The Ampleforth Foundation

• Token Symbol -> AMPL
• The Ampleforth Foundation introduced Elastic Tokens to DeFi.

• Cryptocurrency with an elastic supply

  • Elastic supply:

    • this means that it can change every day without being diluted
    • always own the same supply

  • Ex.

    • USD → the fed can print money as it sees fit
    • Asset that does not have an elastic supply → Bitcoin
• Constant price changes can be quite problematic → negative impact on the denomination of services, things, debt etc.

• Diluting

  • Term used for a currency losing its value.
  • When th Fed increases the amount of money in the circular, it dilutes the proportion held by everyone else.

• AMPL is NON-DILUTING

  • Used supply adjustment proportionately across everyone’s balances → ALWAYS OWN THE SAME SUPY.
  • Out does this by adjusting

  • Ex. Scenario in which USD is non-diluting

    • The Fed increases the supply of dollars by 5% to meet an increase of demand.
    • Effect on a bank account with $1000 $1050

AMPL vs BTC

• Bitcoin:

  • Inelastic
  • Non-dilutive

• AMPL:

  • Elastic
  • Dilutive

Problems Ampleforth Aims to Solve

1. Inelasticity Problem

   • Fixed supply cryptocurrencies are vulernable to sudden shocks in demands.
   • This makes denominating things hard.

2. Diversification PRoblem

   • Cryptos are tightly correlated.
   • Ample unique incentives allow for it to decouple from BTCs price patter

Price Oracles in Ampleforth

2 main functions of oracles in Ampleforth

1. Provide the AMPL/USD Exchange rate

2. Provide a Consumer Price Index Value

   • Establish a target price → The price that AMPL aims to equal.
   • Currently $1.009 → 2019 purchasing Price

Target price

• Plays an integral role in Ampleforth’s Protocol
• Used in conjunction with the current price → This determines whether the supply should change or not.

Ampleforth has 3 different states

1. Expansion

• The supply of AMPL tokens is propotional increased across all wallets.

• Example:

  • Alice buys 1 AMPL for $1
  • AMPL increases to $2 → Alice is then given an additional token and now has $2.

2. Contract

• Opposite of the Expansion state.
• When in contraction state, the number of AMPL tokens is reduced by the system

• Example:

  • Alice purchases 1 AMPL for $1
  • AMPL goes to $0.5 → Alice’s AMPL amount is reduced to .5 AMPL
• Ampleforth’s algorithm only has the ability to change the supply of AMPL → It does not effect the price directly
• External players are responsible for recognizng changes in AMPLs token amount and then update the price accordingly.

3. Equilibrium

• No increase OR Decrease
• This is a state in which there is no need to do anything.

Rebase Function

• Integral part of Ampleforth’s protocol

• Process:

  1. Rebase function is called with once every 24 hous.

  2. 2 parameters →

     • Equilibrium Threshold

     • Smoothing Factor

       • Also called a “dampening factor”
       • Used to avoid sharp supply changes by spreading change across 10 days
       • Ex. Rebase function returns a 50% expansion → Damperning factor results ina 5% increase every day for 10 days.

• Stateless:

  • Rebase function has no memory.
  • This result in it having as to recompute the value each day.

Ampleforth Wrap Up

• ERC20 Token (Currently) -> Gfoal hopes
• Chain Agnostic → Can exist simoultaneously on multiple platforms
• In short term ⇒ Ampleforth aims to diversify portfolios by avoiding correlation with BTC, unlike many other cryptocurrencies.
• Medium Term → Ability to be used as collateral on DeFi protcol
• Long Term → Create an alternative to central bank currencies which is adaptive to shocks

Ampleforth Geyser

• Liquidity Providng from Amplefprth

Final Words on Amplewoth.

Always look at the number of tokens in addition to the price → Provides us with the full value of