Ampleforth was the latest cryptocurrency to be added as a tipping coin here on Publish0x and that got me super excited because I have been a huge fan of AMPL for a while now. In fact, I have wintered the negative rebases in the past few months and am still extremely optimistic about the future of AMPL.
One thing that I have noticed after watching AMPL for a few months is that nobody seems to be talking about the fact that AMPL is one of the top-performing assets in November.
It actually has a 110% ROI in November alone - meaning if you bought in on the 1st of November, you would have seen a 105% return on your investment on the final day of the month! Now, that is some solid growth that needs to be discussed!
1.3% Daily on Average From Rebases in November 2020
One thing I have been trying to stress in my previous articles is the fact that Ampleforth has two axis of movement - the price (like every other token out there) and the supply.
They call this an MVA - a multi-variable asset. Bitcoin, Ethereum, Ripple, and most of the other coins you know are known as SVAs - single-variable assets.
The chart shows how the total supply for AMPL has changed over the past few months. It went as high as 750 million AMPL during the late-summer months but went on to drop beneath the 200 million level as the winter began.
You can also notice the recent ‘rebound’ as the supply has started to increase again.
The reason this occurs is to do with the mechanics behind the Ampleforth project. If the price is sitting above $1.06, you will witness a positive rebase. This means the total number of AMPL you hold in your wallet will increase. On the other hand, if the price is beneath $0.96, you will experience a negative rebase - a situation in which the total number of AMPL in your wallet will decrease.
This occurs throughout everybody’s wallet as a whole at the same time.
This rebase function is the reason why AMPL has been one of the top-performing tokens in November. Let us take a look at the price for AMPL over the past month;
The red line shows the start of November 2020. The chart shows that, for the majority of the month, AMPL has been well above the $1.06 level that enacts the positive rebase. It has barely been beneath the $0.96 level for the month which meant that there weren’t many negative rebases at all. In fact, there was just one.
Let us now take a look at the rebases over the course of the month;
The graph above shows the rebases that have occurred over the past 30-days. On November 1st, there was no rebase as the price was not above $1.06. From there onward, we can see that AMPL saw positive rebases for the majority of the month. During mid-November, there were a few days where there wasn’t a rebase and one day which saw a -0.81% rebase.
On average, this means that everybody experienced a 1.3% positive daily rebase throughout November if you were holding AMPL.
Remember, this happens every day. So, on average, AMPL holders were seeing their stacks increase by 1.3% per day. That is daily and is compounded also and is what led to an ROI of around 105% if you would have invested on November 1st.
Now, let's do a quick little experiment and conduct some calculations on your ROI if you had invested $100 into AMPL on November 1st. It was trading slightly higher than the $1 target at that time as it was around $1.05.
Investing $100 on that day would have given you around 96 AMPL at the time. By mid-November, your total AMPL stack would have increased to 122 AMPL with a total of 37% ROI. On the 30th, at the end of the month, you would have a total of 142 AMPL with a total return of 105% on your initial investment. This means you would have had around $205 in AMPL.
Here are some screenshots from amplcacl.app - the tool I used to come up with these figures;
This is the magical effect of positive rebases combined with an increasing price.
On Compound Effect
The magic comes from the compound interest you gather by holding onto AMPL. When the total amount of AMPL increases, the next rebase is calculated from your new increased balance - meaning, you get more. If you continue this process over a longer period of time, you will see that your AMPL balance is increasing substantially (provided the price stays above $1.06).
Compound Interest is one of the tools that Warren Buffet credit’s to his great wealth;
Even Albert Einstein understood the magical effect of Compound Interest;
In the early AMPL days, the compound interest was turning smallholders into millionaires in a very short period of time. During July 2020, the average rebase was around 12% - meaning holders were earning 12% on their holdings every day;
Imagine your holdings increasing by 12% every day.
On one day, the rebase value was a whopping 25%.
The Future of AMPL
In conclusion, I am sure that you have gathered that I believe the future of AMPL is extremely bright indeed!
The icing on the cake comes from the fact that Brian Armstrong, CEO of Coinbase, and the Ampleforth co-founder, Brandon Illes, went to the same classes in college so they are very good friends. Armstrong has even invested personally into the project himself and I am sure we can expect a Coinbase listing off of the strength of this relationship alone.
Before I go, I want to warn you that trading AMPL is not just butterflies and flowers. Like any type of investment, it is a double-edged sword. You can lose a lot of money if you time the market wrong and enter the position at a time when the negative rebase period starts.