The past one day have been hectic, and we’ve seen many discussions about $BASED tokenomics from community members and others.
I’ve read through the comments and DMs that many of you have sent us and we take into consideration many of these concerns:
The communications could have been done better
Why Ethena is allocated tokens;
Why is there a Season 3;
Sybil concerns and so on.
Token launches are inherently complex. They are fundamentally an alignment exercise that requires balancing the need to reward early supporters with the need to preserve strong incentives for long-term ecosystem growth.
We approach the token launch with significant discipline because it establishes the foundation for Based’s future trajectory. Our long-term ambition is to build Based into one of the most valuable platforms in crypto, with a level of distribution reach and user penetration comparable to major consumer fintech platforms such as Robinhood.
Initial token release requires careful consideration of market mechanics. Drop too little and you do not have community. Releasing too much supply introduces absorption risk, where market liquidity may not be sufficient to support stable price discovery at launch. A responsible token launch therefore requires calibrating circulating supply against realistic market demand and liquidity capacity.
Tokenomics should not be evaluated purely through headline percentages. Each protocol operates under different structural constraints and strategic objectives. Based’s allocation framework reflects its capital structure, which includes long-term investors and strategic ecosystem partners such as Ethena. This creates a materially different design compared to projects that launched without external capital participation.
Relative to many projects in the market, Based has maintained a comparatively short pre-TGE engagement cycle. Each participation season was limited to approximately three months, significantly shorter than multi-year point accumulation programmes commonly observed across the industry.
Across two seasons of roughly three months each, Based generated $7.63M in builder fees in Season 1 and $5.34M in builder fees in Season 2. On average, 60–70% of this revenue was redistributed to users through affiliate rewards, rewarding genuine participation and organic advocacy rather than passive point farming. Each season is allocated 8% of the total token supply.
The decision to proceed with launch timing was based on ecosystem readiness rather than macro market conditions. We are not delaying token launch just because “oh market conditions are bad as BTC is below $70k”. Token launches should be determined by product maturity, community formation, and ecosystem participation strength.
As a community, I think we are ready.
We are confident that the long-term value of $BASED is supported by real product usage, ecosystem integration, and sustained community participation, rather than short-term market cycles.
The following sections address common questions regarding Based’s tokenomics and distribution structure that will be launched by Based Foundation.
Q1. Why do Based have to consider listing on other exchanges and allocate Launch Partner tokens?
“Launch Partner” does not refer to a paid influencer or promotional KOL allocation. The label previously caused confusion and is clarified here. “Launch Partner” refers exclusively to exchange launch partners and ecosystem distribution partners. Based’s growth has been driven by genuine users, traders, and builders, and this principle remains unchanged at TGE.
While Based will launch on Hyperliquid, we are simultaneously pursuing listings on additional major exchanges to improve discoverability, accessibility, and liquidity depth. These listings are critical to long-term ecosystem expansion and market efficiency. Allocation associated with exchange partnerships has been negotiated with structured vesting terms.
Q2. Why is Ethena allocated tokens or is within the Genesis Distribution when they are not Based Community?
There is confusion between Community Allocation and Genesis Distribution and we’d like to clarify the terms.
Firstly, our team considers “community” to be the total community that has contributed to the success of Based. Ethena community is one of the groups that have contributed. With Ethena, our community also became larger and many Ethena community members have used Based or HyENA through our partnership. HyENA, a project that was built by Ethena and Based, has been a key growth engine. Allocation connected to that ecosystem activity is treated as community-aligned distribution, not external extraction. In August 2025, Ethena made a strategic investment in Based and that set the groundwork for one of the fastest growing HIP-3 DEX that has generated billions in trading volume.
Genesis Distribution refers to the full categorisation of tokens allocated at the inception of the network. It represents the complete initial token supply breakdown across all stakeholder groups. Not all tokens within the Genesis Distribution are released at TGE.
In recognition of the strategic investment made by Ethena, which has been announced in September, 7.5% of the total supply is allocated to Ethena Community. This allocation is vested, with the first 20% vested over the first three months of TGE, and the remaining to start vesting after one year.
Based Community receive the tokens first before Ethena. Distribution to Based community is released immediately on TGE without vesting. We put Based Community before every other stakeholders.
Q3. Why is there an investor allocation?
Based was built through multiple cycles, including periods where capital support was essential to keep the team and product alive. Early investors funded that runway and accepted long-duration risk when outcomes were uncertain. We have disclosed that Based has been backed by VCs such as Hashed and Spartan since the beginning.
Investor allocation reflects that role and is paired with vesting to align long-term participation rather than short-term supply pressure. Investor allocation is subjected to one year cliff, and linear vesting over 24 months subsequently.
Q4. Why 20% to team? Why not lower?
The team allocation reflects long-term builder alignment and retention of core talent required to execute a multi-vertical ecosystem.
This is the group that shipped through the hardest periods and continues to build the infrastructure and products the community uses today. And it’s even more important to keep the team incentivized so that we can continue to work hard on the protocol and product to deliver value to our stakeholders.
Team allocation is vested and structured for long-term commitment, and team is not able to sell tokens before community.
Q5. Why is season 3 allocation considered under Genesis Distribution if the unlock is happening in May?
We understand that there are some confusion here, but Genesis Distribution is about economic attribution timing, not delivery timestamp.
S3 includes participation from January to May. S3 was partially in-progress during the time of writing, and we've included it into our definition of "Genesis Distribution".
Q6. Why is PUP given token allocation from genesis distribution?
PUP is included in the genesis distribution because it represented something we care deeply about: loyalty that persisted through ups and downs, not just short-term farming behavior.
At Based, we don’t only measure “who clicked most” or “who appeared for one campaign.” We care about who stayed aligned with the ecosystem across different market conditions, including periods where sentiment was uncertain and there was no guaranteed upside.
Holding $PUP is one of the clearest on-chain signals of that alignment.
Why loyalty matters to us (tangibly)
A durable ecosystem is built by users who:
stay through both hype and drawdowns
continue participating when rewards are uncertain
provide social trust and community stability during difficult periods
become repeat users across products, not one-time extractive participants
Those users reduce reflexive sell pressure, strengthen retention loops, and help form a healthier long-term holder base. That directly improves ecosystem quality for everyone over time.
Why $PUP is a meaningful signal
PUP holders, especially those who held across tough periods, demonstrated:
conviction in the broader Based ecosystem direction
willingness to absorb volatility instead of rotating out immediately
behavior consistent with long-term participation, not just airdrop optimization
This is exactly the type of behavior we want to recognize in genesis allocation design.
Important clarification
This does not mean $PUP alone defines contribution, or that other community paths are less important. It is one of several signals in our attribution framework.
But it is an important one, because rewarding users who hold through ups and downs helps us reinforce the kind of community culture we want Based to be built on: aligned, resilient, and long-term. Further, this is a token conversion, and not an airdrop. There will be no snapshot.
Q7. What is your methodology for sybil hunting? Are you going to remove “sybil allocations”?
We conducted a comprehensive analysis across millions of on-chain and off-chain activity records generated on Based, covering trading, product usage, and participation patterns over time. This analysis combines automated detection methods with targeted manual review to ensure that allocation decisions reflect genuine ecosystem participation rather than mechanical or extractive behaviour. To preserve fairness for legitimate users, allocations associated with non-authentic activity patterns may be reduced and redistributed.
Allocations are assessed using a Based Alignment Score framework. The objective of this model is to direct incremental allocation toward users who demonstrate sustained alignment with the long-term growth of the Based ecosystem. The core principle is simple: additional allocation should prioritise users who behave like real users over time, not accounts optimised solely around reward extraction.
At a high level, the framework evaluates multiple dimensions of participation, including:
Consistency and quality of real product usage, rather than isolated bursts of activity
Cross-feature participation patterns that indicate authentic engagement across the ecosystem
Behaviour over time, as opposed to one-off spikes concentrated around reward windows
Community-aligned signals that reflect long-term participation and retention
In addition to quantitative analysis, we performed targeted manual reviews of selected activity clusters to validate whether observed behaviour was economically and behaviourally coherent. This included reviewing trading patterns such as extremely short-frequency BTC trades or repetitive stablecoin-to-stablecoin transactions that do not resemble genuine trading activity. Manual review is used as a validation layer to complement automated analysis, not as a discretionary override.
This combined approach is designed to distinguish long-term ecosystem users from short-term, mechanical, or purely opportunistic participation.
Clarification on self-referrals
Self-referrals alone are not treated as a determining factor in sybil evaluation. While some users have referred wallets they control, many legitimate users have also joined Based through referrals shared by friends and community members. Referral activity is therefore evaluated only as part of broader behavioural and participation signals.
Clarification on certain trading instruments
Users whose activity is primarily concentrated in low-volatility stablecoin pairings such as USDT-USDC may experience allocation adjustments. These adjustments do not fully remove allocations. Instead, they reflect differences in measurable risk exposure and market participation relative to users trading more volatile instruments. Any reductions are redistributed across remaining eligible community participants.
Q8. Why are we giving 8% tokens to S1 and 8% tokens to S2, instead of a larger number? Other projects are doing 10% per season.
Season size can’t be compared without context: especially not without considering time.
Based seasons are intentionally shorter (about 3 months each). Many projects that advertise “10% per season” run seasons that run for years with different supply and emission mechanics. So headline percentages alone are misleading unless you normalize for duration.
As a yard stick for comparison, the bulk of Based’s points program happened during June 2025, lasting till Dec 2025, 6 months. If BASED were to launch token five months later, then our “Airdrop” will be 28.5% (5% added from S3 that ends in May). Community must consider the time per season instead of the headline number.
Our emissions framework is built for sustainability across multiple seasons, avoiding both short-term overconcentration and long-term misalignment.
Your time is the most important thing in Web3. You should be allowed to move on earlier if you dislike us, and you should be allowed to make the choice to stay with us earlier if you like us.
And you're welcome to trade elsewhere if we fall short of your expectations.
Q9. How will Based debit cards points be rewarded?
Yes. Exact breakdown of the token allocation will be revealed in the airdrop checker that we will release before TGE in mid-March.
Q10. Is there buyback / fee-sharing / direct value accrual?
At this stage, we will only announce mechanisms that are finalized and implementable.
For additional value-accrual pathways (including buyback/fee-routing variants), we will communicate only once design, compliance, and implementation readiness are complete. Regulatory adherence is key for us here, and we need time to solve this. We will avoid speculative promises for the time-being.
Q11. Where do reduced/confiscated sybil allocations go?
These allocations will be re-distributed to true Based community members.
Q12. What is the TGE timing?
Current target: March
Currently, we are building out pathways for $BASED to launch to a greater audience with our launch partners (exchanges).
If dependencies shift, we will communicate changes with reasons and updated timelines promptly. We prefer precise communication over premature dates.
