# What is Rebase function?
**Understanding APY and the Power of RAO Protocol**\
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**APY (Annual Percentage Yield)** represents the total real rate of return on your investment over one year, accounting for the effect of compounding interest. Our automated RAO protocol leverages a sophisticated **Rebase function** to deliver a **4%** reflection from every network transaction directly to your wallet.\
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The mechanism is seamless: rewards are generated by the ongoing transactional activity within the network and distributed to all holders. This creates a continuous stream of income without the need for manual intervention.\
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**The Compounding Advantage:**\
The most compelling feature of our protocol is the exponential growth of your balance. We distribute a **4%** commission from every network trade, allowing your assets to compound in real-time.
* **Example:** If you start with **$100** worth of **$RAO** tokens on Day 1, the power of our compounding protocol can grow your balance to approximately **$1,460.04** over 12 months.
Experience the world’s most efficient passive income engine, where the **RAO Protocol** ensures your wealth scales with every second of market activity.
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