> For the complete documentation index, see [llms.txt](https://docs.brila.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.brila.finance/brila-dat/explanation/elastic-supply.md).

# Elastic supply

This page explains what it *means* to hold a rebasing token, so the balance changes you see don't surprise you. For the exact formulas and bounds, see the [token reference](/brila-dat/reference/contracts.md); for *why* the protocol rebases at all, see [The peg](/brila-dat/explanation/the-peg.md).

## Your balance is a view, not a ledger entry

Most ERC-20s store your displayed balance directly. DAT instead stores **internal units** at `1e24` precision. Your internal balance changes when DAT is transferred or minted to or from you. Your visible ERC-20 balance is computed from that amount and a global scaling factor:

```
balanceOf(you) = balanceOfInternal(you) × brilaDatScalingFactor / 1e24
```

At genesis the scaling factor is `1e18`. A rebase multiplies it, changing `balanceOf` for every holder at once without a transfer or a change to their internal balance.

## What a rebase changes — and what it doesn't

A scaling-factor change is **proportional**: it moves every existing balance by the same ratio. Negative rebases only change the scaling factor. On a positive rebase, the rebaser first calculates the damped rebase delta, then diverts `rebaseMintPerc` of that delta (10% by default) to a separate treasury mint. The remaining delta changes the scaling factor. That mint increases `initSupply` and therefore dilutes existing holders' percentage ownership.

* **Positive rebase** (price above peg): the scaling factor goes up; your balance goes up.
* **Negative rebase** (price below peg): the scaling factor goes down; your balance goes down.

A positive rebase is not guaranteed profit, and a negative rebase is not by itself a targeted loss. The mechanism changes token quantity to create market pressure toward the peg; it does not guarantee the resulting market price or your USD value. Farm rewards can increase your internal balance. The [treasury harvest](/brila-dat/explanation/the-peg.md#the-dat-mechanism) accrues assets to the protocol treasury, not directly to individual holders.

## Two balances you can read

| Reading                                   | Function                 | Changes on a rebase?                   |
| ----------------------------------------- | ------------------------ | -------------------------------------- |
| Display balance (what wallets show)       | `balanceOf(you)`         | **Yes**, when the scaling factor moves |
| Internal balance (rebase-invariant units) | `balanceOfInternal(you)` | **No**                                 |

Internal units isolate transfers and rewards from scaling-factor changes. They are not, alone, your percentage ownership: positive-rebase treasury mints increase total internal supply (`initSupply`). For an approximate ownership fraction, compare `balanceOfInternal(you)` with `initSupply`. See [Read your rebasing balance](/brila-dat/how-to/read-your-rebasing-balance.md).

## Bounds

Rebases cannot run away. The scaling factor is capped above (`maxScalingFactor()`, which shrinks as supply grows) and floored below (`MIN_SCALING_FACTOR = 1e15`, i.e. 0.001×). A single rebase is also dampened — see `rebaseLag` in [The peg](/brila-dat/explanation/the-peg.md#why-rebases-are-gradual).