Ampleforth Defi Coins Review – A Detailed Review About Ampleforth

What Is Ampleforth?

Ampleforth is a cryptocurrency which adjusts its supply based on demand. Ampleforth is built on the Ethereum blockchain as an ERC-20 token and each AMPL token is referred to as an Ample. When demand goes up, the total supply of AMPL increases and when demand goes down its total supply decreases.

This is done to maintain purchasing power regardless of economic pressure (the same “dollar value”). These supply adjustments are made directly to all AMPL wallet balances which maintain the same percentage of the total AMPL supply regardless of the raw numerical change.

Ampleforth is often misunderstood to be a stablecoin. While the aim of Ampleforth is fundamentally to provide the same function as a stablecoin, it is not backed by US dollars like USDC nor any locked Ethereum assets like MakerDAO’s DAI stablecoin.

Quick Fact About Ampleforth

How does the protocol work?

The Ampleforth protocol translates price-volatility into supply-volatility. This means the number of AMPL tokens in user wallets automatically increases or decreases based on price:

These supply adjustments are called “Rebases” and rebases occur once each day. When the AMPL network grows you’ll automatically have more tokens, when the AMPL network shrinks you’ll automatically have fewer tokens, but the price per AMPL will tend to cycle around $1. This novel rebasing mechanism is what allows AMPL to be used in contracts.

AMPL Price Analysis

Ampleforth has a price history unlike any other cryptocurrency. Since its introduction to crypto markets in June of 2019, the price of AMPL resembles that of a stablecoin and has hovered between 0.50$USD and 1.50$USD.

The recent spike in demand for AMPL has seen its price rise to over 4$USD per token and has been well over 1.50$USD for over a month. This may seem incredibly bizarre given that AMPL is designed to stay between 0.96$USD and 1.06$USD.

The reason why the price of AMPL has remained so high is because the demand for the token has been outpacing the rate at which the protocol is able to adjust its supply. This is because the protocol modifies the total supply of AMPL as if it were doing so over a 10 day period which constantly “resets” every day (assuming that demand is continuing to increase or decrease at a rapid pace).

Therefore, it is important to include the market cap curve of AMPL when examining its price. As you can see, the market cap of AMPL has increased substantially over the last month. This is due to the increase in supply to meet the demand.

What do we mean by Stable Contracts?

Let’s go through a simple example. Imagine Evan and Micah enter into a bet:“If the Lakers make it to the 2021 NBA conference finals, Micah will pay Evan 10 coins.

What Makes Ampleforth Unique?

Ampleforth Defi Coins is unique in that it aims to provide a truly non-correlated asset that can be used for diversifying cryptocurrency portfolios, as a reserve collateral for decentralized finance (DeFi) applications and eventually as an alternative to central-bank money that is resistant to shocks.

Because the Ampleforth supply is unaffected by inflation or any other dilutive factors, it is uniquely positioned as an asset that is able to maintain its purchasing power against other assets. This makes it attractive as a hedge and as an alternative to fiat currencies suffering from rampant devaluation.

How Is the Ampleforth Network Secured?

As an ERC-20 token, Ampleforth is built on top of the Ethereum blockchain, and benefits from the strength and security that comes with its extensive node and miner network.

Beyond this, the integrity of the network is maintained by a decentralized network of oracles, which are used to feed in the price data used to determine whether there needs to be a positive or negative rebase.

Until December 2019, Ampleforth was previously the only oracle provider used to source market data, but it has since integrated Chainlink oracles for the same purpose — helping to avoid the centralization of oracle data. Now, data from multiple aggregators is used in the logic behind the rebase function.

Where Can You Buy Ampleforth (AMPL)?

Ampleforth tokens, sometimes known simply as amples, can be purchased and traded on well over a dozen cryptocurrency platforms against both other cryptocurrencies and fiat assets. As it stands, KuCoin is the most popular centralized exchange for AMPL, whereas Uniswap is the most popular decentralized exchange for AMPL.

If you’re looking to purchase AMPL or other cryptocurrencies with a credit or debit card, check out our simple guide to get started.

Frequently Asked Questions About Ampleforth