❓What is a positive Rebase Token?

Elastic Supply Tokens Explained

Positive rebase tokens have a unique mechanism where the circulating supply of the token constantly increases. Unlike other cryptocurrencies, where supply changes through mining or halving events, rebase tokens adjust the supply algorithmically based on the current supply. This means that the amount of tokens in user wallets can change periodically, but the proportion of your holdings to the total supply remains the same.

This ensures that you retain your share of the network regardless of price fluctuations, providing a more stable and predictable investment opportunity.

Wait, aren’t many cryptocurrencies operating with a changing supply? Yes, somewhat. Currently, 6.25 new BTC is minted with every block. After the 2024 halving, this is going to be reduced to 3.125 per block. It is a predictable rate, so we can estimate how much BTC will exist next year or after the next halving. Supply-elastic tokens work differently. As mentioned, the rebasing mechanism adjusts the token circulating supply periodically. What does this mean from a practical standpoint? The amount of tokens in user wallets changes if a rebase occurs. The idea is that your holdings proportional to the total supply haven’t changed with the rebase. If you had 1% of the supply before the rebase, you should still have 1% after it, even if the number of coins in your wallet has changed. In essence, you retain your share of the network no matter what the price is.