Tokens & Assets

Rebase Token

Elastic Supply Token

Token with elastic supply that adjusts to maintain price stability

Definition

Rebase tokens automatically adjust their total supply to maintain a target price. The number of tokens you hold changes, but your proportional share of the total supply remains constant.

Rebase Token (Elastic Supply Token) is a token design term used to understand Token with elastic supply that adjusts to maintain price stability. In practice, it matters because it affects how users evaluate protocols, compare opportunities, and avoid hidden assumptions.

Example

AMPL (Ampleforth) increases or decreases all holders' token balances daily based on price deviation from $1.

1

How it works

In practice, the concept shows up like this: AMPL (Ampleforth) increases or decreases all holders' token balances daily based on price deviation from $1.

2

Why it matters

Rebase Token matters because small misunderstandings in DeFi can turn into bad pricing, liquidation, governance, custody, or smart-contract risk. A good mental model helps you compare protocols without relying on marketing language.

3

What to check

Treat it as a token-design concept: inspect supply mechanics, holder incentives, redemption paths, and governance controls. The main checks are: Supply volatility; Complexity; Unpredictable returns.

Risks to Consider

  • Supply volatility
  • Complexity
  • Unpredictable returns

Common Questions

What does Rebase Token mean in DeFi?

Rebase Token means Token with elastic supply that adjusts to maintain price stability. The useful question is not only the definition, but how the mechanism changes risk, return, liquidity, or governance for the user.

How is Rebase Token used in practice?

A practical example: AMPL (Ampleforth) increases or decreases all holders' token balances daily based on price deviation from $1.

What should I check before relying on Rebase Token?

Check supply volatility, complexity, unpredictable returns. Also verify liquidity, oracle assumptions, admin controls, and whether the protocol has been tested during stressed markets.

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