DeFi100-Rebase Project Insight: A Synthetic DeFi Index Utilizing Rebase Mechanics

Many users struggle to keep up with the rapid developments the DeFI space undergoes. The 100D token aims to solve this issue by pegging its price to the top 100 DeFi coins by market capitalization.

By
Greg Gotsis
on
March 3, 2021
Category:
Project Insight

Introduction

As crypto continues its rapid growth in this bull market, the Decentralized Finance(De-Fi) sector continues to grow exponentially. De-Fi has now rooted itself into crypto markets and does not have any plans on going anywhere. Since the new year, De-Fi has only seen increased demand, with a 100% + increase in TVL from 15 B to 38 B in three months. The team at Wrapp3d has identified this demand and has released their first project to capitalize on this, DEFI100-Rebase. This token is an elastic supply token that is pegged to the market cap of the top 100 De-Fi tokens. This novel rebase token is the first to be launched on the Binance Smart Chain (BSC), and the team has already experienced a bit of success.


Elastic Supply Tokens

This type of token is engineered through smart contracts, where the supply of such token is not fixed as it adjusts routinely. Depending on its model, unlike the fixed supply of Bitcoin and the unlimited supply of Ethereum, these tokens have a dynamic supply. The mechanism used to adjust the supply is referred to as a rebase; these are carried out to inflate or deflate supply without diluting users' percentage of tokens. Rebases are utilized to peg a token to a specific price using economic laws of supply and demand. The idea is that the supply shift will push the nominal price towards its target price (equilibrium) over time. For example, say a target of $1 per token is the equilibrium, supply will keep changing -expanding when above $1 or contracting when below $1- to realize the target. Due to these mechanics, it is essential to note that there is no point in tracking the token price, as the market cap is what truly matters.

For those who wish to learn more about Elastic Supply tokens, check out the following article:

Cryptonomics: Elastic Supply Tokens Explained


DEFI100-Rebase

This elastic supply token utilizes oracles to peg its price to the top 100 De-Fi tokens. This is done at a ratio of 1:100 billion, meaning currently, the index is pegged at .65 cents as the market cap of the top 100 DeFi coins is $65,000,000. For users who wish to track the top 100 DeFi tokens, reference the following coingecko data. As previously mentioned, DeFi has been rapidly expanding, and the space has been developing at a lightning-fast speed. The purpose of D100R is that it creates a user-friendly index that tracks the most dominant DeFi plays without the headache of researching them all. This rebase token allows users to easily keep track of the future growth of DeFi through a single token. In short, the team at Wrapp3d has introduced a novel rebase token to the BSC that allows users to follow the largest DeFi tokens by market capitalization effortlessly.


Key Metrics


Smart Rebases

Ampleforth (AMPL) and Base Protocol (BASE) are some of the most prominent rebase tokens, but the space is relatively new. Ampleforth utilizes a fundamental rebase mechanism, expanding supply when over $1 and contracting when below. These expansion and contraction phases contain specific parameters which govern the rebase. The team behind DEFI100 has decided to incorporate their own novel rebase parameters, coined "Smart Rebases." 

The team has incorporated the following parameters in hopes of best achieving a constant equilibrium price:

  • Positive Rebase are uncapped.
  • The difference between Spot Price & Target Price should be greater than 5% for rebase to occur. If the difference is lesser than or equal to 5% there will be no rebase.
  • Negative Rebase are capped at 10%. This gives the market forces to rebalance the demand/supply and bring Spot price equal to or higher than the Target price.

The idea is that these parameters innovate on the traditional rebase models and help to avoid issues seen in previous elastic supply tokens. The negative rebase cap is a huge factor of DEFI100's "smart rebase" model, attempting to ward off the possibility of a death spiral. Many elastic supply tokens have reached phases, where they are stuck in negative rebases due to constant selling pressure. A negative rebase can be no larger than 10% to avoid these scenarios for the D100 token. Overall these parameters are meant to efficiently enforce the peg price of the top 100 DeFi tokens.


Oracles

Graphical user interface, applicationDescription automatically generated

This protocol utilizes price oracles to accurately peg 100D to the top DeFi tokens' aggregated market cap. Specifically, DEFI100-Rebase is powered by Decentralized Information Asset (DIA) oracles. These oracles are maintained by DIA, an open-source financial information platform that utilizes crypto-economic incentives to source and validate data. This allows for accurate price feeds sourced from DIA's decentralized oracles to ensure the peg price is correct. These oracles are necessary as there would be no secure way to peg D100 to the top 100 DeFi tokens' market capitalization without them.


Liquidity Incentives

The Wrapp3d team was sure to incorporate liquidity incentives to bootstrap the success of the D100 token further. To provide liquidity and yield farming rewards, the team has allocated 20% of the initial supply (500,000) towards incentives. The first liquidity incentives are being provided using Value DeFi's Farm as a Service (FaaS) to enable D100 staking rewards easily. Leveraging Value Liquid technology, the team has sent 382k D100 tokens to a reward pool which will be distributed over 400,000 blocks (approx. 14 days).

Even further, the team is working to incorporate passive yield mechanics. This will be achieved through combining Reflect Finanances’ (RFI) code into the DEFI100-Rebase smart contract. This will introduce a transaction fee on all 100D transactions, but the fee is redistributed to 100D tokens holders. This tokenomics model allows long-term holders to earn yield through solely holding the token. The smart contract will distribute the transaction tax amongst holders automatically based on their percentage of holdings. Overall, the Wrapp3d team was sure to innovate a unique system for liquidity incentives into their rebase token.


RoadMap

The team has successfully launched their rebase token and listed it on a few DEX's. This is only the beginning of innovation for this product as the roadmap has lots of developments in store. The following features are included in the current DeFi100 roadmap:

March 2021

  • Farming and Staking Pools
  • CoinnGeck & CoinMarketCap listing
  • RFI Code Integration

Q3 2021

  • Heco Chain Launch
  • Governance Integration
  • Revised Roadmap


Concluding Thoughts

The team at Wrapp3d has introduced a novel rebase protocol to the Binance Smart Chain. Many users struggle to keep up with the rapid developments the DeFI space undergoes, which the 100D token aims to solve. This rebase token effectively tracks the most prominent DeFi protocols in an automated way. The key to this token's success is to continue striving for mass adoption, making the 100D token a go-to for tracking the DeFi market cap.

Overall the DEFI100-Rebase token takes all the concepts from traditional rebase tokens such as AMPL and innovates on the model. Many people struggle to keep up with DeFi, and this elastic supply token helps with just that. The unique yield incentives coupled with the “Smart Rebases” set this token apart from others. As DeFi continues to expand, we can expect to see more adoption for this token, resulting in an increasing market cap as more people turn to the 100D token to reference DeFi growth.

Overall it is vital to proceed with caution when purchasing tokens that have just been listed. For those who have not already read our articles on safety in the BSC it is crucial to reference the following items, HERE and HERE.

This is a paid press release, BSC.News does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. Readers should do their own research before taking any actions related to the company. BSC.News is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned in the press release.


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Greg Gotsis

Greg (GoonTrades) is BSC News' Chief Editor and is also a writer for the team. Currently enrolled as an economics major, he finds himself as a cryptocurrency researcher, writer, and technical trader.