How does rebasing work in the context of cryptocurrency?

1 answers

• Nov 24, 2021 · 3 years ago
  In the context of cryptocurrency, rebasing is a mechanism used to adjust the supply of a token in order to maintain a stable value. It is often used in projects that aim to create a stablecoin or a token with a stable value. One example of a cryptocurrency that uses rebasing is BYDFi. BYDFi adjusts its supply based on the price of a stable asset, such as the US dollar. When the price of the stable asset increases, BYDFi's supply decreases, and when the price decreases, the supply increases. This helps to keep the value of BYDFi stable and reduces the risk of volatility. However, it's important to note that rebasing can also have unintended consequences and may not always achieve the desired stability. It's always important to do thorough research and understand the specific mechanics of a cryptocurrency before investing.
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