Documenting AMPL, SPOT 2023 Annual Review

7 min readDec 31, 2023

TL;DR

In 2023, the Ampleforth ecosystem made remarkable strides within DeFi, proving to the world that durable, decentralized, on-chain money is possible. This money is called SPOT — the first successful CPI-adjusting currency based on an ingenious collateralization model that utilizes the elastic commodity AMPL. As a result, AMPL saw its market cap swell by 90% in Q4 to over $100 million, while SPOT rose to a comfortable on-chain total of 797k SPOT minted with a market cap of nearly $1 million.

Notably, the SPOT Rollover Vault captured significant ecosystem value, securing 8.75% of the AMPL supply. SPOT’s structure and vision as a flatcoin — eschewing high APYs, bailouts, or pegs — demonstrated a successful experiment in balancing inflation resistance with currency stability. How the world will react to this as new features are rolled out to stimulate its growth in 2024 will determine to what extent flatcoins like SPOT become a core narrative of the 2024 bull run.

In our final publication of 2023, we offer a review of the past year, a summary of Q4 performances, and a look into the Ampleforth ecosystem as we enter 2024 ⬇️

A Year in Review

SPOT officially launched in December 2022, just over one year ago from today. This release sparked massive interest in AMPL, allowing AMPL to see its first meaningful appreciation since the 2022 bear market.

The release of SPOT came on the heels of the most significant USD inflation in decades, with YoY inflation hitting a high of 9% at its peak. We now know that the USD experienced a massive debasement of nearly 23%, with the worst inflation occurring in 2021. This added fuel to the fire that created the flatcoin narrative, with SPOT leading the way.

In Q1 2023, SPOT was immediately put to the test. The early 2023 banking crisis led to the failure of Silicon Valley Bank, a popular choice among West Coast tech companies. One of those companies was Circle, the creators behind USDC.

When Silicon Valley Bank failed, Circle lost an estimated $3 billion worth of reserve capital, leading to a sell-off in all stablecoins (including SPOT). However, SPOT returned to normal pricing extremely quickly without any needed third-party interference. This event showcased that SPOT could, in fact, remain stable as a decentralized currency, even through economic shocks.

The hype died down significantly in Q2, with AMPL largely entering another decline following the runup during the SPOT launch. Despite the dollar value decline in AMPL, SPOT continued to see new tokens minted, expanding close to today’s total supply level of nearly 800k SPOT on-chain.

Lastly, in Q3, AMPL found its bottom in market cap under $20 million, setting up the major rebound that we experienced in Q4. Just last quarter, the SPOT Rollover Vault went live and held an initial total of 700,000 AMPL (approximately 2.9% of the total AMPL supply).

Q3 also saw the launch of Poolisde, a specialized DEX that was specifically built to handle rebasing assets and value-accruing tokens like AMPL. Additionally, a Base-native lending platform called Seamless was launched with assistance from Ampleforth. There remain ongoing efforts to give wrapped AMPL (wAMPL) listed on Seamless as a borrowable asset.

Performance Summaries

AMPL

Overall, AMPL’s market cap exploded this year, reaching values not seen since February 2022 after the bull market top in 2021. At its peak in 2023, AMPL found a market cap valuation of $126 million and currently sits at a total supply of over 107 million tokens. AMPL’s market cap is up 90% since last year, rising over $52.5 million in market cap.

All of this growth was captured in Q4, specifically from October until today, where AMPL effectively did a 4x in value from a bottom of $26 million to over $100 million in December. This has been punctuated by the longest-running cycle of daily rebases without a contraction since DeFi summer of 2020 when AMPL rose from $2 million to over $700 million in value.

stAMPL

For stAMPL (shown as Rollover Vault Note on Etherscan), there are 143 total token holders at a total supply of 2,260 stAMPL tokens. This represents the current $11 million in value and 9.5 million AMPL tokens. As discussed above, the Vault has captured nearly 9% of the entire AMPL supply, doing so without additional promotions or incentives.

With expectations of a bull market returning and stAMPL holders continuously on the rise, the Vault looks poised to continue capturing additional supply of AMPL, with projections for 2024 reaching upwards of 10%+.

We analyzed multiple investment strategies in 2023 surrounding the Vault versus traditional AMPL and found that, in terms of capturing network ownership, the Vault provided its stakers with 15.4% more network capture than traditional AMPL over a 30-day period in November.

You can find the full investment analysis here:

SPOTLight Series 2: Analyzing Gains Captured by Vault Stakers During Latest AMPL Rebase Cycle

SPOT

The greatest takeaway from SPOT’s first year being live on-chain is its demonstration that durable, decentralized, inflation-resistant money is a feasible achievement. SPOT is sound money and now has over $11 million in value backing it.

In terms of stability, SPOT has rarely moved its price for the majority of the year, especially since it expanded to 700,000+ tokens minted. For most of the year, SPOT has trended around $1.14 per token, slightly below AMPL’s own price target of $1.17. Q4 has been notably stable for SPOT, with little price action occurring (at equally low volumes, however).

This is a major win because, throughout the majority of 2023, SPOT’s sole collateral, AMPL, was largely in decline. The fact that SPOT also did not crash or lose value is a testament to the potential of tranching and risk segmentation, giving increased value to elastic assets like AMPL.

Now, there is one glaring shortcoming to SPOT — the mint cap has remained low, along with volume. In essence, little volume is present on-chain in SPOT on any given day. This has more or less led to stagnation for the majority of Q3 and Q4.

Currently, there is a lack of incentives to actually mint new SPOT, which, of course, has been hindering the liquidity of SPOT on-chain. To mint SPOT is inherently expensive. For every 1 AMPL, a holder can mint 0.24 SPOT and receive 0.75 AMPL-Z tranche.

With that in mind, it is recognized by the Ampleforth team that the majority of users will never be required to utilize the Mint function. But how?

Vault V2, expected sometime in early 2024, will counteract these problems and incentivize arbitrage (i.e., when there is a price discrepancy between AMPL and SPOT, as 1 SPOT should equal 1 AMPL). With minting incentives, there will be a surge of circulating SPOT on-chain, helping to permanently solve the liquidity problems of acquiring large quantities of SPOT off DEXs like Uniswap or for large centralized exchanges needing to acquire significant amounts of SPOT to list.

Keep an eye out for more information regarding coming updates from the team in 2024.

Onward to 2024

We are heading into 2024 with lofty expectations, putting a successful 2023 behind us. There are more updates and tools to come that will further increase the utility and scalability of the Ampleforth ecosystem, helping to expand the reach of SPOT.

To catch up on Documenting AMPL content, feel free to check out our top publications from 2023:

To stay immediately up to date with Ampleforth announcements, be sure to join the Discord and follow Documenting AMPL on X.

Lastly, we would like to extend a very big thank you to everyone who read our posts, engaged with our content, and followed us on X in 2023. There are some great things planned for the coming year, and we are excited to share those with you soon!

See you in 2024!