Farcaster

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: