Before we get started, this is not a recommendation or endorsement to buy any token(s) mentioned.
Coinbase’s new flagship Layer 2 called Base is set to open to all users starting today on August 9th. Since bridging opened on August 3rd, developers and degens have plowed $43M into Base according to DeFiLlama, as many DeFi protocols are expected to launch soon. Among the few DeFi protocols to already launch, there is a native DEX that is a fork of Arbidex–called BaseSwap. BaseSwap has swallowed up nearly 50% of the TVL on Base in just its first week with ~$20M TVL.
BaseSwap has a simple and familiar AMM design with the following features:
- Swap (for traders)
- Liquidity (for LPs)
- Farm (for LP farmers)
- Earn (for BSWAP stakers)
The swap for traders and LP deposit look like the app design of every other fork of Uniswap-style AMM, The Farm tab boasts some relatively higher yields such as 102% APR on just the stablecoin pair for USD+/USDC. These yields are largely backed by BSWAP rewards while the AMM has been live for only a week (see below).
A more interesting design choice can be found in the BSWAP staking tab under Earn, which rewards BSWAP stakers for their loyalty. The longer the locking period, the higher the rewards, and BSWAP stakers can choose to get paid in either USDC or ETH. Users have the flexibility to stake without locking or to lock their tokens for 7, 30, or 90 days to earn increased rewards.
BaseSwap has its own governance token called BSWAP, which is trading on BaseSwap. According to their documentation, BSWAP launched with an initial supply of 455,000, an implied price of $1, and a max supply of 10,000,000. 85.45% of the total supply of BSWAP is currently allocated to be rewarded to BaseSwap LPs but it remains to be seen if these projected allocations will hold up as the BSWAP token gets distributed for governance. As of this writing, BSWAP is trading at just under $5.77, with an implied FDV = $57M.
There appears to be no published audits of BaseSwap’s smart contracts. However, they did share a an audit of Arbidex in their Discord. This does not provide much reassurance for new users who are seeking to mitigate the risk of being exposed to a smart contract exploit.
Adding another layer to the story of their launch, BaseSwap mentions in a tweet the upcoming launch of BaseX, a concentrated liquidity AMM built by BaseSwap “to provide higher efficiency and a more flexible liquidity and farming experience.” In this tweet thread, BaseSwap mentions a dual token model for BaseX with BSX and xBSX (Escrowed BSX Token) to incentivize long term holders and discourage mercenary farming. BaseSwap mentions BaseX will support liquidity in custom ranges or pre-defined ones, but little else is known at this time other than the airdrop details below for those holding/LPing/farming/staking BSWAP and participating as traders or LPs on BaseSwap.
Today, I’ll show how I can earn up to ~102% APR as a USD+/USDC LP on BaseSwap, with a projected future BSX airdrop once BaseX launches. Please note, it’s likely this APR will continue trending down as more liquidity deposits but I’m optimistic it will hold a relatively higher yield rate given the amount of trading activity vs the limited liquidity on Base.
How to Earn Up to 102% APR with…
DeFi Dad is one of the earliest power users of DeFi, having worked with early Ethereum startups going back to 2018, including Zapper.
