Is it possible to a token to adjust its own total supply so it can keep your price more stable?

I mean when a token "realizes" it is too cheap it burns some amount and when is too expensive it mint some amount.

I know a token ( a contract ) can interact with the Liquidity Pool so it can check its price (at least in theory).

is it worth doing this? it will make any real difference?

1 Answer 1


Depending on the token and its liquidity, the problem you may face is that you can't check all the places it's being traded at. Even if you check Uniswap, someone can just create another pool in another decentralized exchange - or even in Uniswap.

But burning and minting will not affect the price directly either. In the long run they should affect the price, but not immediately. So this also depends on the token's liquidity - if it's not being traded much, the effect will be very slow.

Otherwise, I guess you can try to check some pool about their reserves and mint/burn accordingly. Just be aware of various attack vectors this introduces: for example flash loans may skew the balance momentarily.

  • 1
    Enlightening. It makes sense. I hadn't thought about it. Thanks.
    – Magno C
    Jun 11, 2021 at 16:27
  • So how the people around created tokens they say "stable" or "FIAT-equivalent" like USDT and so?
    – Magno C
    Jun 11, 2021 at 16:30
  • Oh that's a whole other topic. Various approaches, for example algorithmic or asset-backed. Please post a new question or search for existing questions about the topic (there are quite many probably) Jun 11, 2021 at 16:33
  • Uh! Too complex. Lets left it quiet. Many thanks!!
    – Magno C
    Jun 11, 2021 at 16:34

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service and acknowledge you have read our privacy policy.

Not the answer you're looking for? Browse other questions tagged or ask your own question.