Hey guys :) I’m back with another comprehensive Q&A piece, this time for one of the most interesting projects in Ethereum DeFi – Ampleforth (AMPL).
Ampleforth is a relatively new and unknown DeFi project with some very interesting, complex, and lucrative token economics. It’s unlike any other cryptocurrency ever created and it’s largely uncorrelated to both traditional and crypto markets.
Now, before we dive in, the following piece is similar to my latest articles on Balancer (BAL), Compound (COMP), and Ren (REN), so if you haven’t already seen those, be sure to check them out as well.
Hope you enjoy!
The list of Q&A is kind of long so first comes the list of questions that I have prepared the answers to:
- What is Ampleforth?
- Who and When Created Ampleforth?
- What is the purpose of $AMPL Tokens?
- What Exactly is an Elastic Supply?
- What is a Daily Rebase?
- Who are the key people behind Ampleforth?
- What is Ampleforth Geyser?
- Where to Store Ampleforth’s $AMPL?
- Where to Buy & Sell Ampleforth’s AMPL?
1. What is Ampleforth?
Ampleforth website homepage
Ampleforth – Amples (AMPL) – is a revolutionary new cryptocurrency, like Bitcoin, but with a twist; supply changes daily.
With this transformative difference, the Ampleforth project sets out to redefine decentralized money with its AMPL cryptocurrency – which is an adaptive money built on sound economics with near-perfect supply elasticity.
To put it more simply, Ampleforth’s Ample (AMPL) token is a decentralized “currency/money” type of cryptocurrency, like Bitcoin, but with near-perfect supply elasticity, like fiat. The Ampleforth protocol automatically adjusts the supply of AMPL in response to demand on a daily basis.
Must-Know Ampleforth Features
AMPL has Elastic Supply
The elastic supply aspect is what makes Ampleforth so different from other types of cryptocurrencies as the number of AMPL you own can change each day. It's governed by a rebase mechanism, which I'll cover later in the article.
AMPL is Non-Dilutive
Though AMPL has an elastic supply (a forever increasing/decreasing supply), the supply adjustments are applied universally and proportionally across every wallet’s balance. In other words, your percent ownership of the network always remains fixed, even though your AMPL balance changes frequently.
AMPL is Uncorrelated
Today’s cryptocurrencies are highly correlated. If Bitcoin experiences major volatility to the upside or downside, every other cryptocurrency’s price follows. And even Bitcoin is correlated to traditional markets. When the markets are trending, whether it's up or down, so is Bitcoin.
Ampleforth on the other hand introduces unique incentives through AMPL’s supply elasticity which enables it to decouple from Bitcoin's and the traditional market’s price patterns.
AMPL Solves the Supply Inelasticity Problem
Fixed supply cryptocurrencies are vulnerable to sudden shocks in demand and cannot reliably be used to denominate complex contracts. As a result, sophisticated economies cannot really be built upon them.
AMPL’s elastic supply, however, might just be the simplest direct solution to the supply inelasticity problem.
2. Who and When Created Ampleforth?
Ampleforth founders, Evan Kuo and Brandon Iles
Ampleforth was founded by Evan Kuo and Brandon Iles who conceived the idea of ‘a sound money like Bitcoin, but with an elastic money supply’ in February 2018 and later launched the Ampleforth whitepaper in May 2019.
Both Kuo and Iles are highly educated and talented individuals.
Kuo holds the role of Ampleforth’s CEO and product engineer and holds a BS from UC Berkeley. While Iles holds the role of Ampleforth’s architecture engineer and holds a BS and MS in Computer Science from Rice University.
Prior to founding Ampleforth, Kuo was previously the CEO of Pythagoras Pizza and founded multiple companies including Easy as Pi Inc. and Crowdrally. He also worked as a product manager at Yahoo, was VP Product at Sharethrough, and has extensive experience developing predictive auction products and working with venture capital.
Ampleforth’s other founder, Illes has spent over 5 years at Google's Search Ranking and Machine Intelligence groups, he worked in Uber's Ranking and Relevance team, and he worked as a software engineer at both ESI and Language Computer Corporation.
All in all, it’s clear that these two entrepreneurs have impressive backgrounds and are extremely driven individuals.
Also, accompanying Kuo and Iles in the Ampleforth team are 6 talented individuals with extensive backgrounds in major tech companies like Google, Visa, and others and come from distinguished academic institutions including Yale, UCLA, and more.
3. What is the purpose of $AMPL Tokens?
Ampleforth (AMPL) logo
Ampleforth’s Ample (AMPL) cryptocurrency is a digital currency that adjusts its supply daily based on market conditions. In other words, AMPL is adaptive money with a monetary policy built on sound economics.
Ampleforth’s AMPL token has the following use cases:
- A Diversifying Asset (Near Term)
- A DeFi Building Block (Medium Term)
- A Better Bitcoin (Long Term)
AMPL - A Diversifying Asset
The AMPL digital currency is a non-dilutive asset, meaning it’s uncorrelated to other cryptos and markets due to its elastic supply (daily increasing/decreasing supply). Therefore, AMPL is a good asset to have in your portfolio if you’re looking for diversification.
AMPL - A DeFi Building Block
AMPL can be used as reliable reserve collateral in decentralized banks or various DeFi applications. For instance, AMPL could be used as collateral for loans, AMPL could be lent out via Compound or Aave, etc.
AMPL - A Better Bitcoin
The long-term vision of Ampleforth is for the AMPL digital money to become a viable alternative to central-bank money that is adaptable to supply and demand shocks. In other words, AMPL can be like Bitcoin but more macroeconomically friendly.
4. What Exactly is an Elastic Supply?
The concept of an elastic supply is simple. It’s not fixed like Bitcoin and it’s not infinite like fiat. It’s somewhere in the middle and it’s possible only as a virtual asset.
The total supply of AMPL is increased or decreased on a daily basis and this change in supply is based on demand.
When the oracle price of AMPL is higher than ~$1.06 at the moment of the rebase, every single wallet with AMPL tokens in it updates its amount according to the new total supply. When the oracle price is below ~$0.96, the same mechanism kicks in and decreases the total supply of AMPLs and therefore alters holdings across wallets.
Oracle Rate (Price) as seen on Amlpefort's Dashboard, along with the time to the next rebase: https://www.ampleforth.org/dashboard/
If the oracle price stays between $0.96-$1.06 range then the rebase does not occur.
Most importantly, your ownership of % total supply is never diluted.
5. What is a Daily Rebase?
Ampleforth’s daily rebase is when the supply of AMPL automatically and proportionally adjusts across all wallets in response to demand. The daily rebase occurs every day at 10 pm EST.
With the daily rebase, the number of AMPL you own can change each day. Even if the price remains the same over the course of a few days and is above $1.06, then its supply will extract anyway and wallets holding it will have more AMPLs the next day – increasing the total value of their portfolio.
A great example of the supply expanding due to the price of AMPL staying above $1.06 USD can be seen on these 2 charts here:
As seen in the charts above, despite a price drop in the recent days, the supply keeps expanding when it’s above $1.06 USD. If it were the other way around and the price dropped below $0.96 USD, the supply would keep contracting for as long as it's below $0.96.
What is Supply Based Trading?
As previously mentioned, Ampleforth is unlike any other cryptocurrency ever created due to its elastic supply and daily rebase.
These unique properties make AMPL an uncorrelated asset to Bitcoin and other markets, but they also present investors/traders with novel and lucrative trading opportunities.
For instance, traders can not only take advantage and benefit from a rise in AMPL’s price, they can also benefit from its expanding supply.
To further exemplify this concept, traders can profit from trading AMPL in three different ways; from AMPL price increases alone, from supply increases alone, or both at the same time.
When a trader takes advantage of both an increasing AMPL price and increasing supply, AMPL can yield much greater returns than other crypto projects where only price action is taken under consideration.
To provide an example:
On June 29, 2020, the price of 1 AMPL was $1.327, and the next day it increased to $1.66, and the supply expanded by 6.5%.
Let’s say you held 100 AMPL’s in your wallet on June 29, 2020 worth $132.7 at that time.
How much would you have the next day?
The next day your AMPL balance increased by 6.5% (according to Ampleforth’s algorithm based on demand). Therefore, on June 30, you would have 106.5AMPLs - See? You've got 6.5 AMPLS more thanks to the positive rebase.
Great. Now let's take that 106.5 AMPLs * $1.66 and you'll end up with $176.79 worth of AMPLs.
In the example above, by taking both the price increase of AMPL and the supply increase of your balance into account, your AMPL balance $ value increased by 33.2% in just 1 day, despite that the price of AMPL increased by 25% alone. That 8.2% difference (33.2%-25%) is the extra profit you've made thanks to a positive rebase.
That said, traders who understand Ampleforth’s supply based trading can make an absolute killing when timed properly. It is also important to note that you can also get 'rekt' easier if the price holds too long under $0.96 - as in this case the value of your AMPLs decreases, but also the amount you hold.
6. Who are the key people behind Ampleforth?
Apart from Ampleforth’s all-star team consisting of Evan Kuo, Brandon Iles, and 5 other talented individuals, the project has an impressive advisory board and many noteworthy investors backing the project.
Ampleforth Advisory Board
- Joey Krug
- Sam Lessin
- Niall Ferguson
- Noah Jessop
- Paul Veradittakit
- Manuel Rincon Cruz
- True Ventures
- Pantera Capital
- Founder Collective
- Slow Ventures
- Brian Armstrong (Coinbase)
- FBG Capital
- Huobi Capital
- Spartan Group
- Nima Capital
- Skunk Capital
7. What is Ampleforth Geyser?
The Ampleforth Geyser is an AMPL distribution and liquidity incentive program that rewards anyone with AMPL tokens for providing liquidity on Uniswap V2. The amount of AMPL tokens that are distributed to each liquidity provider is dependent on how much, and for how long they provide liquidity for.
The reason AMPL is being distributed in this way is to boost liquidity on Uniswap and to promote Ampleforth and its unique AMPL token.
Where to stake? How to stake? How is it calculated?
Anyone with some Ether (ETH) and some Ample’s (AMPL) can provide liquidity to Uniswap V2 and then participate in the Ampleforth Geyser program to earn free AMPL tokens.
To start, simply head over to uniswap.exchange/pool and join an AMPL liquidity pool. You will need an equal value of ETH as AMPL (50% ETH + 50% AMPL) when providing funds (‘staking’) to the pool.
Once you have supplied the AMPL token pool with liquidity on Uniswap V2 you will start earning fees on ETH<>AMPL transactions in the pool and receive LP tokens representing part ownership of the ETH/AMPL Pool.
Once you have these LP ownership tokens it’s time to head over to the ampleforth.org/geyser.
The Ampleforth Geyser has a very simple dashboard that looks like this:
When your Ethereum wallet is connected, your LP ownership tokens will automatically show up in the interface.
Click the MAX button next to your LP ownership token balance. Then click deposit. And then voila, you are eligible to receive AMPL tokens.
It’s worth noting that on the Geyser’s dashboard in the top left corner where it shows APR, it’s a daily estimate that changes over time depending on the demand for AMPL at Uniswap. The higher the demand, the greater the APR.
Update: On November 20, Ampleforth announced 3 new Geysers for Uniswap, Balancer, and Sushiswap.
8. Where to Store Ampleforth’s $AMPL?
Ampleforth (AMPL) is a relatively new ERC-20 token residing on top of the public Ethereum blockchain. That said, you can store AMPL in any ERC-20 token supported wallet.
Popular Ampleforth (AMPL) Wallets:
- MyEtherWallet (MEW) (web)
- MyCrypto (web)
In addition to the above-listed wallets, Ampleforth (AMPL) can be stored on a wide variety of other reputable wallets supporting ERC-20 tokens.
9. Where to Buy & Sell Ampleforth’s AMPL?
Ampleforth (AMPL) can be bought and sold on a peer-to-peer (P2P) basis but the most popular way to buy, sell, or trade Ampleforth is through cryptocurrency exchanges.
You can buy AMPL with cryptocurrency or fiat at the following top exchanges. In most cases, you will be able to buy AMPL with ETH and DAI.
- Uniswap - WETH, USDT, DAI, USDC, LINK
- Kyber Network - ETH
- KuCoin - BTC, USDT
- Bitfinex - BTC, USD, USDT
In addition to the exchanges listed above, Ampleforth (AMPL) is also traded on an array of other exchanges and platforms that enable people to buy, sell, or trade cryptocurrencies.
Hope you enjoyed that read :) Let me know if I have missed something in the comments.