Ampleforth Partners with Asymmetry Finance to Power afUSD, a Fully Decentralized Synthetic Dollar
Ampleforth has partnered with Asymmetry Finance and Paid Network to introduce afUSD, a fully on-chain synthetic dollar. Asymmetry Finance, a cutting-edge staking and synthetic dollar protocol, aims to provide the highest sustainable yields in the DeFi market, and afUSD is the latest addition to its impressive lineup.
Introducing Asymmetry Finance and afUSD
Asymmetry Finance is a staking and synthetic dollar protocol pioneering assets centered around offering users high, sustainable yields. Some of these offerings include afETH, which offers competitive yields on Ethereum staking, and, soon, afUSD, Asymmetry’s synthetic dollar.
afUSD is highly unique in that it leverages Ampleforth’s elastic supply mechanism to greatly improve its scalability, stability, and overall durability. For those who don’t know, AMPL is an elastic supply token — meaning that it is volatile in supply.
As demand increases for AMPL, its supply rebases (meaning it expands or contracts) to keep 1 AMPL equal to 1 USD (adjusted for inflation since 2019). This makes AMPL a durable, inflation-resistant unit of account.
The highly scalable nature of AMPL’s supply will allow afUSD to grow its own supply to meet demand far easier than any rival projects, including Ethena’s USDe. The absence of oracles and reliance on Ampleforth’s well-established supply adjustment mechanism also enhances its security, making it resistant to manipulation and market shocks.
In short, utilizing Ampleforth will make afUSD extremely competitive versus market competitors such as Ethena’s USDe. This is because afUSD will be highly decentralized, infinitely scalable, and extremely resistant to negative market forces.
What Does this Mean for Ampleforth?
To keep afUSD stable, it will be collateralized on-chain with AMPL. Thanks to a concept called tranching, AMPL’s own volatility can be resegmented into higher or lower volatility derivatives. The lowest volatility derivative of AMPL is SPOT, a durable flatcoin.
SPOT is a low-volatility asset because it is heavily insulated from supply adjustments, meaning that normal everyday volatility in AMPL’s supply won’t reach SPOT, making it highly stable. This, in turn, makes SPOT excellent collateral for afUSD as it allows afUSD to be decentralized and extremely durable.
For the Ampleforth community, demand for afUSD will automatically equate to higher demand for SPOT, which leads to higher demand for AMPL, resulting in supply appreciation. As demand for SPOT increases and decreases, AMPL stakers can also benefit from this increased volume through fee captures.
Overall, this is highly bullish for both Asymmetry and Ampleforth and will ultimately provide DeFi with even more options for legitimately decentralized, stable assets to preserve wealth on-chain.
Explore Asymmetry Here: https://www.asymmetry.finance/
Explore Ampleforth Here: https://www.ampleforth.org/
Learn About The Ecosystem: https://www.documentingampl.com/docs
