How Does a Rebase Mechanism Work in Practice?
A rebase mechanism works by increasing or decreasing the number of tokens in every holder's wallet. This is done through a smart contract that automatically adjusts the supply based on a predetermined formula.
The rebase can be triggered by a specific time interval or by a change in the token's price relative to a target price. The goal is to maintain a stable price peg.
The value of each token changes, but the total value of a user's holdings should remain proportional to their share of the total supply.
Glossar
Rebase Token
Algorithm ⎊ Rebase tokens operate through a dynamic supply mechanism, adjusting the circulating token quantity based on a predetermined algorithmic function, often tied to price fluctuations or time-based schedules.
Rebase Mechanism
Mechanism ⎊ A supply adjustment technique where the total number of outstanding tokens is proportionally altered across all holders based on a predetermined algorithmic rule set.
Rebase Events
Event ⎊ Rebase events, within the context of cryptocurrency derivatives and financial instruments, represent algorithmic adjustments to the circulating supply of a token, typically designed to maintain a target price or peg.