# What is Rebase Token

A Rebase Token is one whose circulating supply expands or contracts due to changes in the token price. This increase or decrease in supply works with a mechanism called rebasing. When a rebase occurs, the supply of the token is increased or decreased algorithmically, based on the current price of each token.

BUIDL's BAP takes advantage of a positive rebase formula which increases the token supply allowing $BUIDL holders to keep growing their tokens, like in a traditional staking protocol. However our use of a rebasing token eliminates the need to approve and traditionally stake your tokens.

**The positive rebase is backed by an RFV which is ensured and supported by the token’s buy and sell fees.**
