A rebasing token is a type of cryptocurrency that automatically adjusts its supply based on preset rules. The purpose of this adjustment is to maintain a target price or value, usually tied to a stable asset like the US dollar.When the price of a rebasing token moves away from its target value, the token’s supply expands or contracts. If the price rises above the target, the supply increases, meaning that each holder’s balance of tokens decreases in relation to the overall supply. Conversely, if the price drops below the target, the supply contracts, increasing the value of each token held.This mechanism can help stabilize the token’s price over time, attracting investors looking for reduced volatility. However, it can also create confusion among users regarding their actual token holdings and value, as the number of tokens they own can change without any trade or exchange activity. Overall, rebasing tokens aim to create a unique solution for price stabilization by manipulating supply rather than relying solely on market demand.