How Can a "Rebase" Token's Non-Standard Behavior Affect Its Use as Collateral? ⎊ Path

How Can a “Rebase” Token’s Non-Standard Behavior Affect Its Use as Collateral?

A rebase token's supply automatically adjusts to maintain a target price, meaning the number of tokens in a user's wallet can increase or decrease overnight. This non-standard behavior is incompatible with most collateral-based DeFi protocols, which assume a static quantity of collateral.

If a rebase occurs, the collateral value in the smart contract may be miscalculated, potentially leading to incorrect liquidations or under-collateralization, making them high-risk and often unusable as standard collateral.

How Does the High Gamma of Short-Dated Options Affect the Effectiveness of a Static Hedge?

How Does the Rebase Frequency Affect the User Experience of Holding a Rebase Token?

How Frequently Do Rebase Events Typically Occur?

How Does a Price Feed Error Impact an Options Contract’s Automatic Exercise?

How Can a Derivative Protocol Create a “Wrapped” Version of a Rebase Token to Make It Usable as Collateral?

What Is the Risk of an Auditor Making an Incorrect Assumption about the Code?

What Is the “Exchange Rate” between the Wrapped and the Original Rebase Token?

How Does the Taxation of Rebase Tokens Differ from Other Cryptocurrencies?