The Ampleforth Foundation
- Token Symbol -> AMPL
- The Ampleforth Foundation introduced Elastic Tokens to DeFi.
Cryptocurrency with an elastic supply
- this means that it can change every day without being diluted
- always own the same supply
- 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.
- 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
Problems Ampleforth Aims to Solve
- Fixed supply cryptocurrencies are vulernable to sudden shocks in demands.
- This makes denominating things hard.
- 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
- Provide the AMPL/USD Exchange rate
Provide a Consumer Price Index Value
- Establish a target price → The price that AMPL aims to equal.
- Currently $1.009 → 2019 purchasing 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
- The supply of AMPL tokens is propotional increased across all wallets.
- Alice buys 1 AMPL for $1
- AMPL increases to $2 → Alice is then given an additional token and now has $2.
- Opposite of the Expansion state.
- When in contraction state, the number of AMPL tokens is reduced by the system
- 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.
- No increase OR Decrease
- This is a state in which there is no need to do anything.
- Integral part of Ampleforth’s protocol
- Rebase function is called with once every 24 hous.
2 parameters →
- Equilibrium Threshold
- 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.
- 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
- Liquidity Providng from Amplefprth