Overview
A rebase token adjusts its supply periodically so that holders keep a constant share of the network value. The token's balance changes automatically while the value held stays proportional. This mechanism differs from standard fixed-supply tokens.
How It Works
At each rebase, the protocol adjusts total supply based on price targets, adding or removing tokens from all holders proportionally. A positive rebase increases balances; a negative rebase decreases them. The per-token price moves accordingly.
Why It Matters
Rebase tokens experiment with supply elasticity as a stability or growth mechanism. They are used in some algorithmic stablecoins and yield products. Their behavior can confuse users and carries significant volatility and regulatory risk.
Related Concepts
Rebase Tokens relate to Algorithmic Stablecoins and Tokenomics. They are a niche but important experiment in supply design.