The Ampleforth token seems to have a real love/hate relationship with the general/crypto public. Being a highly experimental concept (token elasticity) you only have to scroll through the comments in Reddit for a couple of minutes to see that there are almost as many folks shouting "SCAM" and there are shouting "GENIUS". One thing is true though is that regardless of which side of the fence you're on there is agreement that the basics of the token really can take some time to wrap your head around.
It is all well and good for experiments to explore new concepts, but what does that mean for investors? Risk is a big thing and in the past we've only hand to contend with price fluctuations. No-one wants to sink money into coins only for the price to go down. The one glimmer of hope that we currently hold on to with a traditional model is that even if value goes down we've still got the same amount. Normally we can hold tight and wait for the bounce back. However, this is exactly where Ampleforth differs. Indeed, as a direct result of price fluctuations due to the expansion/contraction phases of the token state (summary video in case you're lost), the number of tokens held in our wallets can shift on a daily basis. Naturally, it can be really hard to let go of the need to boil down our investment to a simple "How many do I have?" question. Though it is possible to do this with Ampleforth, all we need to do is change the question slightly; "How much of the total supply do I have?", the short answer should be "The same as yesterday". This way we can start to quantify our holdings and start to understand where our investment sits in the pool.
In this article we're going to look at a what is going on with the Ampleforth right now and a few useful tools that can help quantify returns on investment (ROI) for those out there that want to get involved in the experiment. Before reading ahead remember I'm not offering any kind of financial advice or technical market analysis. Always remember the saying "Don't invest what you cannot afford to lose" and I'll add to that "and always do your homework".
Where are we now?
So over the recent weeks Ampleforth has been knee deep in a contraction phase. This is where the price sits below the ~$1 threshold (dotted lines in the price chart below) so the number of coins held in wallets has been reducing to contract the supply and effectively attempt to drive up price. Ideally, we're aiming for equilibrium, however this is unlikely at the early stages so as of 29-Aug-2020 the price jumped back up above the threshold. As a result of this the supply finally increased for the first time in a month.
This means that we've started back in the expansion territory, where the number of coins in wallets increases to try and match the demands set by the market price. It was the initial expansion phase that started at the end of June and went through the July that really saw a boom in the buzz around Ampleforth and could well do the same if we sit in this zone for a sustained period of time.
Updates to liquidity
As most folks will be aware one of the bonus' for getting involved in Ampleforth is the incentivized liquidity program (termed by the team 'Liquidity Mining'), often know as yield farming. Originally, we were able to do this thought the Uniswap liquidity pools, offering up 50% ETH and 50% AMPL to buy our spot on the merry-go-round. Interestingly, over the last couple of weeks the range of pairing has been expanded and the program extended. It is still possible to earn through Uniswap, however, the newer kid on the block Mooniswap has also waded into the deep waters of the DeFi world to shake things up a bit.
This opens up a wider variety of direct trading pairs now meaning that buyers can cut down on those pesky intermediate steps. Furthermore, as you can see there is definitely a leaning toward established DeFi specific projects where you may already be earning for providing liquidity. Additionally, due to these being new the % APY up for grabs for early providers is back to the crazy numbers we saw in the earlier days (just last month!!) of AMPL-ETH. Which COMP sitting the highest, at time or writing, a whooping ~450%!!
If I am honest I've not joined any of the newer pools, but I did get in early-ish for the previous round of AMPL-ETH, and topped up a little recently. Since then I've accrued my initial investment in fees and my pool value (according to Zapper.fi) is sitting at around 2x my initial investment, so not too shabby, as well as earning me an additional chunk AMPL from the Geyser itself.
Managing your ROI Calculations
One of the most confusing things about getting into Ampleforth is figuring out, a couple of weeks after buying some tokens, if you have made the right choice and how your investment is looking. Never fear though there are a few useful tools out there that help to make this process a little more easy to understand.
Zapper - https://zapper.fi/
Firstly, ZapperFi. This is my go to for seeing the state of play for pool. Just either browse for your wallet or connect it and you should see a tidy section with any liquidity pools you're part of like this (Note this is not my wallet I just picked it at random from the recent additions to Uniswap):
Having easy access to the value of liquidity is great, however, what if we've just been investing (not farming) and need to figure out if we've got good ROI? This is where the next two tools can be used together to answer that question.
AMPLCalc - https://amplcalc.app/
AMPLCalc is a handy site that allows you to dig into regular investments and consider the ROI, while taking into account the regular rebases. You do this by adding various buy/sell rows and clicking on "Calculate" (basic example below).
What you get afterwards is a nice tidy plot the ROI of your fund over time (rebases factored in). Further down below the chart there will also be a list of the individual days and the ROI over time.
Now the AMPLCalc may be really useful, but who here only ever bought a token in USD!? Right! This is a tricky one to use because you perhaps bought with DAI, or maybe ETH or perhaps had some BAT that you converted in a round about way to AMPL. The point is it is really difficult to use this tool accurately without knowing the amount of AMPL you got and the amount in USD you paid on that given day.
Never fear though, this is a blockchain, we have access to that information already we just need to find some way of digging it up.
Zerion - https://zerion.io/
This is where another awesome dApp I recently learned about (thanks @walkonwayvs!) comes into play. Zerion allows you to easily dig into your transaction history and see how much you spent in tokens/coins as well as the USD value of it that day. Simply connect to your wallet and click on 'history' on the left navigation panel. You'll be able to locate items with all the info you need for the AMPLCalc in the transaction history (again not mine, just a random address):
The first thing with Ampleforth is getting your head around the concept. I'll confess I am still not quite there, but regularly watching the video in the previously linked article regularly makes me feel better. Then there is separating out the knee-jerk reactions:
"My total tokens are going up, Moon here we come!"
"Where are my AMPL going you are stealing from me, damn you internetz!"
Once you get past these and start to make use of the AMPLCalc, to factor in the elasticity to your investments, it becomes much easier to get to grips with. Sure, you'll still have to figure out when is the right time to buy and when is the right time to sell, but that is all part of the game. If you know that already, feel free to share the knowledge with the rest of us!
I'm not going to call this wave for AMPL too soon as I'm usually wrong about these things. However, if it is even half of what we experienced in July we could be in for a good stretch of token expansion. It will be interesting to see where the market cap peaks this time around.
Hope you enjoyed the article and find some of the information useful, thanks for reading, good luck y'all
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