AMPnet Trusted Synthetic—The Perfect Hedge

AMPnet
AMPnet
Feb 20, 2021 · 4 min read

Crypto is volatile, no question about it. This volatility makes and breaks fortunes, gives us both FUD and FOMO and keeps that sweet sweet dopamine coursing thorough our brains. Like Dr. Strangelove — we’ve stopped worrying and learned to love the bomb.

However — our fragile love affair with uncertainty lingers on an axiomatic assumption — we buy crypto when we want, and we sell it when we want. If a token in my portfolio starts a (seemingly) unstoppable nosedive — I want (I require!) a guarantee that I’ll be able to exit my position and save whats left to be saved. If, on the other hand I see a clear path to the moon and beyond — I count on being able to get in as soon as I decide to do so.

For the most part, the crypto market provides us with these assurances. The way we enter and exit our positions is through stablecoins. USDT, the most widely used stablecoin — had $120B+ of volume in the past 24 hours. That’s around as much as the leading ten cryptocurrencies combined! For those vary of the USDT scandals and looking for an audited coin — there is USDC with $7B in volume. For true DeFi warriors — there is MakerDAOs Dai — a decentralized, crypto collateralized stablecoin.

Obviously, stablecoins work great. But can we do better?

Cash and Cash Equivalents

A cash equivalent is a low-yield, liquid and low-risk (highly stable) asset such as a treasury bill, certificate of deposit from a trusted bank or short-term corporate debt. These assets are not tied to the US Dollar, they bear yield and are very low risk. Excluding some experimentation with yield-bearing stablecoins — the cryptocurrency market doesn’t have such an asset.

What if there was a way to exit your crypto position into a liquid, stable and yield bearing token? Something that would not follow the US dollar, but would retain its value in relation to real-world consumption objects such as food, shelter and transport?

Backed by renewable energy

Now that was a mouthful, so let’s break it down.

Imagine there exists a portfolio made up entirely of shares of solar and wind power plants. The investors hold rights to a fraction of the profits those power-plants generate. The rights to future profits from dozens or hundreds of these solar and wind power plants have been tokenized and bundled into a Synthetic ERC20 token which represents all of those investments. You can buy this token on a DEX and exit your crypto position into it.

For a cash equivalent status we need three things: Yield, Liquidity and Stability.

Yield — Let’s call this token $AAPX(RES1) (AMPnet APX, Renewable Energy Sources, Synthetic no. 1) — The average yield of an asset in this synthetic token is 7%, thus — the entire token returns 7% per year. The yields can be cashed-out each year, or they can be compounded by a smart contract automatically reinvesting the gains into $AAPX(RES1) projects directly.

Liquidity — This token is listed on all the major DEXes and can be used for LP-ing, exchanging from crypto and more. As a very stable token, it has a healthy liquidity supply.

Stability — The returns from a renewable energy power plant can be calculated for its 25–45 year lifetime, up to a 5% margin of error. As I’ve mentioned previously in this article — energy consumption is tied directly to world GDP, so tokenized renewable energy is an asset which is perfectly correlated to the economic activity on our planet — something fiat currencies only claim to do and only for one country (they claim to track the economic activity of the issuing economy — e.g. US Dollar, should track the economy of the United States)

When is this coming? AMPnet APX tokenizers have already contracted a $100M+ portfolio of renewable energy, with $15M already listed on the platform in the MVP stage! (Feb2021)

Backed by real-estate

We can easily imagine a tiered structure of real-estate backed Trusted Synthetics — ordered by their risk:

  • $AAPX(REUSLR1) — Real-Estate United States Low Risk Synthetic no. 1
  • $AAPX(REMR1) — Real-Estate Medium Risk Synthetic no. 1

While these assets would not be real cash equivalents as their value is far too volatile — in the eyes of a stock trader or a crypto trader — real-estate has a very low risk.

Lucky news for the prospective reader! AMPnet APX tokenizers have already contracted $75M of real-estate — with the first $1M going live within the month. (Feb2021)

Putting it all together

They’ll get — The Perfect Hedge.

Learn more about AMPnet and its APX protocol on https://ampnet.io. For collaboration details — contact us at info@ampnet.io

AMPnet APX

Real-world assets on #DeFi Protocols