Ham to $PHAM: The Road Ahead

🚨 WARNING: This is a very long article. Readers may experience extreme hunger as it discusses ham; bacon, lettuce, and tomato sandwiches and wraps; and strangely, peas. Reader discretion is advised.

pHAM aka $PHAM (pronounced "fam") is a new and innovative index-style asset that allows exposure to six Base tokens by holding a single asset. The primary difference with the design of $PHAM from most index-style assets is that there is no rebalancing. $PHAM is an auto-compounding transferrable vault token (inspired by $wBLT) which generates yield through volatility farming (utilizing Peapods Finance) and hopefully (application pending), $AERO emissions via a pHAM-pwBLT gauge on Aerodrome. Both of these yield sources will increase the intrinsic value of $PHAM through streamed-yield and burning of $PHAM.

Let’s dive in…

$PHAM was created with EQUAL dollar value contributions of each of the six assets, that dollar value being $33.3k for a total of $200k worth of $PHAM.

The breakdown of the underlying asset amounts per 1 $PHAM were as follow:

$BMX: 1

$TYBG: 11,000

$TN100x: 474

$DEGEN: 84

$CHAD: 39,000

$DOGINME: 4,800

At time of creation, the values of each asset above were equivalent to one another, resulting in a weight of 16.66% for each asset.

To mint $PHAM, a user must have the amount of EACH token required. To streamline this process, a custom-zapper was created which allows a user to simply zap their selected bluechip asset (ETH, wETH, USDC) to $PHAM and $PHAM to bluechip asset, avoiding the need for a user to acquire each token individually prior to mint or end up with all six assets after redemption.

The amount of each token is "set" and will never decrease from the original mint amount listed above. However, the required token amounts to mint will increase as auto-compounding yield increases the intrinsic value of $PHAM. Additionally, $PHAM is burned as part of yield-distribution, also increasing the underlying value of each $PHAM.

Assets are never sold within $PHAM (rebalanced). However, the "weights" or percentages attributed to each asset which make-up $PHAM will change, based on the individual performance of each asset compared to the other assets within the pool.

Effectively, $PHAM uses token units to optimize performance which is often the goal of traditional rebalancing.

For example, $BMX has increased in value since the seed of $PHAM considerably, in relation to the other five assets. Remember, each asset started at 16.66% of $PHAM and currently, $BMX is at 23.8%. This can be somewhat confusing, because traditionally some may assume it means the other assets within the pool were sold and the token amount decreased--which is not the case. Simply, the value of $BMX increased more in comparison to the other five assets, increasing its weight.

This works in reverse, also. So, in the case of $BMX, if it were to begin to fall in value faster than the other assets within the pool, the other assets' weight (%) would increase and $BMX’s would decrease.

In both examples above, token amounts to mint $PHAM remain constant, only being equally increased by auto-compounding yield.

$PHAM has a “wrap” and “unwrap” fee of 0.8% and a “buy” and “sell” fee of 0.6%, similar to a typical DEX swap fee. However, the buy/sell fee is in addition to DEX swap fees. These fees go through PeaPod Finance's yield distribution method for the $PHAM pod, which is broken down like this: 10% of yield is directed to buying and burning $PEAS token, 40% directed to streaming $PEAS to the $PHAM pod, and 50% of yield burns $PHAM.

To maximize capital efficiency, pHAM-pwBLT liquidity providers will be encouraged to acquire pHAM and pwBLT individually and provide LP on Aerodrome directly, not through the PeaPod Finance LP vault. This allows pHAM-pwBLT LPs to reap rewards from both the streamed $PEAS and $AERO emissions. This design is achieved by Ham maintaining POL in the pHAM-pwBLT pod then forwarding accumulated $PEAS to the gauge as bribes. While it is possible for someone to provide pHAM-pwBLT into the pod and acquire a portion of the streamed $PEAS, doing so would likely be at a financial disadvantage given they would be forfeiting $AERO emissions and presumably earn significantly less yield overall. *Note: It was not possible at the contract level for the Pod itself to deposit all LP to the gauge, harvest $AERO then stream to the Pod with $PEAS.

In addition to the $PEAS bribes forwarded from the Pod and volume/fees generated by the liquidity pool, each of the 6 underlying token communities’ intend to co-incentivize the pHAM-pwBLT gauge on Aerodrome. There are no set number or agreements, consistency is most important—anyone can incentivize the gauge! It will be exciting to see the bribes roll in for this, which also supports veAERO holders!

Ham intends to lock 50% of the AERO earned from it’s gauge POL into veAERO and vote on the gauge, with the other 50% of earned AERO used to buy back and burn $TN100x!

Wait, wut? Yeah, it’s Ham. Check it out..

The initial seed assets for $PHAM launch which include the $200k pHAM-pwBLT LP and $100k worth of $PHAM (and the value appreciation) will be used as backing for Ham's upcoming L3 NFT collection in the same way The Based LP NFT collection uses $TN100x. The L3 NFT launches soon and will have a total supply of 1,000. Each will mint for $300 worth of $TN100x pegged to the value of $0.002551. This means 117,600 $TN100x are required per mint.

The 117,600,000 $TN100x from the mint will be burned in addition to all $TN100x bought back from the pHAM-pwBLT gauge POL yield, supporting the backing for both the Based LP and Ham LP NFT collections.

Well, that’s hammish if I’ve ever seen it. Holy shit.

Let’s take a step back for a second…

What is the benefit of $PHAM for each of the other underlying asset communities?

Well, beyond marketing and a collective "fam" adventure, it's really this simple:

Every time $PHAM is minted, a portion of the mint volume is buying each of the six assets directly on market. In the example of $100k and equal weights, $16.6k of buy pressure would be imposed on each asset. If one asset is outperforming other assets within the pool and it’s weight has increased to say, 25%, then that community would see $25k of buy-pressure on their token from the $100k example. Massive.

$PHAM introduces seamless exposure to six base assets inclusive of auto-compounding yield and streamed-yield. The communities selected have supported Ham from the beginning and are part of the Ham fam; hence, $PHAM!

Alright, we’ve covered $PHAM and the upcoming L3 NFTs…so tell me about this sandwich asset $PHAM is paired with.

What is pwBLT? It’s layered just like a bacon, lettuce, tomato sandwich. Let’s start at the beginning.

BLT is the core asset of pwBLT and is the market-making liquidity for BMX Classic, a GMX-style perps market. Morphex has innovated on top of GMX's trusted contracts (even receiving a bug-bounty for their work from GMX themselves) by enabling market-making liquidity to be utilized in multiple ways to maximize capital efficiency. They achieved this by wrapping BLT into wBLT, which is an auto-compounding vault token that is transferrable. This design allows liquidity providers to earn market-making yield from BMX Classic, then wrap BLT into wBLT and: 1. Use wBLT as a collateral asset to borrow against it - or - 2. Use wBLT as a paired pool-2 asset (e.g. BMX-wBLT is the native liquidity for BMX) allowing LPs to earn pool-2 rewards in additional to the auto-compounding BMX Classic LP yield.

What the ham. Where have I been? My cave has been getting cold…

This next paragraph is dense, but you’ll want to get through it. Pay close attention.

You see…BMX has been live on Base for 9-months, Morphex has been operational for 3+ years across Fantom, Base, and BNB -- collectively doing over 1.2B in volume. BMX Classic revenue last week was ~$57,000 and was recently the 5th highest revenue generating protocol on @base per @defillama. And, that only takes into account BMX Classic, however Morphex just launched BMX Freestyle to run in parallel to BMX Classic, which is BMX's @symm_io (intent-based) perpetual market enabling 200+ trading pairs. Revenue from Freestyle is just kicking in and a large portion of it will go toward BLT/wBLT, adding another auto-compounding revenue stream to it’s backing value. Freestyle kicks off a $100k trading comp launching June 1 aligned with onchain summer on base.

SO WHAT THE HAM IS pwBLT?! JUST TELL ME ALREADY.

pwBLT is wBLT inside of a PeaPods Pod, which adds another stream of revenue which is volatility yield. Morphex is the first and only perps protocol across ANY network to have a custom router integrated into aggregators which accesses the underlying bluechip assets within a perpetual liquidity market through mint and redeem functions; currently Kyber and Open Ocean support it, with others in the pipeline.

Why is this integration important? Because it enables the underlying bluechip assets within BLT to be accessed through mint and redeem functions via the aggregator, optimizing price for swaps and volume and fees for BLT.

Which, makes BLT, wBLT, and subsequently pwBLT a prime asset for volatility farming!

These innovations maximize capital efficiency for liquidity providers by increasing BMX protocol revenue and the yield LPs earn, helping to off-set (and aiming to be net positive) the real-risk and exposure providing market-making liquidity on any platform/protoocl comes with, which is trader wins (remember, BLT is market-making liquidity for perps!). That’s the entire focus of BMX, to maximize capital efficiency for liquidity providers and provide the best trading experience for traders by offering two options for perpetual markets with access to 200+ pairs, 100% of all revenue flowing back to LPs and token holders.

It’s been a long day, I’m ready for the HONEY BAKED HAM.

Here it is:

wBLT is auto-compounding earned yield, then deposited into pwBLT generating additional volatility yield, then it’s paired with pHAM which is also generating it’s own volatility yield through swap arbs of the underlying asset value to market price, then the pHAM-pwBLT pod is generating volatility yield which 50% of is used to burn $PHAM and 40% of is streamed as $PEAS, which the $PEAS from POL will be forwarded to the pHAM-pwBLT Aerodrome gauge as bribes to maximize yield via $AERO which is in addition to community funded bribes and veAERO votes from POL, ultimately creating an LP of two individually auto-compounding assets BOTH INDIVIDUALLY BACKED BY A BASKET OF UNDERLYING ASSETS WHICH THE TOKEN CAN BE REDEEMED FOR THE UNDERLYING ASSETS AT ANY TIME.

You can dump $PHAM all you want, it will presumably be arb'd by independent actors to backing value minus the cost of redemption (a floor, so to speak). Because $PHAM has intrinsic value as it is required to access the yield that it generates, which is expected to be significant the market could price it beyond backing value. Only the market can decide!

The total supply of $PHAM is not infinite, because the six underlying assets are required to mint it. The asset with the lowest total supply of the six is BMX, which is just under 3,000,000 now, after governance voted to end all emissions which reduced total supply by ~70% (future emissions were burned and allocation weights rebalanced (with excess burned) to the reduced total supply figure). Because BMX can be used in native liquidity, single-staked for protocol yield, and will be used for both of these options on Mode Network once BMX launches there, not all BMX will be available to be used to mint pHAM. This helps understand the supply of pHAM and can be extrapolated to the other assets that are used to mint $PHAM.

Alright, we’re here…the last section.

$PHAM has already sent shock waves across Base and it’s likely that every network will pay attention to the HAMMISHNESS happening with $PHAM! Base is leading the way in DeFi and MemeFi innovation with collaboration amongst a vast number of community members, protocols and builders. $PHAM is the result of the culture that has been established here on @base, the INCREDIBLE pedigree of builders and community support across the entire ecosystem, with specific highlight for the underlying asset communities and infrastructure providers: @HamOnWarpcast, @tybasegod, @BasedChad6969, @MorphexBMX, @Degentokenbase, @Doginmeonbase, @PeapodsFinance, and @AerodromeFi !

You made it.

The first 500 wallets to mint $PHAM have been whitelisted to mint 2 of the upcoming Ham LP NFTs on Ham chain, backed by $PHAM.

Welcome to the PHAM!