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indigo (b/acc)

@ind-igo

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177 Followers


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A user asked some great questions about @baselinemarkets and wanted to take the time to answer publicly. I think Baseline is one of the coolest systems being built in crypto, but I don't think many understand wtf we're doing. So I'll start with a bit of context. The concept of IL is a bit incomplete on its own. You have to look at it as "inventory risk", how much risk are you taking on for holding this position vs holding spot. Further, it is a very profit-seeking human way of looking at LPing. In context of the BMM, is not only a market maker, it is also the issuer and originator of the asset. It is *completely fine* holding the token forever, therefore, 0 inventory risk. Its a smart contract, with its sole job to ensure the health of the market, via providing liquidity in the pool, lending, and supporting price. so to answer the questions:
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Lets talk about BIG ROLLUP One thing I haven't heard anyone mention with L1 blob fee debate is the fee share given to BIG ROLLUP, ie OP superchain, zksync elastic chain, arb orbit etc Superchain is the largest, and has made 7.4k eth last year => ~$24.4M, and ~$49.9M over its lifetime Whats interesting is BIG ROLLUP gets top-line fees (ie straight from gas costs on the L2), vs ETH L1 getting bottom-line fees from blob price There's a dilemma for L1: increase blob fees and risk losing rollups (especially smaller ones) to other DA solutions. Reduce blob fees further and lose value accrual to the token If rollups need blob scaling and reduced fees, bribing ETH holders with some of this revenue would do well for their cause Direct a portion of BIG ROLLUP revs to either a burn, or better yet, borrow USD and do massive TWAPs ala saylor The fact is that L2 fees *are* extracting more than they are giving back currently, but they have the power to turn this around wyt
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