🤝Rebase

Rebases for veTOKEN holders has been around since Solidly v1, so...

Why the rebase model?

Rebasing in this context is primarily a dilution protection mechanism to fight a core problem seen across the DeFi landscape - token infaltion as incentives. Emissions increase supply and lower the % of tokens supply held by any given user as a total of the overall supply over time. This means, if a user is to buy tokens and hold them, or in this case lock them, as emissions increase the supply that token holder will hold reduces against the total supply as a % over time.

Rebases are also inherently inflationary. However, in the Solidly design mechanics - the inflation is only adding to locked supply thus reducing the inflationary effect seen in other rebase models such as OHM v1.

Balancing the protective nature of the rebase without it leading to 'the OG effect' where early adoptors are given highly advantageous positions and raising the barrier of entry ror new users is important. So Stratum has proposed two mechanisms as 'improvements' to the model.

Improvements

First and foremost, the inflation target on Stratum is ~20% annually. This is much lower than other Solidly forks like Velodrome, Ramses and especially Solidly itself. This is not a slight against any of those projects as they've been highly successful, it just represents a change to the mechanics that balances against the locked rewards design.

A 20% rebase gives a level of dilution protection to veSTRAT lockers while also incentivising additional locking to maintain their position against the overall supply percentage. Higher rebases like Solidly v1 and some other prominent forks mean users who buy early and buy big will always monopolize the supply, causing huge imbalances and centralizion of tokens.

As a protocol and veSTRAT holder, your 20% rebase can be supplemented using the Meta Bribes feature, which can significantly increase your rebase and dilution protection and reward you for contributing to the effectiveness of the protocol mechanics. This is the second and most significant feature Stratum has added to the rebase model to strike a fair balance for users and partners alike.

See Meta Bribes to read more