As the devaluation of the US dollar becomes a hot topic, KryptoSlate spoke to the founder of “Rebasing Cryptocurrency”, which is supposed to fight the inflation curse.
Ample (AMPL) is a protocol that runs on the Ethereum (ETH) blockchain that encourages a network of users to maintain a cryptocurrency worth around $ 1.
Maintaining price stability
“We created AMPL as an indestructible unit of computation because we recognized early on that the algorithmic stablecoin approaches are very fragile,” said Ampleforth founder and CEO Evan Kuo KryptoSlate, adding that “the graveyard of failed decentralized stablecoins” has already proven this.
Because of its method of maintaining price stability, AMPL is different from Stablecoins that rely on deposits or the issue and repayment of debt instruments.
The protocol is elastic and non-dilutive and adjusts the supply of AMPL every 24 hours in a process known as “rebasing”, whereby everyone who has tokens changes the balance in their wallets at 2:00 UTC every day.
The protocol needs to know the price of AMPL and whether it has deviated from the US dollar in order to properly adjust the supply, that is, if the price rises above the target, the total supply increases, and if the price falls below the target, the supply shrinks, the users always keep the same share of the total cache.
“In the future, we’ll see ways to separate AMPL price volatility from supply volatility,” said Kuo, adding that “the first real taste of AMPL is on.” AAVEbut there is much more to come, and it will undoubtedly shape the way people think about application design. ”
$ AMPL on $ AAVE is officially LIVE !! 🎉🥳 # Ampleforth rebases daily at 2 a.m. UTC
(10 p.m. EST) pic.twitter.com/YERxdg8V6Y
– Ampleforth #AMPL (10,002) (@AmpleforthOrg) July 24, 2021
The unsecured crypto ideal
Kuo recently addressed on Twitter how AMPL’s price target has changed over the past two years, including inflation, from $ 1 two years ago to $ 1.051 today.
Quite interesting to see how inflation unfolds this way.
I used to think of it as an invisible and abstract force. That was his great strength and weakness.
As a course goal in our protocol, it is visceral. @ AmpleforthOrg @mrinconcruz @brandoniles @ aalavandhan1984 https://t.co/Q8tTUdHJQP
– Evan Kuo 🔑 (@evankuo) August 3, 2021
According to Kuo, a cryptocurrency that relies on traditional collateral like the US dollar would have a hard time holding a fixed reserve rate if the underlying asset were hyperinflated.
“A key benefit of AMPL is that it is unsecured,” said Kuo, adding that “it will allow it to sustainably return to the US adjusted USD price target for 2019 of the consumer price index (CPI).”
$ AMPL handles this with PCE. Glad to see that people are getting noticed. But the basket as a target price is not the challenge.
The beauty of being unsecured is that you can have a “flat” target price without the risk of ever being undercollateralized in a reserve. https://t.co/NQeKVZdJDs
– Evan Kuo 🔑 (@evankuo) August 5, 2021
“I think there is a solution to the decentralized stablecoin dilemma around the corner, but the people in the room don’t think so right now,” Kou said KryptoSlate, adding that “the approach that will ultimately work is crypto-backed”.
The course objective isn’t the hard part, guys …
We need collateral in the chain that is 1) not prone to price inflation and 2) having predictable volatility
One solution is to split the risk of unsecured cryptocurrencies into tranches @mrinconcruz
– Evan Kuo 🔑 (@evankuo) August 5, 2021
According to him, “there will be opportunities to re-segment the risk of unsecured assets like AMPL and Bitcoin (BTC) to create secure asset collateral that is used by the issuer of stablecoins as an alternative to USD coin (USDC). “
As Kuo pondered the current stablecoin market and increased control over the sector, he noted that “the regulation draws attention to the fragility of space today.”
“The irony here is that all of this innovation, the secret of today’s cryptocurrency, is simply the US dollar,” he added, saying that “thankfully it won’t be forever.”
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