A look at the Ampleworth Project

December 14, 2020

The Ampleforth Foundation

Ampleworth Foundation Banner Logo

  • 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.

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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

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