AMPL or ETH? Why Ampleforth makes more sense as stablecoin collateral

Documenting AMPL
3 min readSep 26, 2022


I think Ampleforth remains more important than ever. I don’t get why people aren’t making enough of a fuss about it given what the team is creating — I guess people want a quick buck more than anything, so they end up going for the next immediate craze.

It’s not just yet another token in the market, it’s an actual cornerstone of the new wave of finance, a composable DeFi building block that can be used to denominate stable contracts in the form of a new monetary standard. $AMPL is better collateral than bitcoin/ether/stablecoins.

$AMPL has always been a one-of-a-kind asset — but now $SPOT is really going to be showing the wider cryptocommunity how important the ecosystem actually is. We’ll get to the SPOT perpetual note in a minute, for now I want to turn your attention to why AMPL is better stablecoin collateral than ETH.

$AMPL is Resistant to Volatility

So there are lots of assets being used to back stablecoins now, and it’s a legitimately good question to ask why ETH wouldn’t make better sense as stablecoin collateral.

But the answer to that is fairly obvious if you actually take a look at the Ampleforth design and the market behavior for ETH and its derivatives. First, Ampleforth’s very design is intended to create a resilient and safe ecosystem, free from the troubles that have destroyed other ecosystems.

With ETH and other assets, however, price volatility can be totally destructive — these tokens simply cannot handle the wild price shocks that the market brings. ETH liquidations can sometimes go over $100 million+ (and on really bad days it can be MUCH higher) and this can wreck entire ecosystems.

$AMPL not so much.

So What is Ampleforth’s $SPOT?

Now why bring all of this conversation about AMPL backed stablecoins up? Because of $SPOT.

$SPOT is a new innovation being developed at Ampleforth and this is where I think the fun really begins. It is a perpetual note that is backed by AMPL derivatives that has many properties of today’s stablecoins but is not pegged to a particular value. As the documentation says,

price will likely float within a range similar to AMPL and you can think of SPOT as a derivative that strips away most of AMPL’s supply volatility.

Okay, so technically $SPOT is not a stablecoin, even if I like to describe it that way. Think of it as more of a store of value that resists inflation. Other things worth noting are:

  • $SPOT is an ERC-20 token.
  • It will not rebase and holders are not subject to supply volatility.
  • It will be governed using the FORTH token.
  • Like $AMPL, it is intended to be used as protection from volatility and inflation.

Keep an Eye on $SPOT

There should be more information on $SPOT and how it works in the days to come. The team is currently wrapping up the whitepaper and it shouldn’t be long before we have all the info we need. In the meantime, I highly recommend you check out the available documentation and head over to the Discord — you can ask all the particulars there.