At the end of June, I posted a guide on how to provide liquidity for Ampleforth (AMPL) on Uniswap and make some money from Ampleforth’s Geyser program.
It worked out quite well for me. I ended it up with $373.6 worth of AMPLs to be exact. Little I knew I decided to hold it for a while.
I benefited from being one of the early birds and the influencing factors worked in my favor.
The amount of AMPLs I ended up with was 194.6 at that time
Now 20 days have passed and - wait for it - I have turned that $373 into ~$7563!
Edit: I just noticed the amount in etherscan is lower by around $75 due to $AMPLs price fluctuations. Proof: Etherscan
Note: This is a chart that shows the supply change over time. It's not the price chart.
Yup, you read that right. Sure, I got in at the right time and the price had its price ups and downs (as you'll see on price chart below) , which affects your returns like any other asset. But you can make this kind of profit too - and that’s because of Ampleforth’s very unique and very awesome economic design.
With Ampleforth it’s possible to buy high, sell low, and still make money
What’s so unique about Ampleforth? Well, it has what is called an “elastic supply”, which eliminates some of the problems you have with an asset like Bitcoin.
Here’s the clearest way to understand it: when demand goes up, supply goes up; when demand goes down, supply goes down.
This way, the price equilibrium is achieved and your ownership of the network is never diluted as your holdings always increase or decrease proportionally to demand. Your AMPL balance may change on your wallet, but your % ownership of the network never does.
You're probably wondering how the rebasing itself works. Let's dig into it pretty quick:
The elastic supply is determined by the protocol’s rebase mechanism, with supplies adjusting every day at 10 PM EST.
When the oracle data is higher than $1.06, all wallets on the network have their supplies increased. Similarly, when it drops below the lower band of $0.96, the supply decreases. If it stays in the range of $0.96 - $1.06, the rebase does nothing. But this is where the magic happens.
You can see the details on when exactly the next rebase is going to happen along with the current oracle rate (price). https://www.ampleforth.org/dashboard/
The price may remain the same for some days, but if the oracle price stays above $1.06, the supply will continue to expand - meaning you will have more AMPL after the rebase. If you bought today 100 AMPL and the supply increases tomorrow by 5%, you will see a 5% increase in your holdings which is 105 AMPL.
And yes, it automatically changes in your wallet.
This is the supply based trading that is a big part of the lucrative multi variable asset nature of AMPL (discussed later). With this, you can make money through supply increases, in addition to just price increases.
As you can see, AMPL's price does fluctuate (left side), but since oracle price keeps above $1.06 - the total supply keeps expanding. Source.
Ampleforth Pioneers a New DeFi Asset Class: MVA
If the numbers haven’t convinced you so far, here’s another reason why Ampleforth holds so much potential.
It’s a new kind of asset - a Multi Variable Asset (MVA). The name, as you might have guessed, suggests that there are multiple factors involved in determining the asset’s total value.
In a Single Variable Asset, the only factor would have been price, just like Bitcoin.
In an MVA like Ampleforth, price and supply should be considered by investors as these both are changing depending no the market conditions.
This helps in more accurately assessing the value of an asset and also distinguishes it from something like Bitcoin, for which price is the only variable that really determines its value.
AMPL Tokens aims to remove correlation with other digital assets and the MVA nature is one way that encourages different behavior. The supply factor adds a second layer to asset value which investors have to take under consideration. By behaving differently from other asset classes, it incentivizes new investment opportunities. This concept is explained well here.
Is it Too Late To Buy $AMPL?
Remember that this is not financial advice - you have to be aware there is a certain amount of risk involved. Never use capital that you can’t afford to lose. I tried this to see how it goes, and fortunately, it worked out well for me.
This chart might look like it’s too good to be true, but hey, this is what all solid projects have experienced in their early days. When they begin to be recognized as breakthrough protocols/platforms, the price and buzz around it skyrocket. Just look at oracle provider Chainlink (LINK) or Compound Finance (COMP).
And I sincerely believed that Ampleforth is a breakthrough development like those two projects. Ampleforth launched only very recently, but in that time it has proven its legitimacy with tangible results.
It has about $280 million in market cap at this time, but it wouldn’t surprise me (in fact, I wager it will) if it grows exponentially this year. With the way DeFi is growing and more assets are coming in, I’m sure savvy investors will single out AMPL as a good hedge and source for their staking income.