# Crypto Is Rigged Against Founders (https://www.baseline.markets/blog/crypto-is-rigged-against-founders)
Date: 2026-03-11
Author: Unbanksy
85% of tokens launched in 2025 ended negative. Today's token launches introduce hidden costs that make it nearly impossible to recover from. People will tell you this is how crypto always was and always will be. It doesn't have to be.
To get a token live and tradeable, projects must choose between centralized exchanges, professional market makers, or onchain liquidity. Each one comes with its own hidden costs that all produce the same result: sell pressure at launch.
Arrakis reviewed 125 token launches and confirmed this. 85% of tokens launched in 2025 ended negative, and only 9% of tokens that dropped in week one ever recovered. The damage happens before the token even hits the trading chart.
## Centralized exchanges: the cost of distribution
Getting listed on a major exchange costs tokens. Projects report giving up 10% of total supply for a Tier 1 listing, plus months of due diligence that burns runway while you wait. Binance alone has teams stalled for months before they see a listing.
Founders convince themselves the distribution is worth the cost until they realize the exchange listing is the event that triggers the sell pressure: airdrop recipients dump and the listing you paid for in tokens becomes the venue of price destruction.
## Market makers: the cost of manipulation
Once listed, tokens need liquidity. Market makers offer a standard deal: loan us your tokens at a set price, and we provide liquidity. If we don't deliver, we return the tokens at a higher price after a year. Sounds reasonable but in reality: the MM may dump your loaned tokens, break service-level agreements, and trade against you at the cost of your chart and your community's trust.
For instance, CoinDesk investigated [@movement\_xyz](https://x.com/movement_xyz) MOVE token and found that [@Web3Port\_Labs](https://x.com/Web3Port_Labs) dumped 66M tokens one day after the Binance listing. Movement's own general counsel had called the deal "possibly the worst agreement I have ever seen". Binance banned the market maker, Coinbase delisted the token and the co-founder was suspended.
The deal is designed for the MM to win and for projects to lose. Some founders know what they're signing. Others get misled. Either way, the cost is the same.
## Onchain liquidity: the cost of renting
Some projects skip the middlemen and go onchain:
* Deploy a passive Uniswap V2 pool and hope for the best
* Try to manage concentrated V3 positions manually
* Bribe LPs through emissions programs paying with your own tokens
Going onchain removes the counterparty, but not the cost. Founders still need to understand how tokenomics impact their liquidity, manage pool positions as supply changes, and spend their own token supply to attract third-party LPs who leave when incentives dry up.
For instance, when \$SYND launched on [@AerodromeFi](https://x.com/AerodromeFi), the project allocated 1% of supply to bribe voters. The data shows that the majority of those wallets sold them immediately upon launch, translating to 1,729 ETH (\~\$7.78M) in sell pressure in the first week alone. Even worse, the liquidity churned when incentives ended, making the entire program a temporary benefit with a permanent cost.
Every path leads to the same place: the token gets dumped, insiders get paid, and buyers get rekt.
## Token Owned Liquidity
Baseline built an AMM where tokens own their liquidity. The design inverts every cost described above:
* **No unnecessary sell pressure:** the token's own supply bootstraps the liquidity, no bribes or loans to third parties who dump it
* **Permanent liquidity:** value stays in the pool and compounds from trading activity, instead of leaving when incentives rotate
* **Asset, not a liability:** trading fees and reserves accrue back to the token's balance sheet, not to external counterparties
To demonstrate what's possible, we simulated an existing onchain liquidity strategy against a Baseline pool. The results were impressive:
* **Price:** +59.6% higher from identical trade flow
* **Liquidity growth:** +267.7% more liquidity to sell into
* **Supply control:** +200.5% more tokens pulled out of circulation
* **Fees:** +81.1% more collected in trading fees without impacting tradeability
If you're interested in learning more about Baseline, check out our [docs](https://www.baseline.markets/docs).
If you're launching a token or running one that's costing you, we can simulate your trade data and show you the difference. DM [@basedbooo](https://x.com/basedbooo) or join our [Discord](https://discord.gg/baseline).
---
# Defeating the Death Spiral (https://www.baseline.markets/blog/defeating-the-death-spiral)
Date: 2025-10-22
Author: indigo
Death spirals. Bank runs. Negative reflexivity.
Similar concepts, different contexts. When confidence erodes and everyone rushes for the exit, escaping with whatever value they can get.
It represents the looming fate of tokens issued onchain. A gravitational pull to 0. More often than not, a token's destiny is already set the second it's deployed.
From 2020 to the present, onchain tokens have suffered from the same problems. Poor tokenomics combined with snipers and short-term extractors. A team member, investors or snipers dumping, wiping out all the positive momentum and leaving the rest to hold the bag. It's never been easy here.
It's one of the greatest fears for builders. Endlessly working and sweating for months to years, tokenomics becomes an afterthought. But the looming threat is always there: A token's price is its narrative. It will dictate the life and death of the project. A misstep in token allocations or misconfigured liquidity, and zero is inevitable.
The problem stems from the dynamics of the AMMs we have become accustomed to. Beautiful and elegant, but fundamentally flawed. A key problem is the simplistic pricing system of these pools, requiring constant maintenance to respond to market dynamics.
However, the more insidious issue lies not in the code, but in the nature of its liquidity. To understand the death spiral, we must look at the people who provide it.
## Liquidity For Hire
Although the AMM is autonomous, the liquidity provider (LP) for these AMMs is, more often than not, a human, and LPing is risky business. And thus, as a rational profit-seeking entity, whether an incentivized LP or a private market maker, the one providing the service of LPing must be compensated for taking that risk.
There's a reason these LPs are often called "mercenary liquidity". As soon as the flow of incentives stops, or it's unprofitable to hold the token, there's no reason for the LP to stay.
They're not evil. They're not trying to fuck anyone over. They're just human.
Liquidity is the lifeblood of markets. Without it, a market's structure is fragile and prone to collapse. What's needed to solve these problems is a different type of liquidity provider.
## History doesn't repeat, but it does rhyme
Stepping back, its good practice to look to TradFi for its many generations of learnings. Banking in the 19th and 20th centuries was going through similar problems of illiquidity. There were numerous examples of financial institutions collapsing, bank runs being a frequent occurrence.
Back then, the realization was that banks go through regular periods of illiquidity. If they could get an injection of capital when they needed it the most, they could survive the temporary downturn and bounce back.
The solution was the concept of a Central Bank. An entity with the objective of ensuring liquidity in the many banks it oversees. One that all banks can trust to protect them, with the purpose of providing the support it needs to thrive during good times, and survive during the bad.
The most interesting part of this solution though, is that the mere presence of such a backstop is often enough to prevent this negative reflexivity from starting in the first place.
A very powerful concept. What if we could do better?
What if it was possible to create a smart contract to serve the same purpose as a Central Bank, to provide that same kind of confidence for a token?
This would be a tool to fight the death spiral. An anti-reflexive engine.
## A New Type Of LP
This is Baseline's ultimate directive: to support a token through shifting market conditions, at every phase of its lifecycle. Like a financial battery, it gathers value during good times, and releases it back during the bad.
As an autonomous liquidity provider, Baseline efficiently supplies its Protocol-Owned Liquidity across top-of-book bids and asks, while preserving an ever-growing floor price to be the ultimate backstop for holders, providing support where and when it's needed most.
**A Central Bank for your token.**
From this core mechanism, we created a pricing system superior to the standard CPMM and a lending system free from brutal liquidations. We distribute the value these generate, establishing a native yield source for each token. These primitives combine to enable resilient onchain economies that can survive and thrive.
## Conclusion
We're a team of builders who have felt the pain of onchain trading for too long. We've been working on solving these issues for years. And we believe the problem isn't the builders or traders, but the fragile systems they're forced to use.
So we built a better one.
Baseline is our answer to the constant threat of zero. A stronger foundation for the next generation of onchain economies, where great projects have the support they need to achieve their full potential.
Come check us out at [baseline.markets](https://www.baseline.markets/) or talk with us on [Discord](https://discord.gg/baseline). Learn more in our [docs](https://www.baseline.markets/docs).
---
# New Curve, New Era (https://www.baseline.markets/blog/new-curve-new-era)
Date: 2026-03-23
Author: FullyAllocated
Throughout the years, despite the many mechanisms conceived to "fix tokenomics", nothing has stuck as a permanent solution. Heaven, Believe, Boop, Bonk, and the slew of launchpads that came before them (and after) all focus on modifying the extrinsic conditions and incentives around the liquidity pool while leaving the underlying economics of the swap untouched: the constant product curve, `x*y=k`.
We're not saying the math is fundamentally broken, but once you dive into the details of what the equation is trying to do and why, the culprit becomes obvious.
***
Constant-product liquidity was designed to approximate traditional market making: harvest fees from volatility, stay balanced, treat all flow symmetrically. That works fine between two external assets like ETH/BTC. It doesn't work when the pool is deployed by a project for its own token, where the goal is capital formation and long-term value, not extracting spread.
If the objectives are different, the behavior should be too.
***
### The Tragedy of Heaven DEX
Heaven/\$LIGHT stood out to us because it was clear from their communications that they were thoughtful, well-intentioned, long-term players. The team still posts about Heaven developments in Telegram to this day. But no one checks Telegram. They look at the chart, and it tells a different story.
In their team retrospective, they correctly identified what led to their demise: improved trading tooling, sharper adversarial flow, and the curve quickly becoming "uninhabitable." But they blame external factors around the liquidity pool. It's a classic case of addressing the symptoms while ignoring the root cause. No one showed up just to ruin Heaven's party. The curve didn't decide to suddenly become uninhabitable, it was behaving exactly as intended.
### Show me the incentive, and I'll show you the outcome
There's nothing in the `x*y=k` equation that provides context for the total token supply. By definition, constant product pools have no idea how many tokens they will need to buy, and no idea what the underlying valuations of the assets in their pools actually are. The vast majority of on-chain trading is being facilitated by pools that are completely oblivious to the markets they provide liquidity for. They blindly buy and sell based on what's available in their own reserves, unaware of how those trades are impacting the broader market as a result.
To illustrate why this matters: say you are launching a token with 1M total supply. You pair 100K tokens with 50K USDC into a liquidity pool and lock the LP. Sounds good, right?
```
k = 100,000 × 50,000 = 5,000,000,000
x' = 1,000,000 tokens
y' = k / x' = 5,000 USDC
```
That \$45,000 is permanently inaccessible to anyone actually trading the token. Not locked away for later, mathematically unreachable, forever. The more it grows, the more inefficient it becomes.
At the extreme, these losses extend to absurd amounts.
### Remember \$SLERF?
Yeah, "oh fuck."
When the dev accidentally burned the LP, the liquidity was so thick that the unused capital today amounts to around 75,000 SOL, over \$11 million of completely wasted capital. The pool was working exactly as designed.
Heaven knew about the wasted capital problem and modified their curve to fix it. Yet they still failed, because the philosophy never changed. Liquidity was still designed to harvest volatility, not accumulate value. While the bots and snipers certainly don't help, they are just the consequence of an easily exploitable system.
Until the fundamental assumptions about the liquidity curve change, nothing will change.
***
## The Baseline Way
The premise of Baseline's liquidity curve starts with a simple question: what if we've been looking at the liquidity pool the wrong way?
Whether the pool acknowledges it or not, every pool accumulates an average cost basis based on the aggregate swaps flowing through it. It builds a running profit and loss based on the total volume of units bought and sold and the average prices at which they are executed. And since the pool is the counterparty for every trade, its position is the inverse of all the traders on average. When the pool has a large unrealized gain, all traders are on average down. When the pool is sitting on a large unrealized loss, traders are on average up.
This begs the question: if the pool only makes money when traders lose, should the objective of the liquidity even be making money in the first place?
How would things look if liquidity pools were designed to lose as much money as possible over a sustained time horizon, in order to subsidize the maximum unrealized PnL possible for all holders?
While it sounds ridiculous, the critical detail is in how it loses money. If a pool loses money by setting arbitrarily high prices, the first sellers would drain all the liquidity, leaving everyone else empty handed. Instead, the pool needs to be strategically unprofitable: first making a profit from trading spreads in the short term, then channeling those profits back into upward price appreciation by buying tokens at higher and higher prices, indefinitely.
This is the driving philosophy behind Baseline's curve. We set out to build a liquidity system that is more costly to short-term traders, in order to utilize that extra capital to generate better long-term outcomes for everyone else. Better aligned incentives, more intelligent liquidity accumulation, better overall price performance. We've changed the core rules, and entirely new game theory follows from that.
### Never Going Back
Once upon a time, there lived a young frog at the bottom of a well. He'd been there his whole life, quite comfortable, looking up at a very small patch of sky. His cousin came to visit from the outside and asked why he'd never left. "The sky is so small," said the frog. "There's nothing out there for me." His cousin pleaded until he finally climbed up. At the midway point, the sky broadened. He grew fascinated and nervous. At the top, he was speechless. Trees, meadows, a beautiful pond. "I never knew how much beauty existed outside of the well."
We got into crypto because of what we knew it could be: a way to rebuild the global economy from the ground up and provide a better means for economic mobility for humanity, and the endless wealth opportunities that arise as a result. Call us naive, but we never lost the vision. We've gotten a glimpse of the world beyond, and damn is it beautiful.
After years of building, failing, and persisting, we feel like we've finally created something that can help us all see it too.
And once we leave the well, we're never going back.
---
# Decentralized to Desperate: Why Builders Have Given Up on AMMs (https://www.baseline.markets/blog/why-builders-have-given-up-on-amms)
Date: 2025-06-24
Author: Baseline Team
Automated Market Makers (AMMs) are a cornerstone of DeFi. With a few clicks, anyone can provide liquidity for a token, creating a permissionless market in a way that was never possible before. It's a simple innovation that unlocked liquidity for millions of assets, fueling the explosive growth of onchain markets.
For builders, they seem like a great solution for bootstrapping liquidity. Yet they have critical flaws that impact tokens at every stage of their lifecycle. In this article, we will briefly go over some of the issues surrounding the use of AMMs for projects, the most common alternative, and what we believe is missing.
## X\*Y=K, a Blessing and a Curse
The first and most recognized model is the Constant Product Market Maker (CPAMM), famously represented by the formula x\*y=k and first implemented by Uniswap in 2018, and gaining widespread traction around 2020.
This design's beauty is its simplicity and elegance; it is easy to understand, and it just works. However, this same simplicity is the source of significant, persistent problems.
For all their benefits, CPAMMs create a challenging environment for both liquidity providers (LPs) and traders.
For LPs, the primary issues are **Impermanent Loss (IL)** and **Loss-Versus-Rebalancing (LVR)**. Impermanent Loss is the opportunity cost LPs suffer when the price of the assets in a pool diverges—they often would have been better off just holding the tokens. LVR is a more insidious problem; it's the systematic profit extracted from LPs by arbitrageurs who are always faster and better informed, effectively bleeding value from the pool.
For traders, the main threat is **MEV (Maximal Extractable Value)**, most commonly seen in the form of "sandwich attacks." A trader's swap is targeted by a bot that places a large order right before it and an opposite order right after, artificially inflating the price the trader pays and pocketing the difference.
Most importantly, CPAMMs are highly dependent on the amount of liquidity in their pools. Pools with low liquidity are notoriously easy for whales to manipulate, causing wild price swings. The common solution is to provide high-yield liquidity rewards for LPs, but this often is an additional cost and complexity for projects. It attracts mercenary capital that provides liquidity only for the rewards and vanishes the moment they dry up, leaving projects in a worse position.
## Concentrated Liquidity
In 2021, Uniswap V3 introduced the Concentrated Liquidity AMM (CLAMM). This model allows LPs to provide liquidity within specific price ranges, promising greater capital efficiency and better control over the risk LPs take.
For high-volume pairs like ETH/USDC, CLAMMs have been a major step forward. However, they are not a silver bullet. They still suffer from LVR and MEV issues, and their increased flexibility also comes with its own challenges. Managing a CLAMM position is significantly more complex, requiring active monitoring and adjustments.
This complexity makes CLAMMs impractical for the long tail of smaller, less liquid tokens. For these assets, liquidity becomes fragmented and difficult to manage. It's no surprise that even four years after their introduction, the total value locked (TVL) in simple CPAMMs still rivals, and in many cases exceeds, that of their more complex successors.
## The Retreat Off-Chain
Frustrated with the trade-offs of onchain AMMs, many projects have turned to the traditional solution of utilizing private market makers. These solutions offer better pricing for traders but come at a steep cost, often requiring huge incentives for the MMs. This comes in the form of token loans and extremely disadvantageous option structures.
It's not that these MMs are all evil or extractive. The process of providing liquidity for new tokens is extremely risky, and MMs are profit-seeking businesses who must ensure they can make their profits. In addition, there have been many cases of market makers wrecking token performance and being caught in clearly manipulative practices. The truth is, professional MMs require a high amount of trust to act in good faith.
This leaves project founders in a difficult position. To bootstrap liquidity, a critical step for any new token, they must make a huge tradeoff:
* Risk manipulation and unsustainable incentives on a simple AMM.
* Struggle with the complexity and ineffectiveness of a CLAMM.
* Navigate the world of professional market makers before they're ready, forcing them to create potentially disadvantageous deals to secure their liquidity.
## What's Missing?
A clear gap exists in the market. The current landscape serves high-volume, blue-chip assets well, but it fails the very innovators and builders that push the crypto space forward. These projects need a way to build sustainable, efficient liquidity without becoming market makers themselves or sacrificing the benefits of decentralization.
In a space defined by innovation and experimentation, the next evolution of AMMs must be designed for this underserved segment. The liquidity problem for new and growing projects is waiting for a real solution.
[Baseline](https://x.com/BaselineMarkets) is designed from first principles around the problems outlined above. We are crypto natives, believing that onchain, programmable liquidity via AMMs can solve these issues. The first step is identifying the problem.
Stay tuned for more.
---
# Your Token Is Leaking Value (https://www.baseline.markets/blog/your-token-is-leaking-value)
Date: 2026-02-27
Author: Baseline Team
Baseline built an AMM where tokens own their liquidity and retain value over time. Using \$GAME's historical trade data as a benchmark, we simulated how a token would perform if liquidity was owned instead of rented from external LPs. The results were hard to ignore:
Better price performance, stronger reserve backing, healthier supply dynamics, and improved value capture.
## The simulation
\$GAME is an AI agent ([@GAME\_Virtuals](https://x.com/GAME_Virtuals)) built on [@virtuals\_io](https://x.com/virtuals_io) whose main liquidity pool is on Aerodrome.
We replayed \$GAME's entire trade history (over 980K trades) through a Baseline pool. Here's what we found:
* **Price:** **+59.6%** higher from identical trade flow
* **Liquidity growth:** **+267.7%** more reserves backing each circulating token
* **Supply control:** **+200.5%** more tokens pulled out of circulation
* **Backing:** **+21%** growth in guaranteed floor price
* **Fees:** **+81.1%** more collected in trading fees without impacting tradeability
## Where traditional pools fail
Traditional liquidity pools (such as Uniswap and Aerodrome) quote prices using pool inventory and without considering circulating supply. This creates a mismatch between the price and the liquidity supporting that price.
Baseline's pool ended with +59.6% higher price than the standard pool.
Traditional pools are reactive to market flows. Reserves per token thin out during expansion and rebuild too slowly during contraction, leaving weaker support behind each token.
Baseline ended with 267.7% more reserves per circulating token, meaning more liquidity backing the float.
Traditional pools can't distinguish between tokens in the pool and tokens floating in the market.
Baseline quotes based on available float, absorbing 200.5% more tokens and leaving less supply to act as future sell pressure.
Said another way, Baseline was able to **reduce floating supply by 33.5%**.
Traditional pools have no concept of a floor: the only value guaranteed is zero. Baseline channels a portion of every trade into **a guaranteed floor that grew 21%** over the simulation. When backing grows, downside compresses and the token feels safer to hold.
Traditional pools apply static fees with no consideration for market conditions. Mercury keeps spreads competitive while dynamically shifting fees based on market premium, **generating +81% more surplus**.
Note that while the simulation looks purely at pool performance, Baseline tokens offer far more in utility including trading fee capture, staking, borrowing, and leverage, all of which generate activity that flows back into the token.
## Why this matters
Your token is leaking value because the onchain liquidity pools (Uniswap, Aerodrome, etc) were never designed to retain it. When tokens own their liquidity, they stop acting like liabilities and start compounding like assets.
If you're launching a token or running an existing one that's bleeding value, we can run simulations and show you the difference. Drop into our [Discord](https://discord.gg/baseline) or check out our [docs](https://www.baseline.markets/docs).