How AMPL Started The DeFi Summer of 2020 [Part 1]
Do you remember the DeFi Summer of 2020?
I know I sure do.
It was a historic moment in crypto history. It was the start of the DeFi revolution. And it put crypto in the spotlight. Bringing many new entrants and big money into this space.
See where it all kicked off? See what happened in the months following?
That’s why the DeFi Summer of 2020 was such a big deal. And that’s why there’s all this chatter of a potential DeFi Summer 2021. Or, as some people like to call it, DeFi Summer 2.0.
But how did it all start? What was the catalyst?
If we want a DeFi Summer 2.0, we need to understand how the first one began.
Lucky for you, I was there when it all started. And I remember how it began.
Now let’s dive in.
Ampleforth (AMPL) kicked off DeFi summer with Ampleforth Geysers — a liquidity mining program that incentivized on-chain liquidity. Ampleforth Geysers rewarded $AMPL rewards to those who provided liquidity only on Uniswap at that time.
The Geysers launched on June 23, 2020, and really took off in July, setting the stage for DeFi summer.
If you’re feeling a little surprised or uncertain by this right now, I don’t blame you. At the time, $AMPL did not receive the coverage it deserved. I think it’s because $AMPL was widely misunderstood. People weren’t sure if it was a scam or legit. So instead of Ampleforth, Compound stole the spotlight.
For this reason, some will argue it was Compound who kicked off the DeFi Summer with the release of its $COMP token on the 17th of June 2020 and subsequent liquidity mining (yield farming) program.
However, that’s just simply not the case.
But don’t just take my word for it. Let’s let the numbers speak for themselves.
See below the historical DeFi data that reveals where the money really was in July 2020:
Take a close look at the volume profiles and numbers highlighted on the charts for July 27, 2020. Also, take a look at the total liquidity.
What do you see?
Ampleforth’s $AMPL volume on Uniswap was over $62,000,000 while Compound’s $COMP volume was just $984,000.
Unbelievable, am I right?
The reason $AMPL’s volume was so high during this time is because of the Ampleforth Geysers I mentioned earlier. The Ampleforth Geyser liquidity mining programs on Uniswap have been absolutely huge.
They have raked in $4,524,625 in total liquidity on Uniswap, while $COMP has brought in just $2,779,996 in liquidity.
$COMP did not start the DeFi Summer of 2020. It was $AMPL.
At one point, $AMPL was Responsible for 50% of Uniswap’s Volume
Not only did $AMPL kick off the DeFi summer of 2020. At one point, it was responsible for nearly 50% of Uniswap’s volume.
As seen in Uniswap’s volume profile above, on July 27, 2020, Uniswap had a total volume of $139M. And more than $60M of this volume is attributed to $AMPL:
Again, this huge surge in volume can be attributed to the Ampleforth Geyser program — which has since been replicated by nearly every project in DeFi.
The First One Through The Door Gets Shot
DeFi people back then couldn’t believe their eyes. $AMPL entered the top 30 on CoinMarketCap. Reaching as high as 28 with a market cap of $603,167,882; a circulating supply of 211,039,746 $AMPL; and a token price of $2.86 per $AMPL.
It was a sight to behold for us $AMPL believers. Pretty sure even the founders of $AMPL themselves didn’t anticipate that $AMPL boom when they launched their geysers.
In that short period of time, fortunes were made.
But many who didn’t understand $AMPL mechanics re; supply expansion/contraction got burned heavily. Many called it a scam (losing the number of tokens you hold was, and still is, something new to people).
For this reason, many people never looked at $AMPL again. And heck, $AMPL is still recovering from the first great expansion that can be clearly seen on the supply chart:
The Copycats
In the crypto space and business in general, when something performs well, it gets replicated soon or later.
So naturally, $AMPL’s first great supply expansion sparked a wave of $AMPL clones with tweaked mechanics like bonds, coupons, and fractional reserve.
Or in other words, projects trying to add their topping on $AMPL and see if they can make it work.
But guess what?
These mechanisms for so-called coupon/Seigniorag stablecoins simply do not work.
- $YAM — born August 11, 2020, died just one day later when a critical bug in its code locked all funds that were supposed to be distributed by the protocol. The team launched two versions since then, YAMv2 and YAMv3, all have failed miserably.
- $BAC — born November 30, 2020, died January 9, 2021, when it broke beneath $1.00 and fell lower ever since. $BAC uses an algorithmic central bank that issued bonds/coupons.
- ESD — born November 2, 2020, died December 27, 2020, when it too broke below $1.00, falling to less than $0.05, where it resides today. $ESD uses coupons that are priced at a discount and can only be bought by burning ESD, reducing its supply.
The list goes on.
Will $AMPL Kickoff DeFi Summer 2.0?
People are impatient. The next DeFi summer will surely happen. But it might not happen just yet in the actual summer period, as we know. The conditions have to be just right. And when they are, it will happen suddenly. At the moment people least expect it.
Let’s take a look at $AMPL’s supply chart again:
The supply of $AMPL is still in a long consolidation period after the 1st great expansion. Yes, it’s been consolidating for what seems like forever.
But mark my words. Big things are coming.
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