Ampleforth (AMPL), a project which is building “synthetic commodity money”, on June 23 revealed that it has launched its liquidity incentive program on the Uniswap exchange. Called Ampleforth Geyser, the program was first announced in April 2020.
Users can provide liquidity to the AMPL/ETH trading pair on the exchange, for which it is claimed that they will receive an APR of 103%. 25,000 AMPL is expected to be distributed every month as a part of this program. The motivation for the program has been described as follows,
First, it helps distribute the Ecosystem fund out into the world in a sensible, permissionless, and predictable way. And second, it distributes to those who contribute to the health of the AMPL ecosystem.
Ampleforth is the most recent project to offer farming yield programs, which in just the last week has seen many defi platforms do the same. Synthetix and Balancer have launched similar liquidity incentive mechanisms, the former doing so in collaboration with Ren (REN) and Curve (CRV).
A screenshot of the Geyser interface. Source.
However, Ampleforth’s Geyser liquidity program holds some differences from other programs. Those who stake for longer are given more of the reward pool, with rewards multiplying to a maximum of 3x in the following months. This is done to encourage long-term liquidity provision.
The Ampleforth protocol and its asset differs from others in that the amount of holdings changes depending on market conditions. Supply increases as price increases and vice versa, in order to maintain a price-supply equilibrium and avoid inflationary effects.