I have been looking to pick up some bags of a few “rebase” currencies such as $AMPL and $BASED but as I was adding into my assets in order to buy I thought to myself, “How do rebases work with ptokens?”. If I buy and hold on the normal ethereum network then if there is a rebase of the currency I would either gain or lose coins based on the current price and marketcap. But with incognito it is a different network and receiving addresses are only good for an hour or so. So my question is how would a rebase event work if I hold the ptoken version of the currency? Hopefully somebody can clarify on this.
I must admit i had to look into what AMPL rebase is. Thats a very interesting question. Im not 100% about how this rebase feature on the AMPL protocol would interact with Incognito. Let me ask and get you a proper answer. Thanks for bringing this up.
As both $AMPL and $BASED are ERC-20 tokens, they are technically compatible with Incognito.
I think there is a very serious issue, however, that pAMPL and pBASED will only be pegged to $AMPL and $BASED at the time of shielding. Any subsequent rebase will only be reflected in the Incognito vault holding those tokens.
Consider this simple theoretical example.
- Alice shields 10 $AMPL and recieves 10 pAMPL.
- The Incognito vault on Ethereum holds 10 $AMPL.
- Bob shields 5 $AMPL and receives 5 pAMPL.
- The Incognito vault on Ethereum holds 15 $AMPL.
- The $AMPL price drops 50%. The overall global supply is adjusted by -50%, including all wallet balances, per the Ampleforth tokenomics.
- The Incognito vault on Ethereum is rebased by the Ampleforth smart contract to hold 7.5 $AMPL.
- $AMPL held by the Incognito vault is no longer pegged 1:1 with pAMPL.
- Alice and Bob attempt to withdraw their collective 15 pAMPL to $AMPL.
- Chaos ensues. Human sacrifice, dogs and cats living together … mass hysteria!
This is exactly what I’m talking about. Can this be resolved? Is it even possible? I think there should be some sort of warning to users about this scenario.
There would need to be changes made to the Incognito chain code to accomodate these kind of rebases. I don’t think that will be trivial.
In the interim, it would probably be a good idea to block $AMPL, $BASED and any other rebase-type assets from being shielded on Incognito until a proper solution can be implemented.
Talked to the team, so, as the bridge is trustless, anyone can transfer erc20 tokens across by interacting directly with the chain. So anyone can add any erc-20 with a rebase feature.
However, we definitely recommend not doing so as incognito’s minting/burning process does not play well with rebase mechanisms. so going forward, to protect user funds, these coins will not appear in the app at all.
As mike pointed out some changes need to be done with the mint/burn process to accomodate, and currently it is somewhat trivial.
Thats also a tricky one since new tokens with rebase are popping up quite frequently. If theres any other rebase-type assets that are erc-20 that you know of, could you please point those out for us?
Good to hear that the team is looking out for the users. I’m glad I thought about this and brought it to the attention of the team
Im glad you did as well.
Our recomendation is to not hold these assets on incognito (at least for now) until there is something proper in place.
$RMPL - https://github.com/rmpldefiteam/rmpl
$YAM - https://yam.finance/
$REB - https://rebased.fi/
$DEBASE - https://etherscan.io/token/0xe20303b4f80ef868f653d1fed3f797b5116c3a2e
$ESD - https://emptyset.finance/#/
$COIL - https://coilcrypto.com/rebase.php
$ADEX - https://help.adex.network/hc/en-us/articles/360017158819-Understanding-The-ADX-Loyalty-Pool-and-Elastic-Issuance
$xETH - https://www.xeth.finance/
$AMPLG - https://amplegoldcommunity.tech/
$GRPL - https://grpl.finance/
$AURIC - https://auric.network/
$TRUSD - https://unitedtrust.co/
$OUSD - https://www.ousd.com/
$AAPL - https://etherscan.io/token/0x4aa5bb4b3ba12633b36d677da5c13766d9024f2f
$SKALE - https://skale.network/
TRON - TRC-20
$CNS - https://www.joincentric.com/
Wow @Mike_Wagner. Thank you so much for the info. This helps alot
What is the “Native” category representative of?
Projects using their own blockchain.
$SORA v1 uses Hyperledger Iroha and will switch to Substrate on Polkadot for SORA v2.
$CELO ia a fork of Ethereum.
The solution which is applied to DGX token can be applied to these tokens. Currently, DGX cannot be shielded or unshielded.