Today, we had our rebase() and the price exactly didn’t go to the peg price of 1.10 as people can see, and this is a feature, not a ‘bug’. Before any rebase function, the protocols analyze two variables, namely-
- target price,
- stream price
Target price is (Chianlink’s_Fully_Diluted_Mcap)*0.¹¹⁰
Stream price is the average price of the past 24 hours, not the price that it traded at on the very last moment that the rebase method was called. This is performed through leveraging uniswap’s TWAP oracle.
This was done to stabilize the growth and depreciation of the protocol, is acting as the neutralizer towards the counter-cyclical pressure that gets originated during the rebase phases.
Today the price reached 0.62 and 1.10 after the rebase because the system noted that the stream price to be 0.82 and not 0.42( which was the price at which the system traded at during the rebase call). This is a feature, unique to Linkbased. Today our rebase call made the supply go from ~14mm -> ~9mm, and reach a price of 0.62. If it were not built like this, during price depression, like the one we were at today, protocol participants would have seen over -48% reduction in their supply and reach a price of 1.10.
Linkbased has two measures in place to stop and disincentivize destructive participant behavior,
a. 3% tax in any network movement that goes towards the Valhalla participants.
b. 24 avg price as our stream price.
During positive and negative rebase, the system stays and maintains just on purpose, returning to the peg price either by increasing or decreasing the supply. In a statically priced network, everyone’s value stays the same. There is no free lunch.
Our protocol works, as intended, bug-free, and stable as of this moment.
Today we made an off-chain vote, about canceling the rebase function call, for today.
We got the consensus, our community wanted to cancel the to rebase call today, to equate the previous day’s 2 synchronous rebase calls.
Unfortunately, we missed out on shutting down our guard bot first during shutting down the system whose main purpose is to automatically call the rebase function.
This caused the system to carry out the rebase, as it usually would have.
Where did my ‘money’ go?
After the rebase the price of LBD increased as much as that amount as the LinkBased supply that got reduced, no one lost any value. This is rebase 101.
140K LBD has been accumulated as of now waiting to be sent as rewards to our Valhalla participants next week. Glory awaits in Valhalla.
Read more about LinkBased:
**Disclaimer: This project is not affiliated with the official Chainlink project by any means***