❓FAQ

Frequently Asked Questions!

We will be populating our FAQ page as we build-out and launch new products, if you have questions, please reach-out to the team on team on X, Telegram and Discord.

Prospect

What mobile operating systems is Prospect available on?

Prospect is available today on iOS and Android.

ProspectPicks

More to come...

ProspectArena

More to come...

Prospect Data Oracle

More to come...

ProspectAI Prediction Model

More to come...

$CHAMP

If the protocol is buying at a premium to floor price, how can it remain solvent?

Baseline rebalances liquidity in such a way that the amount of reserves acquired selling $CHAMP at a premium will always exceed the amount of reserves used to buyback $CHAMP. This inequality ensures that the protocol will always have sufficient reserves on hand to buy all tokens in circulation.

How much can the floor price increase by?

It's impossible to forecast the magnitude or velocity of appreciation for the floor price. It's important to consider the factors that drive the floor price. The floor price increases when the protocol realizes profitability from LPing, liquidity rebalancing and borrows. The more price discovery there is, the more rebalancing there is, the more reserves are pulled into floor which adds to protocol's profitability.

Why is the anchor position needed?

The anchor position is needed because it helps the protocol generate profits. It allows the protocol to sell $CHAMP at a higher price than its safety net, which is the floor price. However, it also comes with a risk, if the protocol buys $CHAMP at a higher price, it can reduce profitability. So, the anchor position is a balance between generating profits and speculative trading.

What happens if third-parties provide liquidity?

Given the permissionless nature of the Uniswap protocol, there is nothing preventing third-parties from providing liquidity to the pair. This liquidity, however, will be independent of Baseline contracts and will not accrue to protocol. Protocol accounting and profitability will not be affected by third-party liquidity, either. That's because to become a third-party LP, one must first acquire $CHAMP token from the protocol.

What actually triggers rebalancing?

shift() and slide() in MarketMaking.sol are responsible for rebalancing and can be called by anyone. Practically, we expect on-chain keepers to call the rebalances.

What happens if i don't repay the loan?

Since every token is backed by reserves at the floor price value, the protocol doesn't need to manage a liquidation engine, meaning the protocol doesn't seize the borrower's assets. In the event of a default (due to expiry), the protocol simply burns the collateral, reducing the circulating supply and reserves at a ratio that grows the intrinsic value.

Is there a capacity on how much the protocol can lend out?

The lending capacity of the protocol is 100% of the reserves, meaning the total value of $CHAMP in circulation.

Why is the origination fee so high when other lending markets charge less?

The origination fee is a fixed, one-time fee unlike traditional lending markets that charge an annualized interest rate that changes with market demand. Unlike other lending protocols, this credit facility is available regardless of underlying market conditions.