The pioneer of elastic supply assets, $AMPL, is on the road to getting listed on Aave and when it finally does, we’ll all be saying “in retrospect, it was inevitable.” Today, we’ll explore that journey and discuss why is it groundbreaking for DeFi.
How it started
It all started with a new roadmap outline on August 19, 2020, which builds the case for "Elastic Finance," the next generation of financial platforms that can make use of unique assets like $AMPL:
Shortly after, Brandon Iles, Co-Founder of Ampleforth, described in detail the case for $AMPL lending. He explained how $AMPL exhibits unique properties that make it an attractive asset for borrowing and lending. Driving home the fact that elastic assets like $AMPL enable borrowers and lenders to take advantage of safe debt-denomination and collateral diversification.
Then, on October 14, 2020, a proposal for $AMPL on Aave was made by Brandon himself and was met with much excitement.
The proposal stated:
“I’d like to make a proposal for Aave to support $AMPL as a collateral asset and currency. We think being able to lend and borrow $AMPL on Aave would open up new and unique trading strategies not possible before in traditional finance.”
Then, just a month and a half later on December 9, 2020, the characteristics of $AMPL on Aave (aAMPL) were fully laid out on GitHub with a total of 40 commits.
Taking that all in, do you understand now why I say $AMPL on AAVE is Inevitable?
How's it going
$AMPL Co-Founder Brandon Iles and the Founder and CEO of $AAVE Stani Kulechov
More recently now, on February 15, 2021, Brandon and prominent names in the DeFi space including Stani Kulechov, the Founder and CEO of Aave were talking about “DeFi in 2021 and beyond” at the EthereumDenver Conference:
Per the talk, Brandon shared what he finds most exciting in DeFi, stating:
“Right now, as a developer, it’s really easy to build something that you already see exists. So a lot of finance in DeFi is sort of a recreation of what we’ve already seen in centralized finance.”
“But with this new technology, we have a new set of tools that allows us to potentially explore different solutions to our problems”
“I think it’s going to be really exciting to see how people come up with new ways of structuring these systems and new ways of organizing that we haven’t yet seen before on centralized finance.”
Lending & borrowing $AMPL is inevitable
Based on everything I’ve presented to you thus far, it’s clear that everything that needs to be done for $AMPL to get listed on Aave has already been carefully planned ahead of time. Therefore, it’s not a matter of if Aave lists $AMPL but rather when Aave lists $AMPL.
Why does it take so long?
Remember what Brandon said in the DeFi talk at the EthereumDenver conference?
He proclaimed that DeFi today is mostly a recreation of what we’ve already seen in centralized finance and that he’s most excited about restructuring these systems to build something we haven’t yet seen before on centralized finance.
That’s why $AMPL on Aave is taking so long in comparison to other crypto assets on Aave. Brandon and the Ampleforth team are doing something completely new here with $AMPL being an uncollateralized financial primitive with an elastic supply that adjusts each day according to demand in the marketplace.
Therefore, the $aAMPL token on Aave requires new code that’s not used for regular aTokens. It needs to adhere to $AMPL’s changes in supply and perform additional book-keeping to keep track of things.
For instance, the $aAMPL token implements custom math to handle elastic aToken balances among other things such as the implementation of a custom aToken, StableDebtToken, and VariableDebtToken for $AMPL.
Moreover, not only does the $aAMPL token implementation require new code, but also audits take a long time; especially when the audits are for something completely new like $aAMPL and when we’re in a DeFi boom.
Also, regarding what’s said above, Brandon recently addressed these points in the Ampleforth Discord channel:
Why $AMPL Lending is a Big Deal?
I don’t know if you can tell from my writing, but I’m super excited about $AMPL lending. It really is a big deal, now let me tell you why.
$AMPL is the first rebasing currency of DeFi and a true monetary innovation and building block for the future of finance. Using $AMPL for lending and borrowing is something entirely new for DeFi and is something we haven’t yet seen before on centralized finance.
$AMPL is an asset with absolutely no collateral and is non-dilutive like Bitcoin, but has a long-term unit of account that unlocks safe denomination of debt. This makes it a low-correlated collateral asset that’s resistant to black swan price shocks and is thus a better, safer, more resilient collateral asset for lending and borrowing.
To be honest, I could go on for hours explaining why $AMPL lending is a big deal but I’m going to save this for my next article where I’ll explain in detail the benefits of $AMPL lending with case studies and scenarios.
You won’t want to miss it. Cheers guys!