Regarding "redistribution rewards", I'm referring to the token reward mechanics of deflationary coins such as Safemoon. This mechanism seems to have originated from an ERC-20 token called RFI (reflect.finance), so I will be referencing this token from now.
On reflect.finance's site, they claim:
RFI works by applying a 1% fee to each transaction and instantly splitting that fee among all holders of the token.
My first thought was, do they make a send to every address per transaction made? Obviously not, that'd be way too expensive of an operation to perform on a scale like that.
After further research, I found an interesting snippet on one of their blog posts:
https://reflectnetwork.org/posts/what-is-reflect-finance-rfi-duplicate-1
…Due to the token reward mechanics and the transactionless nature…
They described this mechanism as "transactionless", so that caused me to be even more intrigued. Despite having minimal knowledge on how smart contracts work, I decided to take a look at their smart contract code on github, which is located here:
https://github.com/reflectfinance/reflect-contracts/blob/main/contracts/REFLECT.sol
Due to my lack of knowledge in this domain, I managed to read through that file a dozen times and still have no idea how that feature actually works. I noticed some function names that mention "Reflection" and I assume that is how they refer to the redistribution mechanics, but that's about as far as I can get in understanding this.
Can anyone explain to me in layman's terms how this feature works?
Best Answer
Possibly someone familiar with it or able to study it more will chime in with a more detailed explanation.
They are mathematically adjusting account balances on the fly, as needed. For example, line 56 kicks off a computation instead of just returning a number lookup:
As one follows the chain of internal function calls, supply is also adjusted. This is following a style Nick Johnson called "Amortizing Work". Given the rules of the system, it's not important to do batch-like work if the result of such work can be computed when it's needed.
This is from 2017, so the syntax is outdated but the description of the pattern will help you understand this contract: https://weka.medium.com/dividend-bearing-tokens-on-ethereum-42d01c710657
As a PSA, it would be interesting to investigate the
forloop near 239. "Unbounded"forloops are an anti-pattern, so I'm curious about the maximum length of the array, hopefully short.Hope it helps.