I have been fielding questions from concerned wAMPLers in the community, so I'll forward a note that was sent out to them earlier today.
Volatility is a feature; not a bug. Don’t worry...remember Newton's 3rd Law: for every Action, there is an equal & opposite Re-Action 😎
Recall, AMPL’s value proposition is the Rebase (number of AMPLs; not so much the Market Capitalization – number of AMPLs x Price $USD). EDIT - both are important for Value Generation; I.e. if Price = 0, then everything =0. But it is easier to contain Supply Volatility than Price Volatility, and AMPL-SPOT System takes this to a whole new level to output SPOT. SPOT does not have Price OR Supply Volatility!
So if you are concerned, we can always invert our wAMPL into AMPL to resolve our Uncertainties.
E.g., if you have 10,000 wAMPL, then today at this time wAMPL Price = $5.76. The Price of AMPL right now is $0.97 --> 10,000 AMPL x $5.76 = $57,600 --> $57,600 ÷ $0.97 = 59,381.4433 AMPL in possession. In contrast last week when the Price of wAMPL was $7.40 on 1/18/23 at 5 PM, the total value of 10k wAMPL in possession = 10,000 wAMPL x $7.40 = $74,000 USD. On 1/18/23 at 5 PM, the Price of AMPL was $1.23. $74,000 ÷ $1.23 = 60,162.6016 AMPL were held in possession.
So, really the Δ% in number of AMPLs is minimal:
- We went from 60,162 AMPLs --> 59,381 AMPLs = n Δ%
- Mathematically --> (60,162/60,162 AMPLs) = 1 = 100%; (59,381 ÷ 60,162 AMPLs) = 0.987 = 98.7%
- 100 % - 98.7% = 1.3 Δ% decrease in the number of AMPLs in possession
Wow - while Price of wAMPL (which is an index of the broader AMPL Market Capitalization: # of AMPL x $USD Price of AMPL) has dropped by 22.7% over the past 7 days, the # (Quantity) of AMPLs in circulation has dropped only by 1.3% over 7 days!
Such conversion of Price Volatility into Supply/Quantity/# Volatility is one of the core properties of AMPL that make it one of the best building blocks/money legos in Decentralized Finance. The combination of Rebase with Tranche is SPOT - it has not deviated much from its Price Target.
What is the Price Target of SPOT? The same as AMPL's. AMPL always returns to its Price target of 2019 CPI Adjusted USD ($1.14 today). You can track this and related information at https://www.ampleforth.org/dashboard/
SPOT Geysers go live today! Cheers
