If Kusama is the king of chaos, Basilisk is the beast of liquidity

MarmiteToast
9 min readOct 15, 2021

This write up is almost entirely to confirm my own conviction — it’s very easy to say any new chain is the “next biggest thing”, but it’s much harder to articulate why a project has the perfect combination of tech, team, and meme… ESPECIALLY one that hasn’t even launched yet. This is more of a test for myself, rather than trying to get a reputation for calling the next ‘moonshots’.

I’ve already made it quite clear that I think Kusama will become the future of multi-chain interoperability, but now I am cementing my view that Basilisk will be one of the most significant DeFi protocols in the ecosystem. My portfolio reflects this view.

Let’s start with a quick “WTF is an LBP” to get it out the way first:

  • A liquidity bootstrapping pool is a way to launch a token with relatively low capital whilst achieving optimal distribution and building liquidity. For example, an LBP for Basilisk will mean you put in KSM and get BSX back, with the weight/ratio of the pool custom modelled so that there’s constant downward pressure at the beginning, to incentivise people to spread out their buying and therefore creating significantly better distribution as it’s much harder to manipulate. Why is this better than the other launch methods for tokens? Look at the recent launch of the Strips token on Sushiswap’s MISO launchpad, which ended in 6 seconds with 16 wallets participating… sounds great right…

Now LFG

Basilisk will become the liquidity monster of Kusama by taking the core DeFi concepts of liquidity to the next level, with a tribe of sneks building a strong and passionate community around it. Token launches on Kusama won’t be through broken and inefficient IDOs, launchpads, or bullshit airdrops, but instead through custom built liquidity-bootstrapping pools that allow projects to raise funds and build liquidity in a decentralised and fair way, entering the ecosystem whilst distributing to the community instead of pleb VCs. Once tokens are launched, BSX will have liquidity pools where degens can find familiar yield farming, but backed by vested rewards and multiple incentives instead of high inflation shitcoin farm tokens, creating another sustainable and gigabrain solution for one of the most basic DeFi features. Tokens eating tokens, the snek will create liquidity through it’s pools and AMMs that feed into oracles, powering other DeFi tools and platforms like money markets that could then use Basilisk AMMs for liquidation engines… for example Angular, the JV between Basilisk and Picasso.

Ultimately the snek will cover the entire life cycle of liquidity on Kusama, from a token being born to it becoming a mature asset that can eventually find it’s way into the HydraDX omnipool. The snek offers innovative improvements to these fundamental parts of DeFi, not only because of the gigabrains building it, but also because it leverages the cross-chain and application specific power of substrate and parachains. Instead of users worrying about spending $1000s in gas to participate in a token launch, they can instead focus on making tendies once we start to see some funky parachain collabs e.g the snek tapping into liquidity from the ERC20s on Moonriver.

It was impressive to see how strong the support was for the snek, with Basilisk being the 2nd most successful crowdloan ever after maxing out it’s cap of 222,222 KSM, roughly $80m worth. In my opinion this goes to show how strong the “meme” and “tribe” factor of the snek is, considering at that point we had relatively little info on what the team were building and what sort of use cases we could have etc. Whilst it was clear the team were gigabrains and backed by the chads at Zee Prime, it was still slightly vague on what the real vision of the snek was, and yet it still received massive community support through it’s authentic shitposting. I am personally so hyped for BSX because of this — the fact that everything so far has been completely organic whilst the team have been humbly quiet as they build some of the coolest shit on Kusama.

y are LBPs that cool tho?

DeFi on Kusama is going to grow at an exponential rate — when you combine almost non-existent gas fees with secure bridges and true cross-chain interoperability between parachains, you are creating a network that can achieve liquidity like we’ve not seen anywhere else. Now when considering that Kusama is going to be the hub of the cool funky shit that can be built on substrate, it’s important that there’s a method for projects to enter the ecosystem and get those first crucial slurps of liquidity. If a team could only enter KSM with a token launch on Kucoin, then you’re severely limiting the growth potential of the network. The snek’s custom built LBPs will act as a gateway drug to the entire Kusama ecosystem. The fundraising aspect of this is not to be underestimated either — where LBPs provide a huge value proposition to smaller and less “VC backed” teams that need to raise money to actually continue to build and grow. This underpins the CORE narrative of Kusama being a community driven and decentralised network — an LBP allows a team to raise funds whilst distributing that supply back to the community that supports it — the holy grail of a true decentralised and user driven network.

To put it simply, the snek will allow substrate tokens to launch on Kusama with fair and efficient distribution. All the parachains so far have launched their tokens through CEX’s — bro we are web3 now, do I even need to explain why this is not the preferred route in the longer term? The snek will bring an essential and necessary tool that allows teams to distribute their token in a way that prevents whales pumping and dumping, and also in way that allows them to raise funds and achieve initial liquidity. LBP’s are objectively the best and most decentralised way for a token to launch — yeah sure a project with big backers like Karura and Shiden can launch on Kucoin and Kraken etc, but this is likely not even going to be an option for some of the smaller and newer teams that come to Kusama.

I am far from an expert on the tech, but I can at least understand the value it offers, especially in the context of a network like Kusama. For comparisons of what exists currently in crypto, look at Balancer LBPs, Sushi IDOs, or Copper fair auction launch.

Farming and stuff

One of the issues with yield farming is making it degen enough to attract the liquidity and therefore kickstarting the flywheel of more liquidity > less slippage > more traders > betters returns and so on, but whilst still preventing whales dumping or turning the token into a high inflation shitcoin. Basilisk will implement vested farming rewards, incentivising farmers to stay long term and therefore increasing stable growth of the protocol liquidity whilst dis-incentivising whales coming in to slurp up all the APY to then dump their rewards and leave. These things might seem trivial, but ultimately the gigabrain team have spent years learning and playing with the evolution of DeFi in order to understand what mechanics are needed to truly create something that can last years and not months. This point alone would hold value regardless of what network it’s on, but the fact that Basilisk will be one of the first parachains on Kusama means that it has the opportunity to start with a blank canvas, setting the bar extremely high and incentivising loyalty from the beginning.

They will also actively manage the specific LP reward distribution, meaning that they can optimise every pool to ensure that the yield rewards are getting the most liquidity gained in return. On top of this, they will also have multiple incentives for teams that want to add additional rewards. All of these factors combine to reinforce a delicate balance of economic incentives with sustainable growth.

Basilisk and Hydra… and snek charmers

A yuge value driver for HydraDX and Basilisk is that each chain on Polkadot and Kusama will have their own unique and independent use case, that will eventually be bridged to form a multi-headed beast that oversees the entire life cycle of DeFi across Dotsama. Some teams decide to just do “forks” of their parachains on KSM and DOT, whereas the Basilisk team are very clear that they will be optimising each protocol to the specific strengths of the network. The concept of the HydraDX omnipool is something that deserves it’s entire own article, but ultimately in order for it to exist it needs Basilisk to provide the runway for longtail assets to enter and grow in the ecosystem. Basilisk is perfectly aligned with the young and fast “break shit” attitude of Kusama, bringing new and illiquid assets into the ecosystem so they can eventually work towards being accepted into the VIP club on Hydra. HydraDX’s omnipool is the end game for AMMs and mature asset swaps, turning the meme of protocol owned liquidity into a genuine behemoth that powers crosschain trading with ‘no’ slippage, the dream of all DeFi traders.

A team can have the best tech in the world, but without it’s own passionate and vocal community it becomes just another shell propped up by VCs chasing for that next moonshot. I look at all these glossy new layer 1’s and DeFi protocols that manage to achieve huge growth in TVL, but I just can’t avoid being cynical in thinking the majority will be forgotten about when the next new shiny thing comes along. To find something that has the authenticity and originality to genuinely have longevity in crypto is perhaps the single hardest factor to find. When I first looked at the snek I was excited before I even knew what it was about. Maybe it was the hypnotic looking snake eye logo, or the shitposts from the official twitter account, but something just felt so right about it. I was drawn in, and even now I might talk about some quantifiable stats and techy shit, but ultimately the reason Basilisk will succeed is because of the community it will cultivate. The snek’s attitude is almost perfectly aligned with the ethos of Kusama, and as it actually launches and starts to flex it’s muscles I have no doubts that the tribe will start to gain momentum and gather devoted snek charmers that want to see it succeed. The community always plays the biggest role, and the Basilisk snek charmers will be very important for things like attracting new teams to come and use the LBPs to launch their tokens. It’s hard to imagine at this point considering how early things are, but when you combine the next gen tech of BSX with the degeneracy of the snek charmers, I picture an unstoppable tribe that should not be underestimated.

The HDX team has already shown that decentralisation isn’t just a buzzword and that it’s something they’re genuinely pushing for. The recent governance proposal for the tripling of HDX supply is an example of them putting their money where their mouth is, whereby the power of the community vote would be increased significantly. Decentralisation is one of the key parts of Dotsama, and especially for DeFi protocols it’s hard to imagine a project lasting for the next years without truly becoming decentralised. It’s still early days so I will try to avoid giving too much speculation on how and what the team will do exactly, but I think they’ve already made the intentions clear and I look forward to following the updates.

There’s plenty more I haven’t included on the NFT side of things, but at the end of the day I am already putting a lot of my own view and opinion into this so I will at least leave it there. There’s also a lot I am looking forward to on the UI side which I know they’re smashing, but again I have not seen enough to really comment so I will try and be a patient snek and leave it to my imagination for now. I will end it on a final degen note — Basilisk has a total supply of 100 billion, which means that even a FDV of $500m would be a token price of $0.005…. retail are gonna love being able to be a BSX millionaire right… right?

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