Xenophon Docs
What is Rebase
Rebase is a mechanism by which your staking XPH balance is automatically increased. When the Protocol mints new XPH, a large portion of it would flow to the stakers. Since the stakers can only view the staking XPH balance but not the XPH generated, the Protocol uses the Rebase mechanism to increase the staking XPH balance, so that 1 XPH staked is always redeemable for 1 XPH.
The Rebase sXPH is used to correct the imbalance between the deposited XPH and sXPH. sXPH will not be required to be returned when the reserve vault deposits profits, which would create an imbalance. This Rebase keeps the amount of sXPH in balance to ensure that one sXPH equals one staking XPH.
rebase=1−(xphDesposits/sXPHOUTStanding)rebase = 1 - (xphDesposits / sXPHOUTStanding)
Example: There is 500k XPH staking and 500k sXPH outstanding. The agreement generates a $5,000 profit that day to mint and back 5,000 XPH. It sends these XPH to the Staking Contract; now there is 505k XPH staking and 500k sXPH outstanding. sXPH supply needs to increase by 5k, or 1%, to return to balance. Therefore, sXPH is re-adjusted upwards by 1%.
The only thing to note is that rebase will be retroactive, and the end of epoch 100 will trigger the recalculation of epoch 99's profit. This delay will cause some users to cancel the staking at the end of epoch 100, so the profit due to epoch 99 will be lost, so it is recommended not to cancel frequently after staking.
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