Place chopped onion in a large heavy-bottomed saucepan with olive oil, garlic, chili, basil stalks, and onion seeds. Season with salt and pepper. Cook gently over low heat for 10 to 15 minutes until softened, stirring occasionally.
Add fresh tomatoes, canned tomatoes, soy sauce, 1 teaspoon of the liquid smoke, bay leaf, maple syrup, smoked paprika, and cold water. Bring to a boil, and simmer gently until the sauce reduces by half, about 30 minutes.
Add the basil leaves, blend the sauce in a blender.
Pour the blended sauce through a fine mesh sieve pushing on the sauce to force it through , into a clean pan. Add the vinegar and the sugar. Place the sauce over medium-heat and simmer until it reduces and thickens to the consistency of ketchup about 60 minutes. Add the remaining 1 teaspoon hickory smoke liquid smoke, and taste for salt and pepper, adding more if desired.