Elastic Supply Tokens
From CryptoWiki
(Redirected from Algorithmic stablecoins)
Basics
- Aka rebasing tokens or Elastic finance (EeFi)
- From The Defiant (11-1-2021):
"These types of crypto assets flourished last year, with AMPL, YAM, and BASED making headlines.
The quick definition for these tokens is that instead of price volatility, they have supply volatility. Their token supply expands and contracts in response to market demand to maintain a pre-determined target price. Rebases magnify holders’ gains when the price is going up, but also magnify losses on the way down, which is why it can be a risky investment. Another common criticism they get is that they historically haven’t been able to hold their peg, which in theory would make them less useful than a stablecoin as a means of exchange."
For more in depth analysis, check out the full post.
