SEC blocks for two years then resurrects: Algorithmic stablecoin Basis issues in DeFi, kicks off five-day liquidity mining.

After raising as much as $130 million in ICO funding, being classified as a security by the U.S. Securities and Exchange Commission (SEC), and the founder announcing a refund of funds andshutting downthe project, the algorithmic stablecoin project "Basis" has come back to life in a new form. An anonymous team of five developers has relaunched this once high-profile algorithmic stablecoin in the DeFi space through open-source code.

Renamed as Basis Cash (BAC)

Unlike mainstream USD stablecoins in the crypto market, BAC does not have an equivalent USD reserve behind it. Instead, it uses an algorithm and two other tokens in the system to peg BAC close to 1 USD. The system consists of three tokens:

• Basis Cash (BAC): A USD stablecoin designed to maintain its value at 1 USD
• Basis Bonds (BAB): Issued when BAC is below 1 USD, similar to bonds, sold at a discount to BAC and redeemed at 1 USD when BAC stabilizes, with no expiration date
• Basis Shares (BAS): Holders receive seigniorage from the system

When BAC is less than 1 USD, users can exchange it for BAB at the BAB/BAC exchange rate; when BAC is greater than 1 USD, users can exchange discounted BAB back for BAC, effectively redeeming the bond at a premium forever. If BAC is higher than 1 USD after redemption, the protocol will mint "BAC circulation * premium" amount of BAC into the fund pool and distribute it proportionally to BAS holders within 24 hours.

BAC Liquidity Mining

According to theannouncement, the team has initiated a 5-day liquidity mining for BAS, allowing users to participate with stablecoins such as DAI, SUSD, USDC, USDT, yCRV, with a maximum limit of 20,000 tokens per single currency. The total reward is 50,000 BAC tokens, distributed daily with 10,000 tokens.

BAS Liquidity Mining

BAS is divided into Pool 1 (BAC-DAI-LP) and Pool 2 (BAS-DAI-LP), where Pool 1 will issue 750,000 BAS tokens over a year, with an initial daily reward of 6,250 BAS, decreasing by 75% every 30 days thereafter.

Pool 2 will issue 250,000 BAS tokens over a year, with an estimated daily issuance of 684.9315 BAS tokens.

FOMO Sentiment Intensifies

In fact, this type of stablecoin algorithm pegged to central bank monetary policies is not a first, with the closest to BAS being Empty Set Dollar (ESD), currently ranked 2375, and the previously popular and elastic supply mechanism-equipped Ampleforth (AMPL).

Rick Sanchez, the anonymous figure behind BAS, emphasized the differences between BAS and AMPL in aninterview in August this year, stating:

In reality, AMPL does not have a real monetary policy. Whenever the money supply changes, it does not have an external mechanism to dampen fluctuations in demand, but simply changes the total supply.

Driven by mining rewards, DeFi players seem to be ignited by FOMO sentiment once again with Basis Cash. As of the deadline, BAC price surged above 1,000 USD, and BAS reached an outrageous price of 416.

The project leader has also stated that BAS is like a new experiment in cryptocurrency. Rather than focusing on marketing, he is more concerned about the academic achievements BAS can reach, so investors need to be cautious and aware of the risks.