# Rebound

_The Inflation Controller_\


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Wave’s innovative Rebound feature introduces a smart mechanism to manage protocol inflation and maintain asset value sustainability.

This function makes the protocol **independent from market fluctuations**, ensuring stable emissions and preserving investor confidence.

The protocol continuously distributes rewards via emissions. When token supply rises too aggressively relative to demand, the Rebound function activates — triggering a **governance-driven, distributed deflationary adjustment** to rebalance the supply.

> ℹ️ **In short: the Rebound function is an inflation controller.**

## How does the Rebound work?

The Rebound is **not a recurring function**. It only activates when a significant imbalance is detected in the protocol’s economic ratios.

Wave’s smart contracts **track inflation in real-time**. When they detect that emissions have exceeded a defined threshold, the Rebound logic calculates the necessary adjustment to restore a healthy token-to-liquidity ratio.

This results in an automatic correction — reducing the circulating supply and **re-aligning incentives** across the ecosystem.

Wave’s implementation monitors **WAVE-to-WETH ratios** in the liquidity pools on Uniswap. When the ratio shifts excessively upward, the Rebound system kicks in to reduce excess supply and return to a sustainable equilibrium.

## Benefits

* ♻️ Rebounding increases token scarcity
* 📈 Scarcity improves asset sustainability
* 🔒 Protocol health is reinforced by adaptive monetary logic
