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5 Highlights From Stablecoins Are Killing It Special Edition — “WTF Is Ampleforth?” Conf Call 8/19/20

Like everything else in crypto, Ampleforth is an experiment, backed by some of the smartest people in crypto.

It’s an experiment to see if they can create a stablecoin and a means of exchange via rebasing? When I first looked in to Ampleforth, I thought it was nonsensical. But I thought that about Bitcoin too. After reading the great posts “The Rise and Fall (and Rise and Fall) of Ampleforth — Part I & Part II”, written by University of Oregon Professor Stephen McKeon and his Collab+Currency partner Derek Edward Schloss, I wanted to spend an hour with them digging deeper into this experiment to understand Ampleforth better, and the whole rebasing/“Supply Elastic” concept which is spreading (see $Based).

You can watch the whole show below (it’s an hour well spent):

Or you can read my 5 highlights below:

1. While The Ampleforth Token Was Launched in June, 2019, It Garnered Modest Interest Until Their Liquidity Mining Incentive Was Introduced On June 23rd, 2020

Ampleforth’s $5.7 million market cap on June 23rd went up 100X+ over the next five weeks, peaking at $600M+ on July 27th

2. Supply Elasticity Is The Defining Element Of Ampleforth

The supply of Ampleforth tokens in wallets can change every night at 7pm EST is a “rebasing” event. The rebasing is achieved, not through an airdrop, but a function of the smart contract, which leaves everyone with the same % of Ampleforth, but the number held could change. The rebasing is meant to achieve “a degree of stability around a target price”. If the Ampleforth price is more than 5% away from the target price (of a 2019 dollar), it gets rebased based on the following formula:

This means that the downside rebase is capped at 10% as it can’t trade more than $1 away from the peg on the downside. So the rebasing formula can be seen graphically below:

3. Ampleforth/Rebasing Is Really Unlike Anything That Has Come Before

Stephen compared and contrasted Ampleforth/rebasing to other investments, with the bottom line being that nothing is really even closely comparable to Ampleforth/rebasing.

4. We’ve Seen The Impact Of The Short Term Drivers Of Demand For Ampleforth, The Long Term Demand Is TBD

Ampleforth’s market cap rocketed skyward following the introduction of the Ampleforth liquidity mining reward program, Geyser, which stacked three incentives on top of each other. For users that provided Ampleforth liquidity on Uniswap they got 1) 30 basis points per trade from Uniswap, 2) Ampleforth tokens based on the amount of liquidity provided, and 3) Ampleforth rewards based on the length of time the liquidity was provided.

Geyser created a deep and liquid market for Ampleforth, which bootstrapped a rabid community of speculators based on FOMO. While FOMO generally results in the rapid rise and more rapid falls we’ve seen in Ampleforth, Geyser also helped the Ampleforth Telegram community grow to more than 12,700 members, which is a very valuable asset.

The most interesting demand driver, with the largest potential, is the rising economic utility (as commodity money). That’s the goal. Will it get there? We all get to watch the experiment in real time and see.

5. The Competition For Commodity Money Will Create Better Forms Of Money & We’ll Get There Through Experiments Like Ampleforth

Ampleforth is really trying to be a “Unit Of Account”, as at it’s target/peg, Ampleforth always gets you the same amount of goods for the same amount of Ampleforth. If it’s able to achieve that, if it’s able to stabilize near it’s peg, it has a chance of becoming a Medium of Exchange and/or a Store Of Money.

Stephen talked about Brazil’s URV experiment in 1994 which resulted in a new currency that evolved from a unit of account.

If you thought this was worth at least .000001 Bitcoin, please clap below (up to 50 times). Thx!

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Lou Kerner

Believe Crypto is the biggest thing to happen in the history of mankind. Focused on community (founded the CryptoOracle Collective &CryptoMondays)