What is crypto rebasing?
Crypto rebasing, also known as token rebasing or elastic supply,
is a mechanism used in certain cryptocurrencies such as Olympus,
TempleDAO, and Snowbank, to adjust the total supply of tokens
automatically. It is designed to address the problem of price
volatility and maintain a stable value for the token.
In traditional cryptocurrencies like Bitcoin or Ethereum, the
total supply is fixed, meaning that the number of coins in
circulation remains constant (subject to new coins being mined or otherwise created). However, in
rebasing cryptocurrencies, the total supply can change periodically
based on predefined rules, generally intended to keep coins at a
predetermined value. Examples of these predefined rules include
rebase period rules, which stipulate how frequently a tokens supply
will be adjusted and rebase formula rules which stipulate how the
tokens supply is adjusted based on deviations from the target
price.
