What’s a rebase?
A price-elastic token one where the project’s total token supply is not fixed, but instead automatically adjusts on a routine basis.
These token supply adjustments, called “rebases,” take place per market demand and are done in such a way that users’ proportional holdings ultimately don’t change and this aren’t diluted. Rebases are performed per a specific target price, with the idea being that a token’s nominal price will steadily be moved over time toward its target, e.g. $1 USD.
How unique is Coil rebase...?
First, many rebase projects that peg their target to themselves or other cryptocurrencies are flawed and just marketing gimmick. To be DeFi collateral and a hedge asset, you need to peg OUTSIDE of the cyrptocurrency space. This is how you become less correlated and help hedge the risk, and this is very very important.
Coil system is very unique and it is automated. The team made the rebase every 23 hours in order to let the rebase move 1 hr every day. They believe this way everyone around the world has a fair chance to trade or experience a rebase in their peak hours. What have gone a step further than Ampl and their geyser.
They have made the Coil Spring. Think of it like a geyser on steroids. It will be very similar to an Ampl geyser where you are paid rewards to add liquidity, but we added a unique twist. The team added a Certificate of Deposit type of system on top. The user will choose 1–90 days to provide liquidity. The longer you provide liquidity the larger your rewards will be. Users can do any amount of time they want or as many different transactions as they want. Then they add the liquidity and stake their V2 Token in the Spring.
The catch is if they choose 90 days, then decide on day 10 to pull their liquidity. They will pay a large penalty. This penalty buys Coil on the market and deposits the Coil back into the Spring rewarding all of those people that served their time! This will allow Coil to be much less volatile and much less manipulated from Ampleforth or other rebase coins. In fact once we release this soon, we see many projects replicating our idea.
What is the Spring based on? How were they inspired by it?
The Spring is inspired by the Ampl geyser, but the team saw some flaws with that, and they knew they could make it better to stop the manipulation that happens in Ampl. Currently in liquidity pools and geysers like Ampl, large whales can remove liquidity and pull it without notice. This leads to a lot of manipulation and volatility. This can scare the market and make things very unstable. On top of that large whales can manipulate Ampl to bleed out the smaller investors so they have nothing left. The team saw a huge problem and set out to fix it.
They designed Spring to have a Certificate of Deposit system on top much like you find in the real world. This makes it so everyone can see how much liquidity is locked in, how long it is locked in for, which allows everyone to make better decisions.
If someone elects to enter Spring, they can choose to add liquidity for 1–90 days and/or they can do many different contracts. The longer you provide liquidity, the more rewards you earn. But if you say you will enter for 90 days, but then want to pull out after 10 days, you will pay a large penalty which is very similar to what would happen in the real world. This penalty buys Coil on the market and deposits it back into the Spring rewards pool going back to everyone else in the Spring that did what they said.
This will make liquidity more predictable, and much harder to manipulate. It will help all investors be able to better see and adjust to the market, it will decrease volatility, and stop some of the manipulation. It incentivizes and rewards all of the good network supporters that do what they say they are going to do, and penalizes the bad actors and manipulators.
