ABI, sABI and gABI: What are they?

With the imminent launch of the Abachi staking protocol, we have seen an increase in questions regarding certain aspects of our project. One that comes up frequently is the difference between ABI, sABI, and gABI. The differences can be explained as follows:

  • ABI = ‘normal’ ABI. This is the ‘original’ native token which can be traded on the market and used as a utility token within Abachi Core Services.
  • sABI = ‘staked’ ABI. This is the form that ABI takes once you stake it within the protocol; stake ABI to get sABI in return.
  • gABI = ‘governance’ ABI, but can also be described as a ‘wrapped’ version of the staked ABI token.

The difference between sABI and gABI is the most difficult for newer investors to grasp, and so here we will try to make the features and benefits of each as clear as possible.

More on sABI:

When staked within the Abachi protocol, ABI becomes sABI and gains the ability to earn rewards with each rebase. A ‘rebase’ will occur approximately every 8 hours. At the end of each 8 hour period, the protocol analyzes the amount of sABI that you have staked, and rewards you with more sABI tokens which are automatically added to your existing sABI balance. The amount of reward tokens that you receive is based upon the current APY% of the protocol and your sABI total.

More on gABI:

The gABI token functions quite differently from sABI. Instead of needing to be staked within the protocol, gABI grows along with the index.

But what is the ‘index’? Well, the index is a number that represents the amount of ABI that you would have earned if you had staked a single ABI from ‘day-one’ of the staking protocol. With each passing rebase the index increases as follows:

  • For example, the index will start at 1.0 on ‘day-one’ of staking.
  • Let’s say that for discussion our initial rewards rate is fixed at 1% per rebase.
    • After the first rebase, the index would be 1.01, representing the 1% that was gained from the first rebase.
    • During the next rebase, the index would increase to 1.0201 and so on.
  • The index will continue to grow exactly in proportion to the rewards percentage of every rebase.
  • The current index will always be prominently published on the Abachi staking page.

Now with the functions of the index in mind, we can move on to the mechanics of the gABI token. Essentially, gABI benefits from rebases without being staked directly into the protocol. The fact that gABI does not need to be staked offers a few key benefits:

  1. gABI allows for on-chain governance while sABI does not.
  2. gABI has the ability to move cross-chain.
  3. gABI may have access to more liquidity across various chains.

How is the value of your gABI calculated? The below formula guides gABI price action. Market prices fluctuate, but arbitrage opportunities should always drive gABI price back to this equation:

Value of gABI = market price of ABI *the index

For example, if ABI has market price of $100 and the current index is 4.0 then gABI price would be $400 (price ABI * index)

If you have 1 gABI in your wallet, you will always have exactly 1 gABI but the value of the single gABI changes as rebases occur every day.

Please also reference the infographic below for additional clarity.

r/Abachi - Lead-up to Staking - Lesson 2: What is a gABI?

The choice to select sABI or gABI is based upon the needs and preferences of each investor. Both tokens will be rewarded with exactly the same APY, however, their use-case varies slightly. While gABI allows for governance on-chain and increased flexibility, many users prefer to watch the count of their sABI grow with each passing rebase.

Any way you slice it, ABI plus staking rewards is a win-win. Happy rebasing, and see you in the next Abachi Academy tutorial! For further review visit our previous lesson.