Baguette Lite Paper
Reflecting on the Avalanche AMM/DEX ecosystem
Several AMMs (Automated Market Makers) running on the Avalanche network already exist but they are not always easy to use for everyone. The risk of Impermanent Loss (IL) is real for anyone who provides liquidity in order to farm on such platforms.
The Avalanche ecosystem lacks a platform that provides both farming for people already familiar with the process and staking options for others who are searching for a way to earn yield on their existing cryptocurrency portfolio.
How Baguette addresses this issue
Baguette will not be yet another AMM but aims at providing a platform that offers various ways of earning returns, including through staking without the risk of being exposed to Impermanent Loss.
The goal of Baguette is to bring solutions that can be found on other platforms like the Binance Smart Chain, such as staking pools but running on the most decentralized network, Avalanche.
Introducing $BAG, the Baguette token
No one can deny most DEX/AMM projects are subject to high inflation. The goal of Baguette with $BAG is to reward users while keeping inflation under control and avoid sharp depreciation of the token price.
$BAG characteristics
● Maximum supply of 250M tokens
● Controlled monthly release of the tokens through “baguette batches”.
Each month, the number of tokens to be allocated for the rewards will be first decided by the team based on current parameters, then through a governance mechanism to be implemented later on.
● 85% of the tokens will be released to Baguette users in the form of rewards through farming and staking
● 5% of the tokens will be stored by the team to fund the project and cover development and maintenance costs, pay for listing of the $BAG token on other exchanges, and fund marketing campaigns. At the end of each batch (i.e. at the end of every month), a small percentage of the dev fund will be sold on the market to cover for Baguette operational costs. The sold amount and associated expense will be disclosed to the community for the sake of transparency.
● Roughly 10% of all tokens are reserved for the initial airdrop targeting validators and delegators staking on the Avalanche network. 2500 $BAG will be issued to each of the eligible Avalanche addresses, regardless of the amount staked by the validator or delegator.
The airdrop
Through this airdrop mechanism, we aim at rewarding those who actively participate and contribute to the Avalanche network. For the first time, an airdrop will target all the validators and delegators staking on the Avalanche network. The fixed amount of 2500 $BAG for each eligible address is tailored to avoid favoring the biggest holders and treat everyone participating in the network fairly.
The amount of remaining unclaimed $BAG tokens from the airdrop will be entirely burned after the claiming deadline that will occur on May 31st, 2021. The amount of tokens burned for this occasion will be announced at the end of the first batch. 10% of BAG total supply was reserved to accomodate for our estimation of 10K airdropees, since the snapshot taken on April 25th led to a final count of roughly 7k addresses therefore at least 7M $BAG will be burned.
Staking and farming on Baguette
For the first batch, 2.5M tokens, representing 1% of the total supply will be allocated to staking and farming rewards. Baguette brings to the table the possibility for its users to choose to simply stake AVAX or BAG without the need to provide liquidity to pools and receive BAG tokens without exposing their investments to volatility through impermanent loss.
Simple staking
● AVAX: 100K BAG rewards
● BAG: 400K BAG rewards
Liquidity pools (2M BAG total rewards)
● AVAX/BTC: 117647 BAG
● AVAX/ETH: 117647 BAG
● AVAX/LINK: 117647 BAG
● AVAX/USDT: 117647 BAG
● AVAX/DAI: 117647 BAG
● BAG/AVAX: 235294 BAG
● BAG/BTC: 235294 BAG
● BAG/ETH: 235294 BAG
● BAG/LINK: 235294 BAG
● BAG/USDT: 235294 BAG
● BAG/DAI: 235294 BAG
2.5M BAG tokens will be effectively distributed during the first month of existence of Baguette to the users of the Baguette platform. At the end of the first month, the second batch of rewards will be decided and announced by the team.
Our ultimate goal is to have a controlled inflation, meaning that rewards should decrease over time to allow a healthy growth of the BAG token and reward BAG holders and the community through token price appreciation.