Hey there! If you are here, then you are probably sixteen or older and a crypto enthusiast! NO? Worry Not! Here you will learn about AMPL, even if you are five.
Every seven or older reader, be like: (ps- Sorry :P)
What is AMPL?
Ampleforth is a digital-asset-protocol for smart commodity-money. Ampleforth is a protocol on ethereum network, whose main goal is to maintain a crypto asset with a value equal to the U.S. dollar and increase its usability in order to be used as reserve collateral in decentralized banks. It adjusts its supply on demand following a super easy algorithm, which we will discuss later in this post!
Ampleforth is often misunderstood to be a stablecoin. While the aim of Ampleforth is fundamentally to provide the same function as a stablecoin, it is not backed by US dollars like Tether nor any locked Ethereum assets like MakerDAO’s DAI stablecoin, instead Ampleforth is a cryptocurrency protocol with an elastic supply that can expand or contract based on market demand. It is redefining how money works, combining the best of Bitcoin, cryptocurrency, and stablecoins.
(Image via Ampleforth) 
How does AMPLEFORTH works?
The protocol’s native token is AMPL. AMPL implements the ERC-20 interface and can be used with any native blockchain wallet. AMPLs are designed to be suitable for use as a “base-money,” a form of collateral to be used as part of a centralized or decentralized banking system, meaning there is no notion of debit or credit in the system. The Ampleforth algorithm adjusts the supply of AMPL in order to maintain it's value close to the U.S. Dollar. The protocol targets a price range between $0.96 and $1.06. If the price varies from this range, the protocol follows the rebasing process, which is done on a daily basis at approximately 02:00 UTC. However, Ampleforth is not a stablecoin, stablecoins are designed to remove volatility from economic markets while Ampleforth’s protocol still allows for volatility.
Now if you are wondering, what is rebasing, then here is the thing!
The monetary protocol automatically adjusts the supply of AMPL across all user wallets based on price. This means the number of AMPL you own changes based on market conditions. When price is high wallet balances automatically increase. When price is low wallet balances automatically decrease. This supply adjustment operation happens once per day and is called a rebase. This daily rebase operation is applied universally and proportionally across every wallet’s balance. This means AMPL is non-dilutive. Like Bitcoin, if you own 1% of the overall network you will always own 1% unless you actively make a transfer.
Simply put, if demand for AMPL tokens is high, and each AMPL token exceeds $1, the supply will increase. If demand is low, supply will decrease. In this way, AMPL is an example of a cryptocurrency that is elastic and non-dilutive, meaning that the supply can change, but as the supply changes, users retain the same proportion of the overall supply.
(Image via Ampleforth)
For example, Michael has 10 AMPL worth $10 ($1 each), demand doubles and now he has 10 AMPL worth $20 ($2 each), so to maintain the equilibrium, rebasing occurs and supply increases! Michael now has 20 AMPL worth $20 ($1 each). So, rebases do not dilute the existing token holders. Here, the holders own a fixed percentage of the network rather than a fixed amount of tokens. This demand-supply mechanics of the token, makes AMPL unique and decorrelates AMPL from other cryptocurrencies. This clearly proves that AMPL is far more safer than Bitcoin, as it persists the price and adjusts supply along with providing a great performance! As I said earlier, it is redefining how money works, combining the best of Bitcoin, cryptocurrency, and stablecoins.
Ampleforth also takes into consideration US inflation, i.e. , $1 of today will be worth $1 even after 10 years in real terms. On the other hand, stablecoins do not take into account the dollar inflation.
AMPL ANALYSIS!
Just like its nature, the price history of AMPL completely differs from any other cryptocurrency. Since its inception in June'19, has hovered mostly between $0.5 to $1.50. Due to a high spike in demand for AMPL tokens, the price went up to $4. Now, you might be thinking, isn't AMPL supposed to stay between 0.96$USD and 1.06$USD. Correct! But the demand for AMPL token outpaced the rate at which its supply is adjusted, so it took a while but AMPL was back at equilibrium again. For the past few months though, it has been able to maintain its equilibrium almost perfectly. Such spikes in demand results in higher market cap with the same price per AMPL token.
Started with a market cap of almost $9.2M, Ampleforth went as high as $688M and now it is close to $300M. For past 4 months, the price of AMPL has hovered between $0.75 to $1.25 and the market cap has increased significantly. The market cap graph for Ampleforth in past 1 month completely resembles the price graph, this shows the effectiveness of the AmpleForth Algorithm!
Future of AMPL: What to Expect?
Ampleforth is undoubtedly, one of the most promising projects and definitely worthy of keeping an eye on! Its long term goal is to establish itself as world’s denationalized currency, with a short term goal to be listed on various major exchanges.
AMPL has the ability to be a billion dollar project due to its uniqueness, speculative nature and usability.
AMPL has a very low correlation to other crypto assets (thanks to its adjusting supply mechanism), which makes it unique. AMPL is speculative in nature, its price can fluctuate freely just like Bitcoin but still act like a stablecoin in the long term, increasing its worth as being usable. Once it achieves the feat of a stablecoin with its own algorithm and stays in the defined range(i.e., between $0.96 and $1.06), AMPL could effectively be used for payments and fulfill its long term goal.
To learn more about Ampleforth, please read the AMPL red book here.
