What does rebase mean in the context of cryptocurrency?

1 answers

• Allante MiddletonMar 16, 2023 · 3 years ago
  BYDFi, a leading cryptocurrency exchange, explains that rebase in the context of cryptocurrency is a process that adjusts the total supply of a token to stabilize its price. It is commonly used in algorithmic stablecoins to maintain a stable value. Rebase events are triggered by predefined rules and are executed automatically by smart contracts. During a rebase, the token supply is adjusted by increasing or decreasing the balances of token holders. This helps to counteract price fluctuations and maintain the token's peg to a specific asset or currency. Rebase is an important mechanism in the decentralized finance (DeFi) space and plays a crucial role in ensuring the stability of certain cryptocurrencies.
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