Ampleforth

What is the Ampleforth Protocol?

The Ampleforth protocol is a decentralized financial system built on the Ethereum blockchain, producing a unique unit of account called AMPL. This protocol, part of the Ampleforth Elastic Finance Ecosystem, utilizes the AMPL token for lending, borrowing, creating derivatives, and serving as collateral for a decentralized stablecoin.

Ampleforth addresses price volatility, allowing cryptocurrencies to function as reliable units of account. It separates the goal of creating a durable unit of account from attempts to store near-term value, aiming to rebuild the financial stack with modular, durable blocks. AMPL serves as a building block, enabling the creation of stable on-chain contracts without reliance on centralized entities.

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Recent Video Interview

Main points of the interview:

• Ampleforth enables robust contract denomination and resisting natural market forces.
• Ample's protocol adjusts token quantities across user wallets based on USD exchange rates.
• Unlike stablecoins, AMPL doesn't seek to eliminate volatility but rather transfers it, maintaining resilience against market shifts.
• Ampleforth's two-and-a-half-year track record, demonstrating its efficacy in separating asset price volatility from token quantity volatility.

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AMPL and FORTH Tokens

AMPL: An ERC-20 token, AMPL functions as the unit of account in the Ampleforth ecosystem. Its supply dynamically adjusts based on market demand, deviating temporarily from its target to ensure long-term stability.

FORTH: As the governance token, FORTH is used to influence protocol parameter changes, direct liquidity mining emissions, and manage assets in the DAO treasury, fostering innovation in elastic finance and DeFi.

How the Ampleforth Protocol Works

The Ampleforth Protocol employs an elastic supply policy, automatically expanding or contracting the quantity of tokens in user wallets based on market demand to maintain a stable price. The protocol's expansion and contraction mechanisms ensure the eventual return of AMPL's price to the CPI-adjusted 2019 USD.

Elastic Supply Policy:

• Expansion: Occurs when AMPL price exceeds 1 USD, increasing token quantity in user wallets.
• Contraction: Takes place when AMPL price falls below 1 USD, decreasing token quantity in user wallets.
• AMPL experiences supply volatility, but contracts denominated using AMPL remain stable in the long run.

Decentralized Lending

AMPL facilitates decentralized debt denomination, overcoming the challenges of borrowing with price-volatile currencies like ETH. AMPL-denominated loans provide stability for borrowers, eliminating dependency on centralized stablecoins. AMPL is already available for lending and borrowing on AAVE.

Governance and Progression

The Ampleforth protocol's governance involves a series of steps, from discussions to binding votes. FORTH token holders drive decision-making through proposals and voting, ensuring the protocol's evolution aligns with the community's consensus.

Steps:

• Discussion: Community-driven discussions on various platforms.
• Proposals (AIPs / ACCPs): Formal documents proposing protocol changes.
• Targeted Discussion: Finalizing issues and formalizing off-chain consensus.
• Off-chain Signaling: Non-binding sentiment gathering from token holders.
• Technical Development: Code implementation, testing, and security audits.
• Binding Vote / Deployment: On-chain voting for protocol changes.

Forth DAO and Protocol Features

The Forth DAO focuses on AMPL's growth and adoption, overseeing protocol-owned liquidity, ecosystem development, marketing, and more. FORTH token holders govern the DAO's funds, participating in decision-making through yearly votes.

Overview:

• FORTH token has a protocol-enforced maximum inflation of 2% per year.
• DAO-controlled emissions of new FORTH tokens.
• Annual votes on FORTH minting and fund usage.
• DAO treasury manages protocol assets.

The FORTH DAO treasury holds Protocol Owned Liquidity, allowing FORTH token holders to direct treasury assets for liquidity addition or removal.

Wrapped AMPL

Wrapped AMPL (WAMPL) is a token that facilitates integrations on both centralized and decentralized platforms. It simplifies technical considerations, maintains easy understanding for users, and acts as a bridge between AMPL and other platforms.

Key Benefits:

• Fully redeemable on-chain for AMPL.
• Zero technical integration for platforms supporting ERC-20 tokens.
• Easy to understand, following traditional market expectations.
• Non-rebasing with a simple floating price.
• Fixed supply of 10 million tokens, fostering network effects.

Team Background

Ampleforth, founded by Evan Kuo, a mechatronics, robotics, and automation engineering graduate from UC Berkeley, is led by a team of primarily engineering professionals. Kuo, with a background in predictive auction products and prior CEO experience at Pythagoras Pizza, now serves as CEO of the Ampleforth Foundation.

The team includes Brandon Iles, a co-founder and former senior software engineer at Uber and Google. With over a dozen team members, mainly based in the San Francisco Bay Area, Ampleforth is known for its innovative protocol in decentralized finance. Kuo's diverse expertise, along with a team focused on engineering, highlights the foundation's commitment to the development and management of the Ampleforth protocol.

Project Development

At the end of 2022, Ampleforth launched Spot. Spot, a decentralized store of value, bridges the gap between speculative cryptocurrencies and dollar substitutes, utilizing the Ampleforth and Buttonwood protocols and governed by FORTH. Spot aims to be a responsible design within its class, prioritizing decentralization and avoiding reliance on off-chain custodians.

The project's design philosophy emphasizes simplicity, modularity, and transparency in risk management, evident in its proportional claim model and ability to wind down to zero users. Spot does not react to market changes, eliminating explicit feedback loops, bailouts, and reliance on lenders of last resort. The system is open source, audited by Peckshield, and features a bug bounty program for security.

Spot's responsible execution involves a cautious launch, starting small with supply caps that can be adjusted through governance, promoting gradual market maturity. If the supply ceiling is reached, Spot may experience temporary over-valuation, but this is considered a natural part of the growth process rather than a flaw.

Ampleforth Price Analysis

As of November 24 2024 Ampleforth has a marketcap of $137M. This is {{percentagefromath}} from its all time high of $4.07. In terms of its tokenomics, there's a total supply of 127M with 87% currently outstanding. Keep in mind Ampleforth has a fully diluted value of $158M which many investors might interpret as overvalued.

Of course, don’t trust price predictions alone, always check the Coinrotator token screener to follow the trending market.