Ampleforth in focus, the self adjusting stablecoin

Ampleforth in focus, the self adjusting stablecoin

By Austras | Crypto in focus | 23 Aug 2021


Ampleforth is a interesting approach to solve the problem with crypto's volatility, adjusting the supply based on the coin's current spread to the US-dollar. We explored different cryptos in the past and Maker is the closest solution with the asset being backed by ETH (which can be proven unlike a great deal of stablecoins backed up by actual dollars). This coin also happens to be one of the tokens that Publish0x uses to rewards it's creators. Well, let's take a quick dive into the AMPL ecosystem and see what makes this token tic.

Background

The token was created in 2017 by Evan Kuo & Brandon Illes, Evan was the former CEO of Pythagoras Pizza whilst Brandon used to be a software engineer with Uber. They based and formed their idea around a hypothetical currency called Ducat created by philosposher Fredrich Hayek. The project had several backers before it's initial launch which helped development. 

Since it's launch on the Ethereum mainnet the ecosystem has also added a faucet called geyser, this was meant to promote on-chain liquidity on Uniswap, you can simply grab the tokens to your Ethereum supported wallet and then add it to the pool on Uniswap. This faucet was created in 2020 July and has moved over to it's V2 slighly later on.

If you want to take a look at their SMART FAUCET and make some investment/gains with your AMPL look here

The second improvment to the ecosystem happened on september 15th 2020, when balancer & ampleforth worked together to create their smart pool contract. This contract was created to work around the pool rebalances so that traders would avoid loss if the AMPL token goes through a contraction. (more on this later) A secondery feature to this contract is also the option to take non-collateralized loans.

Network

The token has a sibling/pair which is called FORTH (Ampleforth governance token), FORTH tokens are used for staking and voting on changes in the ecosystem. The AMPL ecosystem is built ontop of the Ethereum blockchain and uses the ERC-20 smart contract to perform changes. 

The token is supported by three smart contracts: the ERC-20 Ampleforth contract, Market-oracle contract & Supply policy contract. These contracts make up the three corner stones of the Ampleforth ecosystem and helps keep it stable while the rest of the crypto market moves through Bull & Bear markets. The ERC-20 contract is the token itself and allows transactions to take place on-chain. The Oracle contract keeps a watch on what the current value of the US dollar is and compares Ampleforth's relation to the price, once per day the Supply policy contract takes this relation into consideration and then adjusts the supply of Ampleforth accordingly to keep the token pegged to the US dollar. It does this by expanding supply, adding tokens, contracting supply, decreasing tokens or Equilibrium, meaning that price is pegged 1:1

Use cases

This token is a stablecoin which means that you can maintain your funds on chain but be sure that the value won't change. The ecosystem is self regulating meaning that your funds will stay the same value (without taking the inflation rate of USD into consideration). They also have their geyser system and growing number of partnerships which helps investors make money from the ecosystem as it grows (and shrinks). 

Ampleforth today

Ampleforth is seeing a growing adoption rate as it offers value based off investors interest in the token and adjusts accodringly. You won't have to worry that the value peg will decrease or be gone as the token adjusts accordingly. DAI will liquidate it's assets to prevent the peg from being removed and Stablecoins that have actual dollars to keep it's peg is hard to prove that the storage of value is safe.

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Austras
Austras

Product manager & tutor, love learning & teaching others. || https://cointr.ee/dorfel


Crypto in focus
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