# Elastic Supply

<figure><img src="https://2241042299-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F2pRwNytmBI10ALS6sEK0%2Fuploads%2FcUscFftb87FFITOYCaGZ%2FUnderstanding%20the%20Elastic%20Supply%20Mechanism%20of%20the%20DUB%20Protocol.png?alt=media&#x26;token=e18642b0-2fe5-4ccb-9110-b9c33b6ff77d" alt=""><figcaption></figcaption></figure>

$DUB operates on a unique mechanism compared to other tokens in the decentralized finance (DeFi) ecosystem. While most tokens' prices increase as the assets under management grow, $DUB maintains a constant value of approximately $1. This is achieved through constant adjustment of the money supply by smart contracts, which automatically update the balance of every $DUB holder's wallet in proportion to their holdings, reflecting the yield generated by the protocol.

Some key features of this mechanism are:

1. $DUB is 100% backed by other stablecoins, making it less challenging to maintain the peg to the dollar. The ease of minting and redeeming $DUB allows arbitrageurs to ensure the peg remains stable.
2. $DUB rebasing only increases the token supply, as the amount of $DUB minted is tied to the realized gains earned by the underlying strategies. Therefore, while the $DUB balance of token holders will never decrease, its value could potentially drop if there is a failure in the underlying systems.
3. The monetary supply of $DUB is updated in real-time, triggered by rebases that occur every 24 hours.

In summary, $DUB is a stablecoin that utilizes a unique rebasing mechanism to maintain its peg to the dollar, constantly adjusting its money supply to reflect the yield generated by the protocol. This innovative approach has resulted in a stablecoin that is highly reliable, making it a preferred choice for investors in the DeFi space.


---

# Agent Instructions: Querying This Documentation

If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter:

```
GET https://dubble-dex.gitbook.io/docs/tokenomics/usddub/elastic-supply.md?ask=<question>
```

The question should be specific, self-contained, and written in natural language.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.