Don’t let the global rank of #364 fool you into thinking that AMPL is worthless. In fact, AMPL has to be one of the most intriguing coins available on the market. Well, this may not be true as the crypto market always has some interesting assets. Still, the Ampleforth network is another example of how well the technology can be used to attain impossible results using creativity and Math. With its CertiK audits, Ampleforth (AMPL) really intrigues us, and the way it operates is something that you should be familiar with.

Ampleforth Overview

Cryptocurrency Ampleforth
Ticker Symbol AMPL
Price $0.9229
Price Change 24H +5.22%
Price Change 7D +3.64%
Market Cap $58,576,817
Circulating Supply 62,309,976 AMPL
Trading Volume $2,159,410
All Time High $4.04
All Time Low $0.2945
Ampleforth ROI -1.04%

Let’s dig deep into why Ampleforth is cool even at its current price? We will also look at the Ampleforth price predictions and whether or not one should be paying attention to this crypto asset. So let’s get started.

What is Ampleforth, and How Does it Work?

The official website of Ampleforth describes AMPL as a durable and fully-algorithmic unit of account. Now, you may ask, what does that mean? To understand all of this, we will elaborate on the Ampleforth protocol. The protocol was designed to create a synthetic commodity that will be uncollateralized. Unlike Bitcoin, though, the AMPL does not have a fixed supply. Instead, it would adjust supply daily in response to the price exchange rate.

The Ampleforth also lowers the market capitalization correlation to BTC and ETH. There were two scenarios that were likely to happen with such implementation. First, the AMPL could add value to the digital asset basket, thus reducing aggregate volatility if it were lowly correlated with existing digital assets. Second, AMPL could be used as a building block for broad DeFi applications, just like how physical commodities played a huge role in building historic financial markets.

But let’s look at how Ampleforth is different from stablecoins. First, it doesn’t rely on deposits or redeeming debt. The protocol adjusts the circulating supply of AMPL tokens every day in a rebasing process. If the demand is high for AMPL coins and a single token exceeds the $1 mark, the supply increases. The opposite happens if the demand is lower and the supply decreases. Thus, it maintains the properties of elastic and non-dilutive asset classes.

Therefore, as the supply changes, the users still hold the same proportion of the overall supply. Thus, the user will always hold the same percentage of the coin before and after the rebase process. A new coin called FORTH has also been introduced that seems to complete the ecosystem. You can visit the official link and claim it, but some conditions are to be met. The new token essentially transfers the power to the community to help improve the functionality and bugs that exist in the network.

The protocol has three states in its design that correctly adjust AMPL. These states are:

Expansion

When the AMPL price exceeds $1, the new tokens are generated.

Contraction

Additional tokens are removed when the AMPL price is less than $1.

Equilibrium

When the AMPL price is equal to $1, nothing happens, and equilibrium is maintained.

Use Cases of AMPL

Ampleforth was created as a way to bring cryptocurrencies assets to gig economy workers. This could be for people delivering Pythagoras Pizza, which was the founder’s original venture. The founders of Ampleforth are Evan Kuo and Brandon Iles, who founded the AMPL project in 2018. They raised capital from investors, including Coinbase founders and True Ventures, up to $4.7 million with their broad vision. The use case was simple, to create a coin that maintains price stability. The objective for Ampleforth was to create a truly non-correlated asset to deliver value that can be used as reserve collateral for decentralized finance.

This is achieved by expanding the circulating supply and contract in response to user demand. All this without diluting individual stakeholders. In this manner, it operates like gold because it was used as collateral before the dissolution of the Bretton Woods agreement. Since inflation and other factors don’t affect AMPL, it is unique that it is able to maintain purchasing power. This makes it great for hedging against risk and other similar factors.

The official website has provided its vision for the future of AMPL. These are:

To be used as Diversifying Assets.

This can allow traders or investors to secure themselves against downside protection from the market by hedging against it using a non-correlated asset. This is the near-term goal for the founders for now.

To be used as a DeFi Building Block.

With the solution to the inelasticity problem, the AMPL can operate in a way similar to gold and can be used as collateral by cryptocurrency projects. This way, it will act as reserve collateral in decentralized banks. This vision is for the medium term.

To be used as an alternative to Bitcoin.

This is the long-term goal of the AMPL token. Though the new token FORTH has arrived, the vision remains unchanged. The goal of the founders is to act as an alternative to central bank money. This long-term vision can be beneficial in the future of financial markets. With high speculation of Bitcoins, it might not be suited to act as a building block of the future financial market as it was never intended to solve those problems.

Features of AMPL

Unlike some features that other assets may lack, AMPL seems complete. For example, USD is elastic but is not bankless. DAI is both rule-based and elastic, but it is not bankless or non-dilutive. The BTC is rule-based, bankless, non-dilutive, and speculative, but it isn’t elastic. Ampleforth, cryptocurrency has all the features necessary for a building block of the decentralized financial future project. The AMPL has the following key features.

It Solves the Inelasticity Problem.

Similar to precious metals or other commodities with a fixed supply, cryptocurrencies are vulnerable to price shocks and cannot be used to denominate complex contracts. Complex economies cannot be built upon such foundations with such a system. Ampleforth has no such problem because of a direct solution to the supply inelasticity problem that balances everything out.

It Solves the Diversification Problem.

The cryptocurrency market today is heavily correlated. With no correlation to Bitcoin’s price pattern, AMPL is systematically safe by adding diversity to a homogenous cryptocurrency ecosystem.

It Solves the Dilution Problem.

Since AMPL is non-dilutive, supply adjustments are applied and are proportional to each wallet’s balance. The ownership percentage on the network is always fixed.