Rebase Tokens
Overview
Rebase tokens are cryptocurrency tokens that automatically adjust their total supply and individual holder balances to achieve specific economic goals, such as maintaining price stability or distributing staking rewards.
How Rebase Tokens Differ from Standard ERC-20 Tokens
Standard ERC-20 Tokens:
- Fixed supply and individual balances
- Your 1,000 USDT remains exactly 1,000 USDT until you send or receive tokens
- Balance changes only occur through explicit transfers
Rebase Tokens:
- Dynamic supply that adjusts periodically
- Your token balance automatically increases or decreases without any transaction
- Balance changes reflect protocol-level adjustments across all holders
Examples
stETH (Lido Staked Ether):
- Represents staked Ethereum earning validator rewards
- Rebases daily to distribute staking rewards proportionally
- If you hold 100 stETH and earn 5% annually, your balance grows to ~100.14 stETH after one day
AMPL (Ampleforth):
- Designed to maintain price stability around $1
- Rebases daily based on demand and price deviation
- If AMPL trades above $1.06, supply increases; if below $0.96, supply decreases
Pain Points Solved by Rebase Tokens
- Reward Distribution: Automatically distributes staking or protocol rewards without requiring individual transactions
- Price Stability: Maintains target pricing through supply adjustments rather than external market forces
- Proportional Ownership: Ensures all holders maintain their relative share of the total supply
- Gas Efficiency: Eliminates need for individual reward claim transactions
How BitGo Handles Rebase Tokens
BitGo provides support for rebase tokens through specialized infrastructure:
Balance Synchronization
- Eventual Consistency: Platform balances are synchronized with on-chain data to ensure accuracy
- Periodic Updates: Balance adjustments are processed periodically to reflect rebase events
- Fast Balance Updates: Rapid detection and processing of balance changes from rebase events