What Does Negative Rebase Mean?
The SCIENTIA token is a negative rebase token. Therefore, it will continuously rise in price, guaranteed. Now you must be thinking: What is negative rebase and how does it work?
So if you want to learn more about negative rebase, you’ve come to the right place.
Let’s dive right in.
What Is Negative Rebase?
A rebase token is designed so that the circulating supply of the token will adjust according to fluctuations in its price. This expansion and contraction is what we call a rebase mechanism.
Rebase tokens are similar to stablecoins in that they both have price targets. However, unlike stablecoins, rebase tokens’ supply is elastic, so the circulating supply adjusts accordingly to market conditions without changing the value of the tokens in users’ wallets.
How Do Rebase Token Work?
A rebase protocol is something that happens routinely. For example, SCIENTIA token has a rebase scheduled every hour with a target price that is increasing by 3.14% every 6 hours until it reaches a guaranteed price of 314,159$.
What is the experience of the users? As their tokens increase in price, the supply contracts. Therefore, the total value of each wallet remains the same. The actual value is entirely dependent on supply and demand. If demand is larger than supply, than the market cap of SCIENTIA will increase and so its price. Only a little rebasing or none at all will be needed, and therefore the supply stays constant. If supply is larger than demand, than the market cap of SCIENTIA will decrease and so would its price. However, now the rebase kicks in and stabilizes the price by reducing supply to guarantee a steady price rise.
Why Is Scientia A Negative Rebase Token?
Negative rebasing guarantees a stable price increase irrespective of supply, demand and market fluctuations. This is highly attractive for holders and will also increase the attractiveness of the project as a whole. This will help to accumulate more and more investors and thus money for the SCIENTIA trust.
Conclusion
There is a promising future for SCIENTIA. Its price will continue to rise due to the negative rebase, no matter what. This will attract SCIENTIA investors to jump on board.
Originally published at https://dev.to on October 19, 2021.
