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An Introduction Of Ampleforth Project in DeFi

BitForex Editor
Oct 14, 2020

Banking has extended recently from transactions in traditional banking halls to the Defi grounds. The glamorous outlook of modern-day banking seems undeniable but there is a new way to invest. Decentralized Finance strays away from the common centralized financial institutions.

The Ampleforth project is one that changes the face of DeFi. It changes a lot about cryptocurrencies and peers into the future. This initiative comes on the back of other successful DeFi platforms like Compound, Aave, Synthetix, Uniswap, and a host of others. Behind these successes have been a couple of hitches, and Ampleforth is more or less fashioned as a solution provider.

Coming Into Being

Ampleforth was founded by Evan Kuo, an engineering graduate of UC Berkeley and former CEO of Pythagoras Pizza. The pizza chain still stands as the first of its kind with tokenized operations. He was heavily spurred by his interests in tech and finance, two sectors that the cryptocurrency scene combines. So he decided to change the narrative about banking and money, however, the latter seemed easier.

With his glowing idea, he founded the Ampleforth foundation which has various individuals affiliated from Ivy League universities as members. The starting capital accrued was massive with almost $10 million in raised funds. The following institutions threw in monetary support:

1.True Ventures.

2.Pantera Capital.

3.Brian Armstrong.

The Ampleforth Protocol And Token

 The Ampleforth protocol is dependent on the Ethereum blockchain and has its token. The token is named $AMPL and is unique for its ability to strike a balance between inflation and deflation. Supply and demand of the token move in the same direction. When demand falls, supply falls, and vice versa.

 This singular quality makes one quickly liken it to a stablecoin, but such a conclusion is rather quick. AMPL is neither backed by fiat currencies not by cryptocurrencies. So its rise and fall stand solely on how the token is traded. Besides, stablecoins maintain a narrow range of value variations. AMPL's value has risen as high as $3 at its peak. Recently though, it has stood below the $2 mark consistently.

Autonomous but centralized, the Ampleforth foundation has control over the system and can take or seize assets. Also, it can wield influence on the token supply on the platform. Therefore, pure decentralization lovers won't desire to venture.

The Monetary Policy

The monetary scheme Kuo invented for Ampleforth was subjected to his evaluation of the US dollar bill's history. The token covers the downsides of the gold-backed and fiat-printed phases of the dollar and finds a stable ground.

Initially, every dollar bill was supported by gold bullions, a great store of value even now. Unfortunately, the supply is unpredictable, and it is prone to runaway deflation.

The aftermath of World War saw the gold standard dumped as the US Dollar was in massive demand and could not meet up. The amount of gold remained constant and mining was not introducing enough gold to meet the yearnings of people. Eventually, the fiat US Dollar was introduced.

Up till now, the solely printed notes have their problems. Dollar notes can only be produced and not destroyed so more and more notes go into circulation, a one-way process. A move towards partial control, however, like artificial scarcity lasts primarily in the short-run. Corruption and other malpractices within minting facilities also pose periodic problems.

Instinctively, the AMPL protocol widens its supply to match the hike in the  AMPL token's value. This stability process is known as rebasing.

Rebasing

Rebasing is a basic feature of AMPL that regulates the supply of tokens. Every 24 hours, the amount of tokens in each wallet is either reduced or increased based on the weighted average token price over the stipulated time. However, the initial rebase is an exception as it is implemented after 72 hours. These regulations occur at 2:00 UTC (Coordinated Universal Time) daily and are reflected in account reports as "AMPL rebase". Price information is extracted by the oracles of Ampleforth and Chainlink from Kucoin and BitForex.

Ampleforth Geyser

In collaboration with Uniswap, Ampleforth has created an opportunity that encourages liquidity providers to invest in the Uniswap pool. Investors are rewarded with AMPL tokens for moving AMPL to Uniswap. The longer they leave the AMPL in Uniswap, the more tokens they receive from the pool.

Geyser requires interested people to link a Metatask or Coinbase wallet in its web portal and make equal deposits of ETH and AMPL to qualify them for participation.

Use Cases

Ampleforth is useful for investors both in short, medium, and long term fronts. In the short term period, it allows people to have variation in cryptocurrency portfolios. Bitcoin is the yardstick many cryptocurrencies follow, but, with the rebase mechanism, AMPL is set apart. Bitcoin investments reek of volatility and "buy and hold" culture; the uncertainty is a tight rope walk.  AMPL introduces diversity, different from the norm.

 On a medium-term basis, Ampleforth creates a dependable currency for investment or collateral in decentralized banks or DeFi apps. In the absence of underlying assets, AMPL runs at lower risks of devaluation and, in turn, minimal losses.

In another vein, Ampleforth strives to become the improved Bitcoin. It absorbs shocks caused by fluctuations in the market. This attribute is competing with similar qualities given off by some world currencies(USD, JPY, EUD), Bitcoin, and XRP.

Traders are also sure that their investments are worthwhile because they can make profits during a price increase. When the price comes falling, they can garner more AMPL investments and patiently wait to harvest.

How To Make $Ampl Tokens?

The rebase policy automatically makes those on AMPL gain tokens. Also, decentralized exchange (DEX) platforms with AMPL on their lists are other sources. A few of them are;

1.BitForex

2.Uniswap (v.2)

3.Kucoin

4.FTX exchange

Recent News About Ampleforth

Predictions in July 2020 have pointed out AMPL to prove bullish in the development of Ethereum and give it a vast audience. Surprisingly, even though the Ethereum blockchain houses the "stablecoin", it doesn't have significance in AMPL transactions.

As of September 2020, an upsurge of 77% in AMPL/USD price saw it reach about $1.28. Although rejection from sellers brought about a reversal, it remained 28% above the opening price for the month—a testimony to AMPL's stability. The price movements allow investors to sleep with both eyes closed.

Conclusion

AMPL has made a mark in the scene of money dynamics within its little time of existence and, in the nearest future, it will be more tangible in the money market. As a DeFi venture, AMPL tends to get more attention. Presently, about 36 million AMPL has been deposited in Geyser which speaks positiveness in every way.

In the bid to take over the world, AMPL is strongly competing with other currencies, digital and fiat, to gain superiority. With users' trust earned and legal regulations fixed, the ultimate goal of AMPL is within reach in no time.

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