Adopted from the AMPL Algorithm. An Introduction of the Rebase System.

2021/04/16

Adopted from the AMPL Algorithm. An Introduction of the Rebase System.

Cryptocurrencies have evolved a lot over the past few years and most of all, new models have been coming in and revolutionizing the whole concept of cryptocurrencies, eventually making it easier and possible for everyone to get a piece of the pie. Since, many DeFi(Decentralized Finance) systems have been coming in, most of which attracted many people because of easier profits and returns on their investments. Until now, AMPL was the algorithmic stable coin that was being used but it was highly volatile. The inflation and deflation model of AMPL has been tested by the market and it works well to some extent but is more prone to failure as the chances of volatility get high, which led people towards losing their tokens.


Let us discuss the Rebase Systems, basically, in a rebase system, the total supply of the tokens is not decided, instead they are adjusted automatically on a routine basis. So, these adjustments are called rebases. So, these adjustments are based on the market demand and supply, so the traders holding high proportional does not get affected or diluted, instead, the supply stabilizes over time. As rebases are more like Stable Coins, but unlike them rebases cannot be governed in terms of total supply as it stabilizes itself with time. Like every other cryptocurrency, the risk factor is still high as the expansion and contraction can sometimes give or take profits from traders.


There are many tokens that are available out there with elastic supply such as AMPL, RMPL which is a fork of AMPL, and YAM. All these stable coins had some differences, but they all are highly volatile. Over the year, many people have modified the AMPL token, but none were able to utilize it in a manner where the traders have some security. AMPL got a lot of attention when it first kicked off and during their launch, they were able to raise $5 Million in five seconds but it heavily relied on the chain-link oracle price feed to determine AMPL exchange rate, it was also listed on Uniswap and Bancor.


SATO on the other hand is the first stable coin to adopt AMPL algorithm and offering liquidity pool mining as before that, there was no concept of that in AMPL. It is essentially a rebase system that works at inflation and deflation, but it is much improved and enhanced as it has the capability to rebase multiple smart chains.


As we know that rebase at AMPL happens every 24 hours which means that after every 24 hours or one day, the purpose to rebase is to increase the current supply and control the price. For example, we aim for SATO to achieve a price of $2, if the price increases from $2, the rebase will increase the token supply to keep the price at $2 and reducing the price of each token, on the other hand, if the price goes below $2, the rebase will decrease the token supply to maintain the worth hence increasing the worth of each existing token after rebasing it.


To be even more specific, we can regard the whole Rebase system as:


It might seem a little off as you might be thinking that, in case of rebase where tokens are decreased, the trader might lose his/her token, the idea is that it does not matter how many tokens do you have in your wallet, what matters the most is their worth if you had 10 SATO tokens in your wallet before rebase happened and each token was worth 0.5$ after the rebase you are left with 8 tokens, but now each token is worth $0.7, which means the worth remains almost same or more.


Rebase systems are not a new concept; in fact, it is a relatively old concept, but SATO has adopted it with more functionality and added more power to it to utilize all the benefits from it. As we have made SATO/SAP tokens available at SwapAll application and the rebase time is already provided there, so the traders can work accordingly and can gain more profit. The cryptocurrency market is highly volatile, but the rebase systems have revolutionized the whole concept of token supply. There were only a fixed number of tokens which automatically led to a price hike when their supply gets to a point of shortage.


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