@unbanksy @ind-igo @hohmward are working on something interesting at @baselinemarkets – specifically rebalancing LPs for better price discovery, floor management – basically something a private MM would do for your big token.

however, i do have some questions:
1. rebalancing LPs -> loosing money due to IL, and IL in concentrated positions is crazy – how is that accounted? wouldn't you need extra supply of both assets on each side for rebalancing when the price goes steadily up or down? if so, where those come from? who "eats" the loss?
2. how "far" this rebalance can be supported?
3. do you hedge IL anyhow?
4. are there any simulations publicly available?
5. i know uniswap is the center of liquidity distribution, but wouldn't a CSMM dex be more suitable for such?

i might be missing something as i obviously haven't read the docs fully – too much to read

Product & GTM for interesting mechanism designs. Core team @baselinemarkets

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

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:

Hey just got around to answering these, had a busy week. Thank you so much for the shoutout.

https://warpcast.com/ind-igo/0x4e72c28b

Happy to answer any other questions!