A Guide to Ampleforth (AMPL) – The Non-Pegged Stable Cryptocurrency
Ampleforth is a digital asset protocol for smart commodity money that aims to provide a sustainable alternative to central bank currencies.
Riding the ever-rising wave of DeFi, Ampleforth manages to stick out from the crowd by being a hybrid between stablecoins and automated market makers (AMM).
With short history and a potentially long existence ahead, Ampleforth dreams of becoming relevant one day when money’s denationalization will be complete.
What is Ampleforth?
Ampleforth is a DeFi protocol built on the Ethereum blockchain that aims to redesign money evolution both in fiat form and cryptocurrency. In this regard, it uses the AMPL stablecoin, also referred to as Ample, which uses a reflexive rebasing system to try and stabilize the asset’s value around a US Dollar in the long-term.
To keep the purchasing power despite the pressure of dollar inflation, the protocol increases the supply of AMPL whenever demand goes up. Conversely, it decreases the supply of Amples whenever demand goes down.
These changes in supply take place directly in all AMPL wallet balances while keeping the same percentage of global AMPL supply.
While some confuse Ampleforth for a stablecoin, this innovative protocol is much more than that. The project plans to be the base money of the new decentralized economy. It is not backed by USD, like many other stablecoins out there, and it has no assets locked in value protocols. For now, it exists on the Ethereum blockchain, but it might, and should, have its own blockchain in the future.
By providing an asset that cannot be diluted by supply inflation, Ampleforth stands out as a stable economic source whose value does not oscillate in connection with the volatility that other assets, mostly Bitcoin, usually experience.
What is the Ampleforth Cryptocurrency (AMPL)?
AMPL, or Ample, is an ERC-20 token built on Ethereum, and it is the native asset on the Ampleforth protocol.
Those who hold Amples do not have an exact number of tokens. Instead, they own a fixed fraction of the total AMPL circulating supply. Ampleforth adjusts its price depending on the demand and supply for AMPL existing on the market at any given time.
Every day, at 1:00 p.m. (EST), AMPL holders can witness the change in the amount of Amples in their wallets proportionally as the protocol tries to stabilize its price. No matter how the change affects the price of AMPL, the token holders retain the same percentage of the total token supply.
Ampleforth released its whitepaper and token between 2018 and 2019 through two Initial Coin Offerings (ICOs) and one Initial Exchange Offering (IEO), which raised almost $10 million in total from selling nearly 16 million tokens. The IEO on Bitfinex raised $4.9 million after selling all AMPL tokens in just 11 seconds.
The initial supply of AMPL tokens that were issued in the beginning was 50 million units, which were distributed like this:
- 25% went to the Ampleforth Team and Advisors, which include all former and future Ampleforth employees.
- 2% went to the Ecosystem, which is a fund destined to support community growth.
- 20% went to the Ampleforth Treasury.
- 5% went to the Seed investors, which include industry members like Pantera Capital.
- 10% went to the IEO.
- 3% went to Serie A investors, which include crypto support from entities like Huobi Capital.
Since its release, the Ampleforth token has oscillated in value and reached its all-time high (ATH) at $4.04 on July 12, 2020.
At the moment, Ampleforth has a market capitalization of $154,366,845. There are over 135,211,419 AMPL in circulation out of the total supply of 255,043,733 AMPL. One Ample is trading for roughly $1.15 as of November 2020.
Since Ampleforth is an ERC-20 token, you can store it in any wallet which supports Ethereum-based assets. You should be able to safeguard it in established crypto wallets like Trust Wallet, Ledger Nano S, and Exodus Wallet.
Who is in the Ampleforth Team?
Ampleforth comes from the talented mind of Evan Kuo, a highly-experienced product manager and serial entrepreneur from San Francisco. Kuo holds a bachelor of science (BS) in mechatronics, robotics, and automation engineering from UC Berkeley.
Previously, Evan Kuo was the CEO of the Pythagoras Pizza franchise in San Francisco before taking up the same role at Ampleforth Foundation, the management firm behind Ampleforth.
Kuo is not a stranger to cryptocurrency. He made the news in 2017 by announcing the tokenization of the Pythagoras Pizza franchise. He planned to incentivize third-party delivery drivers with rewards for their work.
The project attracted the attention of Pantera Capital and Brandon Iles, a former employee of Google and Uber. With their input and support from the likes of Coinbase CEO Brian Armstrong and Huobi Capital, Kuo developed Ampleforth.
At the time of this writing, the Ampleforth Foundation is managed by Kuo and a team of “engineers, academics, investors, and enthusiasts” who have advanced technology and finance studies at institutes like Harvard, MIT, Stanford, and Yale. The company operates from the San Francisco Bay Area.
How Does Ampleforth Work?
Ampleforth works by modifying its supply of AMPL every day at the same time to match the demand on the market through a smart contract that uses the Chainlink price oracle.
Chainlink also supported the building of an Ampleforth oracle that works together with the Chainlink one to extract data from crypto exchanges like KuCoin and Bitfinex and translate it on the chain to adjust the AMPL supply and subsequent value.
Ampleforth does not make adjustments in connection with the present-day value of the US Dollar. Because the US currency has a yearly inflation rate of nearly 2-3%, Ampleforth makes the necessary modifications to the value of the USD in 2019.
The estimated supply change is calculated each day. However, the change in supply is not instant in its full amount. Instead, it takes place over ten days to avoid unnecessary corrections.
Ampleforth claims to build “vertically up the stack and horizontally across chains.” It is now reaching the end of its initial proposal for a roadmap, and just ahead is the release of elastic automated market makers (AMM).
The latest Ampleforth development involves collaboration with Uniswap, called The Ampleforth Geyser.
The Geyser should incentivize users to deposit liquidity on the Uniswap platform. In return, they would receive AMPL tokens in amounts that vary depending on how much liquidity they provide and how long they keep it on Uniswap.
The Bottom Line – The Beginner’s Guide to Ampleforth
Ampleforth aims to become a fierce rival of national currencies in the future. The project has in mind the denationalization of money in a world where citizens have more control over their assets and access to a wide range of currencies, whether fiat or crypto.
Kuo’s project sounds ambitious and promising, to say the least. The support and backing of giant industry figures like Coinbase, Huobi, and Pantera Capital show that Ampleforth is not just another DeFi protocol to make some money before the bubble of decentralized finance bursts.
Nevertheless, one thing that may keep Ampleforth back from reaching its goals is that it is not decentralized. While it is autonomous, the protocol is still in the Ampleforth Foundation’s hands, whose developers hold two-thirds of the entire supply of tokens. It is as if the country’s government would hold more than 60% of all the money traveling through its national economy.
Until it solves the decentralization problem, Ampleforth remains an ambitious DeFi protocol that stands out among the others but needs to provide more long-term guarantees to its users.