.

This increases liquidity in the anchor position by borrowing reserves against supply it buys back within that range.

Here is how the liquidity looks like:

https://x.com/BaselineMarkets/status/1896956500536705533

New economic hyperstructures and city states
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Current: 👹
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Ex. Product @SetProtocol, @indexcoop, @goldfinch
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Ex. VC @drapervc

@puniaviision they back 

Also, @monteluna @aeto