Did you know Ampleforth is a village in North Yorkshire, England? Just kidding, that’s not the Ampleforth we’re talking about today. Chances are, if you’ve been into cryptocurrency for over a year, you’ve heard of Ampleforth (AMPL) before. Or, maybe you’ve even bought some AMPL already.
AMPL grew from a $13,500,000 market cap on June 29th to a whopping market cap of over $700,000,000 on July 27th, 2020. Giving massive returns to those who got in ‘early’ and enjoyed daily positive rebases for almost a month in a row. Currently, AMPL is sitting at a $303,000,000 market cap still up well over 18000% this year. So, what does this project do? Why is the token so different from your typical token/coin? And, what has the past year been like for Ampleforth?
AMPL is a cryptocurrency like Bitcoin, the major difference is that the AMPL supply is elastic and changes daily. One of the best explanations about the daily rebase I found in this post on Publish0x.
AMPL is non-dilutive meaning that these daily supply changes are applied to every wallet – meaning your ownership % of the supply is fixed. If you own 1% of the supply, then you’ll always own 1% of the supply. Unlike fiat, where the fed prints a whole bunch of money, devaluing the currency, leaving the majority of the holders with decreased purchasing power (inflation).
The supply changes are based on supply and demand, the protocol works so that the price always gets back to an equilibrium. When the price is high, wallet balances automatically increase. When the price is low, wallet balances automatically decrease. This happens once a day at 02:00 UTC and is called a rebase. The rebase is based on the average 24 hour AMPL price. Full rebase history can be viewed in this spreadsheet.
You can find a timer and oracle rate (last reported 24h average price) in the Ampleforth Dashboard.
The rebase rates are fixed and the Ampleforth protocol has minimum governance involved. This means that no governance exists to make adjustments in the interest rates or supply. AMPL is an ERC-20 token and can therefore be integrated with many DeFi (Decentralized Finance) applications.
As the economics section on the Ampleforth website states: ‘’Supply elasticity allows for currencies to adapt to economic shocks. This is good for everyone’’.
I highly recommend you to read this page on elasticity: https://www.ampleforth.org/economics/. As it offers a perfect example and does an amazing job explaining why this all is so relevant to date.
The past year, I’ve seen plenty of people trying to trade AMPL based on TA, with price targets of $10+. Whereas these people might not take into account the elastic supply mechanism. I’ve been a holder of AMPL for a long time now. However, I’ve also been swing-trading my holdings. Rather than applying technical analyses on the token price, I’ve used TA to trade along with AMPL’s total market cap.
Normally, I’d take into account overall market conditions (BTC momentum, BTC Dominance). However, looking at historic price action it’s clear AMPL’s action doesn’t really directly correlate to the overall market. This is another reason I decided to apply TA to the market cap.
Besides trading AMPL, a large part of my tokens are stored securely on a hardware wallet. In one of my previous Quora posts I mentioned I could see AMPL in the top 20 market cap. This means the market cap would be around $1.8B USD. Currently the market cap is about $277M. This would mean a return of 600%+. This will however really rely on marketing and communication. An initial target to me would be to reach a $1B valuation, at which I could well see the price already fluctuate less and stay much closer to $1/AMPL, meaning it would take much longer to actively grow from there as the rebase % would be smaller.
Ampleforth introduced their Roadmap landing page, on which the past, ongoing and upcoming developments are shared. Important to notice is that a roadmap is typically a working project, meaning it’s subject to change in the future.
Major upcoming development: Multichain Ampleforth.
Earlier this month, on December 2, Ampleforth announced to expand beyond the Ethereum Network with three new blockchain integrations: Tron, Acala (Polkadot) and NEAR.
AMPL not requiring centralised collateral is the first fully independent multi-chain cryptocurrency. A major accomplishment which should further support the project’s growth. I’m especially interested in the integration with Polkadot, as I believe this is going to be one of the most fast-growing blockchain networks in 2021. The actual results are yet to be experienced, as these integrations are expected to go live over the course of the next few months.
Realistically, this should enable AMPL to be traded on more AMMs, (decentralized) exchanges that don’t support ERC-20 tokens, as well as continuous growth should open doors to new partnerships and possibly early listings on new (and major) lending platforms. The more AMPL will be used throughout different ecosystems, the more supply will be locked, allowing for faster growth as a result of less sell pressure and increased demand.I believe in the protocol and project, both are simply amazing. Ampleforth has a strong team and creditable investors.
My main concern lies with the supply allocated to the team and ecosystem. As these are subject to rebase as well, this could create huge sell pressure in the future upon unlock, as was speculated to have happened during the previous surge to a 600M+ market cap. Back in August I expressed these concerns (backed with etherscan transactions), which unfortunately did not receive clear answers or understanding from the then community admins. I don’t necessarily believe there were bad intentions, however, due to the kind of replies various community members (and I) received back then I decreased my exposure to AMPL. I’m still holding / trading a significant amount as I believe in the protocol, but hope such scenario won’t occur again.
It’s clear Ampleforth has a future, what the future will be like currently lies in both your and my imagination.
Trading and investing in cryptocurrencies (also called digital or virtual currencies, altcoins) involves a substantial risk of loss and is not suitable for every investor. You are solely responsible for the risk and financial resources you use to trade crypto. The content on this website is primarily for informational purposes and does not constitute financial advice.