Read on Twitter
1. $Based AlphaLeakz and explainer, maybe/hopefully/who the fuck knows, a thread.....
2. I've become obsessed with this Based thing, as a side hustle, we have no material money at stake in it I just really like the ride and since I assume i can just get robbed at any second its just for fun. Here's my theory on current market dynamics and how it plays out
3. Pool0 was fairly simple deposit Curve.fiDAI/USDC/USDT/sUSD into the pool get based not a ton of rocket science behind it, there was a cap on amount but people could spin up from mutliple wallets so idk the purpose of the cap if nothing but to drive up gas costs.
4. Pool1 is where it got and is interesting. In this you provide liquidity to the susd/based liquidity pool on uniswap then stake those tokens and get based. So you have a weird trade here now
5. Assume you're contributing no more capital to this trade youre basically selling half your based you had to stake the uniswap pool plus half of what you earn to contribute more to the pool since its half cash / half coin. Plus inflation is brutal so sell pressure is high
6. Remember though adding more liquidity to the pool puts you at risk if the market goes up as you'll bleed based and have already sold half, this will be important later.
7. So the flow right now and forseeable future is the above Based-> sold -> more pooling -> more farming, but as some point yields slow and rebase looms, "Rebases will not be available until 97% of the total token supply is claimed. This period of time is a minimum of two weeks"
8. Now you, a based farmer, are half based half cash or some combo now in the pool and youre harvesting less based, but you want to move back all into based for the rebase event, this means you pull liquidity off pool and lift offers, THIS right here is the event that matters
9. You basically get a huge reversal as people dual hit this thing, liquidity gets worse at the same time price rises as people get positioned for the rebased, its structurally setup to let price fly maximum as everyone trips over themselves out the exit into worse liquidity
10. The key though is going to be when and who jumps first, its definitely a game of chicken but lord knows if i know.
