> For the complete documentation index, see [llms.txt](https://dubble-dex.gitbook.io/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://dubble-dex.gitbook.io/docs/tokenomics/usddub/elastic-supply.md).

# Elastic Supply

Stable Price \~ 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&amp;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.