What is Basis Gold (BAG) | What is Basis Gold token | What is BAG token
Basis Gold Protocol embraces an innovative mechanism which completely relys on the market, executed by algorithm on smart contracts transparently. Money supply is totally determined by the demand, hence, the entire design ensures that users are willing to hold without worrying about hyperinflation while maintaining the purchasing power at the same time.
Basis Gold is a non-custodial algorithm stable coin powered by Huobi Eco Chain. Different from other DeFi projects, Basis Gold protocol consists of 3 tokens — Basis Gold (BAG), Basis Gold Share (BAGS) and Basis Gold Bond (BAGB). Basis Gold and Basis Gold Share can be farmable by depositing certain assets. In this system, Basis Gold is the stable coin considered to be valued at $1 while Basis Gold Share holders share the inflationary money supply of Basis Gold. In order to receive newly minted Basis Gold, Basis Gold Share holders have to stake in Boardroom. Basis Gold Bond may be purchased at a certain discount to maintain the stability of Basis Gold price with the assumption of future profits upon redemption.
How does the Basis Gold mechanism work?
Expansion — When Basis Gold trades beyond $1
If the price of Basis Gold exceeds $1, bond redemptions will be triggered. If the price of Basis Gold is still traded above $1 even after bonds are redeemed, new Basis Gold will be minted resulting from the increasig demand and will be fairly distributed to Basis Gold Share holders.
For instance, the price of Basis Gold continue to be traded above $1 even after bond redemption. At this point, the contract mints new Basis Gold into existence. This newly minted token is given to the Boardroom, where users can stake Basis Gold Share and earn daily Basis Gold based on the price of Basis Gold.
Contraction — When Basis Gold trades below $1
If the price of Basis Gold is below $1, Basis Gold Bond can be purchased at a certain discount to maintain the stability of Basis Gold price with the expectation of future profits upon redemption.
Each bond guarantees the holder exactly 1 Basis Gold at some point in the future under certain circumstances. Whenever a Basis Gold Bond is redeemed for a Basis Gold, it is burned, causing a decrease in the circulating Basis Gold supply. Bond do not have interest payouts, nor do they have maturity or expiration dates. Rather, they can be redeemed on a 1:1 ratio with Basis Gold when the price is traded above $1.
Purchased bond can be redeemed on a 1:1 ratio with Basis Gold only when the oracle price of Basis Gold is above $1. This prevents bond holders from cutting their losses on redemptions and creating unnecessary increases in supply.
Token Distribution
Basis Gold Distribution
HT, HUSD and HBTC will be accepted as initial deposited assets without impermanent loss, the distribution of Basis Gold prioritizes those who deposit to contract. A total of 15,000 Basis Gold tokens are rewarded to depositors, with 3,000 tokens distributed per day. An equal amount of tokens is assigned to each pool.
Basis Gold Share Distribution
A total of 1M of Basis Gold Share will be distributed right after Basis Gold start distribution to the liquidity providers who deposit BAGS-HUSD，BAGS -HBTC， BAG-HUSD，BAG -HBTC LP tokens. 7.5% of the distribution will be kept by team for the further development of the protocol!
To be more specific:
250,000 BAGS will be equally allocated to users who deposit asset to BAGS-HUSD，BAGS -HBTC LP pools which means each pool shares 125,000 BAGs. Users are able to receive 347.222 per day for 1 year.
While 750,000 BAGS will be equally distributed to users who provide liquidity to BAG-HUSD，BAG -HBTC LP pools with 3,080 daily BAGS distribution in the first 30 days, the distribution will be decreased every 30 days by 25% since then, meaning that the inflationary distribution will decrease from 3,080 to 2,310 till Febrary 2021.
Among the distribution, 7.5% will be used for the improvement and upgrades of Basis Gold protocol as well as the marketing and operation!
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