# Case Study: Baseline Market Maker's First $2.3M Stress Test

By [YES collective](https://paragraph.com/@yes-collective) · 2025-03-18

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On March 11th, YES underwent its first major stress test with a **$2.3M sell-off**. Traditional AMMs often struggle to handle large dumps without severe price collapses. However, Baseline’s V3 Market Maker (BMM) absorbed the pressure efficiently, proving its ability to **mitigate volatility while maintaining price stability**.

![](https://storage.googleapis.com/papyrus_images/a3df44f04044b8547dd5982378a4d6e524ef9922f1ce9613cadd84c005455800.png)

### **Key Metrics**

💰 **Total Sell-Off:** $2.3M

📉 **Price Impact:** -15%

📉 **Market Cap Drop:** $61M → $51M

⚖️ **Liquidity Depth:** Adjusted dynamically to absorb large sells

Without BMM, a standard XY=K AMM pool would have resulted in:

❌ **\-65% price drop**

❌ **Market cap plummeting from $61M to $21M.**

Instead, BMM prevented a catastrophic crash, keeping YES stable.

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**Understanding the Baseline Market Maker (BMM)**
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BMM is a new **liquidity infrastructure** designed to **provide deep liquidity and protect against extreme volatility**.

**Single rebalance() operation** – replaces multiple complex liquidity actions (bump, slide, sweep, drop) with a single efficient function.

**Leveraged Anchor LP** – increases liquidity depth by borrowing reserves against buybacks within a set range.

**Asymmetric Liquidity Design** – prioritizes **more liquidity on the sell-side** to absorb large dumps while allowing price to move up easily.

💡**Unlike XY=K AMMs that distribute liquidity evenly, BMM concentrates liquidity above the floor.** This ensures higher liquidity depth during sell-offs while maintaining a strong price recovery mechanism.

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**How BMM Handled the $2.3M Sell-Off**
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A **step-by-step breakdown** of how BMM adapted to extreme selling pressure:

1️⃣ **BMM started with 254 ETH liquidity depth (-2%).**

2️⃣ **530 ETH sell-off** – BMM absorbed the dump, adjusting liquidity depth to 370 ETH (-2%).

3️⃣ **666 ETH additional selling** – BMM reabsorbed supply, increasing liquidity depth to 486 ETH (-2%).

4️⃣ **An extra 265 ETH sell-off occurred**, but the price barely moved due to the deep liquidity buffer.

**Final Outcome:**

✔️ **Sell-off absorbed without major slippage**

✔️ **Price drop limited to -15%**

✔️ **Market cap preserved at $51M vs. $21M in a traditional AMM**

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**Real-Time Proof: BMM in Action**
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In a separate event (see second chart), a trader executed a **$137K sell in a single clip**.

![](https://storage.googleapis.com/papyrus_images/9ca65285b43290ffcb7db0ac1198dcda4a3983d4026d2d811711f32dda6c78dd.png)

📊 **$137K Sell with <1% Price Impact**

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**Key Takeaways**
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✅ **BMM’s market-making model is resilient against high-volume dumps.**

✅ **Outperforms traditional AMMs in handling liquidity shocks.**

✅ **Protects price stability while enabling upside movement.**

Dumps happen. But with BMM, **$YES didn’t get rekt.**

Instead, liquidity rebalanced efficiently, minimizing impact and preparing for future growth.

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**Next Steps**
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BMM’s resilience during this stress test **sets a new standard for token liquidity infrastructure**. As more projects adopt [**Leveraged Anchor LP**](https://docs.baseline.markets/btokenomics/dynamic_liquidity), we expect even stronger price performance and deeper liquidity across the ecosystem.

**If you’re a token founder looking to protect your token’s price while improving market efficiency, Baseline’s market maker is the solution.** 🚀

[https://mirror.xyz/0xe7AD459A24A10C5E94B76CcD24da62A8394eBf5f/Q9pBLoPxjgg6SatMnkojs5faAyBwlhEQAKFh3jfDFjI](https://mirror.xyz/0xe7AD459A24A10C5E94B76CcD24da62A8394eBf5f/Q9pBLoPxjgg6SatMnkojs5faAyBwlhEQAKFh3jfDFjI)

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*Originally published on [YES collective](https://paragraph.com/@yes-collective/case-study-baseline-market-maker-s-first-2-3m-stress-test)*