On Friday, March 5, 2021, the Ampleforth team announced the removal of token upgradeability for its $AMPL token forever. In other words, the contract upgradability was burned (deleted).
This is a really big deal because it's an action that cannot be undone. It prevents anyone from introducing contract upgrades that can disable transfers of $AMPL or tamper with it.
It’s the final step to making $AMPL truly decentralized and censorship-resistant, like Bitcoin. And it just happened today.
What this really means is, if the KuCoin hack or any hack were to happen tomorrow, that would be it. No one could do anything about it or reverse it in any way, not the team, not anyone. $AMPL’s contract upgradeability has officially been burned.
To provide a little background story on the significance of this development, on September 25, 2020, the KuCoin Exchange suffered a $150M hack where a thief got his hands on various tokens, including 14M $AMPL accounting for about 10% of the circulating supply:
At the time, this was sort of detrimental for $AMPL as 10% of the supply was now in the hands of a hacker. This isn’t a small amount and would have haunted the Ampleforth project forever as it was still early days for $AMPL.
Therefore, the Ampleforth devs were forced to make hard decisions and quickly deployed a contract upgrade to the $AMPL token which froze $AMPL transfers from the hacker's address.
Today on the 5th of March 2021, Ampleforth Team has moved back stolen $AMPLs back to the KuCoin exchange to help them refund users who suffered a loss.
This action goes against the important fundamentals of decentralization and censorship-resistance, but the team made the decision with decentralization in the long-term in mind.
As stated by an Ampleforth fan in response to a lot of questions questioning the integrity of Ampleforth:
Overall, I believe that Ampleforth did the right thing for the project back then and is doing the right for the project right now.
Why Token Upgradeability Existed in The First Place?
As mentioned above, there were many people who were surprised that Ampleforth froze the stolen funds, or even that they had the ability to freeze funds. But the truth is, they were totally open with this ability and stated it BEFORE $AMPL even started to trade!
In this blog post published on June 10, 2019, it’s clearly stated that the $AMPL token and supply policy were upgradeable via OpenZeppelin’s AdminUpgradeabilityProxy to allow for further development, integrations, and security fixes for any potential bugs not found in its three independent security audits.
Back them Brandon Iles, the Co-Founder of Ampleforth had this to say on $AMPL’s token upgradeability:
“We felt that upgradeability is something we needed to include in the beginning, given how quickly the crypto landscape changes. If it were ever possible, and safe to do so, we’d also prefer to remove this mechanism. However, we believe it’s unrealistic to think we can design a system today that will last our lifetimes without needing any changes ever.”
In other words, the team is now confident that $AMPL is ready to thrive on its own and it will stand the test of time, exactly the way it is. If that’s not bullish for the future of $AMPL, I don’t know what is.
What Deleting Upgradeability Means for $AMPL
The removal of $AMPL’s token upgradeability means that $AMPL is now completely censorship-resistant and sufficiently decentralized like $BTC or $ETH. It means that $AMPL’s tokens cannot be altered with - stopped, censored, or frozen even by the team.
It also means that $AMPL has been sufficiently battle-tested and is ready to take a step towards full maturity. That from now on, $AMPL will be on its own out there when it comes to how it’s used and by whom.
To put it simply, it means that $AMPL is now truly decentralized and censorship-resistant, just like Bitcoin.