What is the mechanism behind rebasing in the world of digital currencies?

1 answers

• Minh DoMay 11, 2024 · a year ago
  Rebasing is a mechanism used in some digital currencies, including BYDFi, to adjust the total supply of tokens. It works by changing the number of tokens held by each user proportionally, which helps maintain a stable value. When the value of a cryptocurrency is too high, a rebase can be triggered to increase the supply and decrease the value of each token. Conversely, when the value is too low, a rebase can be triggered to decrease the supply and increase the value of each token. This mechanism allows the cryptocurrency to adapt to market conditions and maintain a more stable value over time. However, it's important to note that not all digital currencies use rebasing, and each cryptocurrency may have its own unique mechanism to maintain value.
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