# Rebase Tokens

Source: https://developers.bitgo.com/docs/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

1. **Reward Distribution**: Automatically distributes staking or protocol rewards without requiring individual transactions
2. **Price Stability**: Maintains target pricing through supply adjustments rather than external market forces
3. **Proportional Ownership**: Ensures all holders maintain their relative share of the total supply
4. **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**: The platform synchronizes balances with on-chain data to ensure accuracy
- **Periodic Updates**: BitGo detects and processes rebase events reliably within 12 hours of occurring on-chain
- **Fast Balance Updates**: Rapid detection and processing of balance changes from rebase events
- **Transaction Records**: Each rebase event generates a transaction record in your wallet history for reconciliation purposes