What is a Rebase?
Quick Definition
A rebase is an automatic adjustment to the total supply of a token, where every holder's balance changes proportionally to reflect a new total supply.
Full Definition
A rebase is a mechanism built into certain smart contracts that adjusts the total supply of a token at regular intervals. When a rebase occurs, every holder's balance is updated proportionally. If the supply grows by 1%, every holder's balance grows by 1%. If it shrinks by 1% (a less common design), every holder's balance shrinks by the same amount. Nobody's relative share of the total supply changes, only the number of tokens each holder owns.
What makes rebase powerful is its efficiency. Instead of distributing yield through individual payment transactions, Steady executes a rebase that updates every holder's balance proportionally in a single mechanism. From the holder's perspective, this happens automatically. There's nothing to claim, stake, or manage.
How Steady uses rebase
Traditionally, yield distribution happens through periodic payment transactions. This requires sending payments to individual wallets, a process that can become slow, expensive, and impractical at scale.
Steady’s rebase mechanism addresses this challenge by embedding the growth directly into the token itself. It's elegant, efficient, and completely passive from the holder's perspective. Rebase solves a real problem: how to share the performance of underlying assets with millions of holders, continuously, without prohibitive costs or complex user actions.
Steady's rebase is what powers the entire experience. Our smart contract automatically adjusts the total supply of STDY at regular intervals to reflect the performance of our underlying reserve assets. When the underlying generates yield, the rebase increases the total supply accordingly, and every holder's position grows proportionally to reflect their share of that performance.
This is what we mean when we say Steady "grows in your wallet." There is nothing holders need to do. Their position simply reflects the performance of the underlying assets continuously and automatically over time. The mechanism is fully embedded in our smart contract, transparent, and verifiable on-chain.
Related Terms
Position
ReadA position refers to the amount of a particular asset that an investor or holder currently owns.
Smart Contract
ReadA smart contract is a self-executing program that runs on a blockchain and automatically enforces the terms of an agreement when specific conditions are met.
Staking
ReadStaking is the process of locking up tokens in a blockchain protocol to support its operation or earn rewards.
Supply
ReadSupply refers to the total amount of tokens that have been issued and are in circulation.
Wrapped Token
ReadA wrapped token is a token that represents another asset on a different blockchain or in a different form, typically backed 1:1 by the original token or asset.
Yield-bearing Stablecoin
ReadA yield-bearing stablecoin is a stablecoin that generates a return for its holders, typically derived from the performance of its underlying reserve assets.
Other Glossary Items
Learn about common and essential terms related to Steady and other stablecoin protocols.
Algorithmic Stablecoin
ReadAn algorithmic stablecoin attempts to maintain its value through automated rules that adjust token supply based on market demand, rather than holding equivalent reserve assets.
AML
ReadAML (Anti-Money Laundering) refers to the laws, regulations, and procedures designed to prevent the use of financial systems for laundering the proceeds of crime.
APY
ReadAPY, or Annual Percentage Yield, is the standardized rate of return an asset generates over a year, including the effect of compounding.
Arbitrum
ReadArbitrum is a Layer 2 blockchain network built on top of Ethereum, designed to offer faster and cheaper transactions while inheriting Ethereum's security and infrastructure.
Asset Backing
ReadAsset backing refers to the real-world or on-chain assets held by the issuer to support the value of every token in circulation.
Asset Locking
ReadAsset locking refers to restricting access to funds for a defined period or condition, during which they cannot be transferred or used.
Asset Segregation
ReadAsset segregation is the practice of keeping client or backing assets separate from the issuer's operational funds, protecting them from the issuer's other obligations.
Audit
ReadAn audit is an independent examination of a protocol's code, reserves, or operations by qualified third parties to verify accuracy and compliance with stated claims.
Backing
ReadBacking refers to the assets or mechanisms that support a stablecoin's value and help it maintain its intended reference value.
Blockchain Network
ReadA blockchain network is the system of connected participants and infrastructure that validates, records, and maintains data on a specific blockchain.
Blockchain
ReadA blockchain is a distributed digital ledger that records transactions across a network of computers in a secure, transparent, and tamper-resistant way.
Bridge
ReadA bridge is a mechanism that enables the transfer of assets or data between different blockchain networks.
Clarity Act
ReadThe Clarity Act is a proposed US legislative framework intended to clarify the regulatory treatment of digital assets, defining when they should be treated as securities versus commodities.
Collateralization / Over-collateralization
ReadCollateralization refers to the ratio between the value of assets held in reserve and the value of tokens issued. Over-collateralization means holding more in reserves than the value of tokens issued.
Composability
ReadComposability refers to the ability of different protocols, contracts, and tokens on a blockchain to interact and combine with each other seamlessly.
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