🟡Base fee LMA Token

Central to the concept of Modular Synthetic Blockspace, which streamlines the process of gas hedging, is the creation of a synthetic asset—the BaseFee token. This token provides a strategic tool to mitigate the impact of gas price fluctuations, offering more flexible and real-time management of gas fees.

Users can mint BaseFee tokens through a Collateralized Debt Position (CDP) mechanism, inspired by Liquity’s CDP design. This design incorporates features that facilitate arbitrage and leverages an Automated Market Maker (AMM) with dynamic fees to attract liquidity. The CDP structure encourages market alignment with actual gas prices by enabling participants to capitalize on arbitrage opportunities themselves, removing the need for an external validator. This enhances the market’s efficiency and responsiveness to price changes.

BaseFee Token Explained

In the Gas Bet Protocol, the BaseFee token is a derivative created through the Collateralized Debt Position (CDP) model. Its value is based on the on-chain logarithmic moving average of gas prices, which is updated every 50 blocks via our reliable oracle. This mechanism ensures that the BaseFee derivative market offers numerous trading opportunities for both hedging and speculation, while helping to manage volatility and reduce the risk of manipulation attacks.

Once minted, BaseFee holders can utilize it in various ways:

• Speculate on fluctuations in gas prices.

• Hedge against volatile gas price changes.

• Stake it to earn rewards as a Stability Pool depositor.

Symbol: BaseFee Blockchain: L2 TBA