This article will provide you with everything you need to know about Ampleforth (AMPL) tokens so that you can make informed and independent decisions about whether to buy AMPL or not as part of your overall cryptocurrency investment portfolio.
AMPL is currently (10/08/20 -11:38 am UTC) trading at USD 0.763979 with a total and circulating supply of 668,314,534 AMPL and 284,332,332 AMPL respectively — according to data from CoinMarketCap.
Given that changes in these values will determine the profitability or otherwise of your investment in AMPL, we will examine the factors influencing the token’s price and supply.
Along with AMPL use-cases, technology, and team, a peek into the future of AMPL based on the roadmap or direction the project is going.
So, without much ado, let’s get started.
What is Ampleforth Protocol (AMPL)?
The project received $3 million from investors, including Brian Armstrong (CEO of Coinbase), Pantera Capital, a cryptocurrency investment fund, and True Ventures — a Silicon Valley-based venture capital firm.
Ampleforth aims to solve the following major problems that are prevalent in the cryptocurrency market and traditional economy:
- Tight correlations between bitcoin and alternative cryptocurrencies make the market vulnerable to extreme volatilities, posing serious systemic risks for DeFi platforms where cryptocurrencies are used as collateral.
- Reckless monetary policies of central banks cause the constantly eroding purchasing power of money due to inflation.
The Amples Token (AMPL)
The Amples token (AMPL) is an Ethereum-based ERC20 token and a synthetic commodity money, just like Bitcoin, but with near-perfect supply elasticity, like fiat.
Ampleforth Protocol combines the best of the worlds of Bitcoin and Stablecoins to create a digital asset that reportedly provides you a hedge against the inflation of the USD by striving to maintain a stable price per token equal to the CPI-adjusted 2019 US dollar —which is currently at $1.011.
In theory, the Amples (AMPL) token is a “kind of Stablecoin” (but not your regular Stablecoin) that is far less correlated to Bitcoin and other digital assets and isolated from the inflation-prone traditional fiat.
To cut a long story short, the main benefit of an Ample (AMPL) token is that the purchasing power of the money you have in your wallet will always remain the same regardless of the economic or market conditions.
So, in essence, with the AMPL token, you’re free from the inflationary pressures of the fiat dollar caused by the endless money printing of central banks that tends to erode the purchasing power of your money.
More so, the price or value of AMPLE token is fully decoupled from Bitcoin and the rest of the altcoins market and has a long-term vision of becoming “a better Bitcoin” in the far future.
Discover how the Ampleforth protocol works and its unique features compared to Bitcoin, other Stablecoins, the US dollar, and more.
How Does Ampleforth Protocol (AMPL) Work?
As stated above, the Ampleforth protocol has set a target price for AMPL based on the value of the U.S. dollar in 2019 —as at the time of writing this line, this stable price is at $1.011.
Every 24 hours, the supply of the AMPL token is automatically adjusted by the smart contract based on the current price per AMPL token.
The aim is to push the token’s price to the stated target rate of roughly $1, and as long as AMPL trades below or above this rate, the supply will be dynamically adjusted daily until a stable price is achieved.
This automatic supply adjustment is referred to as “rebase.”
The rebase can be negative or positive depending on whether the price per AMPL token is below or above the targeted rate of $1.011.
If the price is above $1, the supply of Ample tokens will be increased, and if the price is below $1, the supply of Ample tokens will be decreased accordingly.
In simpler terms:
- A price above approximately $1.061 will lead to a positive rebase. Token supply will be increased.
- A price between $1.061 — and $0.961 will not cause a rebase, as it’s within the equilibrium range. There will be no change in the token supply.
- A price below $0.961 will lead to a negative rebase. The token supply will be reduced.
When there is a token supply increase or decrease, everyone’s token will undergo the same change proportionally.
For example, if you hold 1% of AMPL when the total supply is 1 million, you will still hold 1% of AMPL when the total supply is 100 million — assuming you did not sell or add to your portfolio.
A change in supply changes the number of tokens you have in your wallet, but your percentage share of the toexactl token supply remains the same.
So you could go to bed leaving 100 AMPL tokens in your wallet and wake up the next with more or less amount of Ample tokens depending on if the current price is below or above $1.
The video below, by Finematics, is arguably the best explanation of how the Ampleforth (AMPL) cryptocurrency works.
Now, it is important to note that Ampleforth Protocol never resets the price of AMPL to $1 during a rebase.
Instead, the market — buyers and sellers — determines the price.
The intelligent contract inflates the supply when the price rises above $1, incentivizing market participants to sell their AMPL and essential price back to the equilibrium range ($1.06 – $0.96) and vice versa.
However, if the demanInsteadeighs the excess supply (sell), Ample tokens will keep increasing intelligent; it’s not pegged to any asset or fixed at $1.
Similarly, supply will decrease over time when the token price falls below the equilibrium range, and the price will NOT automatically move back to $1 after rebase.
It will require buyers to buy the token on the open market to push the price to the equilibrium range or the positive rebase territory — $1+.
This whole price and supply dynamics can be graphically represented as below.
The Team and those behind Ampleforth
Francisco-based engineer and robotics researcher co-founded Ampleforth Protocol —Evan Kuo and Brandon Iles in 2018.
The project is actively managed by The Ampleforth Foundation, which is a team of engineers, academics, investors, and enthusiasts, including:
- Evan Kuo — Engineer/Product: Formerly CEO at Pythagoras Pizza.
- Brandon Iles — Engineer/Architecture: Formerly at Google and Uber.
- Ahmed Naguib Aly – Engineer / Backend: Also formerly at Google
- Nithin Krishna – Engineer / Backend: Previously at USC and IRDS/IMSC as a research engineer.
- Jessica Yen – Branding / Operations: Former co-founder of Pythagoras Pizza
- Richy Qiao – Business / Operations: Formerly at NYC as a consultant working with clients such as Morgan Stanley, DTCC, and Visa.
- Simon Manka – Growth: Previously a member of the IOSToken
Among the participating investors in Ampleforth are Brian Armstrong (CEO of Coinbase), Pantera Capital, a cryptocurrency investment fund, and True Ventures — a Silicon Valley-based venture capital firm.
Check out the project about page for the full list of team members, advisory board members, and investors.
Also important worth mentioning is the Ampleforth community members — Ampleforce!
Ampleforth has one of the most active and supportive social media communities in the crypto space, with over 12,000 members and followers each on Telegram and Twitter, helping expand awareness for the project.
Ampleforth (AMPL) Use Cases
The Ample token is a crypto asset with a unique and dynamic volatility profile with a considerably low correlation to Bitcoin and other cryptocurrencies.
Specifically, AMPL is ideally suited for the following use cases in the near, medium, and long term respectively:
- As a portfolio diversifying crypto assets to spread your risk exposure.
- As a reserve collateral instrument on DeFi platforms and decentralized banks
- As an alternative to central-bank money that is adaptable to economic and other shocks
Core Features of Ampleforth (AMPL) Protocol
The following are the key features of the Ampleforth (AMPL).
- Algorithmic: The Ampleforth protocol rules are encoded in and enforced by the smart contract on the Ethereum blockchain. This allows for predictable actions and measurable responses and effectively check against governments’ discretionary monetary policies.
- Non-Dilutive: Regardless of supply changes, you will always own the same percentage share of the network value. For example, if you own 1% of the network, you’ll always own 1%, whether market capitalization is $1 million or $1 billion.
- Bankless: There’s no debt or credit system with AMPL. No banks and financial institutions create new money through lending and borrowing.
- Simple Incentives: The Ampleforth protocol is transparent, simple, and easy to understand. The protocol has only two rules for expansion and contraction and depends solely on profit-seeking actors in the marketplace to reach the target rate or equilibrium.
- Non-Custodial: You always maintain full custody of your Amples on the blockchain.
- Minimal Governance: AMPL was designed to minimize the need for governance. No governance exists to effect supply adjustments because the smart contract takes care of that.
- Distinct Movement Pattern: Ampleforth offers a way to diversify risk in a dangerously correlated cryptocurrency ecosystem with its dynamic supply adjustment systems.
- ERC-20 and Blockchain Agnostic: AMPL is an Ethereum-based ERC-20 token that is also blockchain agnostic. It can be used with any native blockchain wallet and integrated with many DeFi application platforms.
Where Can I Buy Ampleforth?
The AMPL token is traded on the following exchanges when writing this article.
You can buy and sell on any of them:
- Kyber Network
- Uniswap (V2)
- Bamboo Relay
Other Relevant Resources for Further Research
Whether to buy AMPL or not is a decision you will have to make by yourself, considering the available information at your disposal.
If you’re a regular CryptoSorted reader, you should already know that you should not invest in any crypto project without doing your thorough research (DYOR).
Some good resources for a deeper look into AMPL you may like to check out are:
- The Ampleforth Whitepaper
- The Ampleforth Redbook
- The Ampleforth Website
- AMPL Outcome Bot — @ampl_roi_bot (telegram)
Ampleforth is a new monetary experiment that may or may not work.
And whether it can or will become a global legal tender is something we will only have to watch and see.
In addition, its supply mechanism alienates regular cryptocurrency enthusiasts not used to seeing their crypto assets increase or decrease automatically in their wallets or exchange accounts.
As a result, more excellent education will be needed to make any meaningful headway with mass adoption.
However, Ampleforth is a great project with the potential to transform decentralized finance — DeFi.
According to the co-founder — Kuo:
“AMPL’s differentiated movement pattern — automated supply adjustment — reduces the risk of auto-liquidation in the DeFi space,”
Its supply elasticity and non-dilutive nature create a fairer monetary system.
More so, AMPL is not strongly correlated to Bitcoin and other cryptocurrencies, making it a great instrument for investors who want to enhance their cryptocurrency portfolios.
Do you think AMPL has the potential to revolutionize DeFi and ultimately become a global legal tender? Share with us in the comments section below.