SPOTLight Series 1: How to Capture Profits from the SPOT Rotation Vault

Documenting AMPL
5 min readOct 16, 2023

The Ampleforth ecosystem is inherently complex, especially with the introduction of the SPOT rotation vault and the ability to resegment risk through tranches.

There are several options for investors available through the SPOT UI that can give traders a higher or lesser degree of exposure to the core functionality of the Ampleforth ecosystem: rebasing.


For those that don’t know — rebasing is a fancy term for volatility in supply. The AMPL token experiences a daily rebase depending on demand that will automatically adjust the supply to meet a designated price target of a 2019 USD, adjusted for CPI.

Thanks to a concept called tranching, this rebase can be resegmented based on risk into Senior Perpetual (SPOT) or Junior Perpetual (stAMPL) tranches. To simplify things, this gives investors three assets to consider:

  • Senior Perpetual (SPOT): These are the stability anchors designed to resist the volatile tides of rebasing, providing a less volatile asset.
  • Junior Perpetual (stAMPL): On the flip side, these are tailored for those seeking to leverage AMPL’s rebasing nature, embodying a more volatile asset.
  • Raw AMPL: This is simply just AMPL. Subject to the normal everyday rebase.

Users have the ability to use the SPOT UI to do two key things: either mint new SPOT tokens with raw AMPL at a current ratio of 80/20 (80% Junior, 20% Senior) or stake their AMPL into the Rotation Vault that rotates the collateral behind SPOT. This gives us stAMPL (staked AMPL).

By converting AMPL to Junior tranches and staking them in the Vault, investors can harness a leverage multiplier, currently standing at 1.3x, to amplify their exposure to AMPL’s rebasing mechanism.

Investment Scenarios

To better understand what all of this means, let’s look at the numbers. Again, to keep it simple, we will review three different scenarios as described above:

  1. Holding raw AMPL
  2. Minting SPOT with AMPL at the predefined 80/20 ratio
  3. Staking AMPL in the rotation vault

Let us assume we are starting with 100,000 AMPL. We will look at this from both a 20% positive rebase and a 20% negative rebase.

Scenario 1: Holding Raw AMPL

This will be the most straightforward to understand. Starting with a value of 100,000 AMPL, in the event of a 20% positive rebase, this will give me:

100,000 AMPL * 1.2 (20% rebase) = 120,000 AMPL

Likewise, in the event of a 20% negative rebase, I will have 80,000 AMPL afterward. Simple.

Scenario 2: Minting SPOT with AMPL

The SPOT UI allows you to mint or redeem SPOT with AMPL

This is where things get slightly more complicated but interesting for investors. Holding raw AMPL exposes an investor to the full weight of AMPL’s normal rebase: for better or worse.

Starting with a value of 100,000 AMPL, by using the MINT feature available through the SPOT interface, we will have:

  • 80,000 Junior Tranches
  • 20,000 Senior Tranches

So, in the event of the 20% rebase:

Senior Tranches are unaffected by the rebase, so they will maintain a value of 20,000 AMPL. However, Junior Tranches absorb the full effect of the rebase:

80,000 AMPL * 1.2 (20% rebase) = 96,000 AMPL

Thus our total gain post-rebase would be:

Total AMPL Equivalent = Senior Tranches + Junior Tranches

= 20,000 + 96,000 = 116,000 AMPL

Likewise, using the same formula and ratio, in the event of a 20% negative rebase, we will be left with 84,000 AMPL.

Scenario 3: Staking AMPL into Rotation Vault for Leverage

Staking AMPL in the VAULT gives you stAMPL

This final scenario takes on maximum risk as it is overly exposed to the AMPL rebase mechanism. The leverage is determined by the Rebase Multiplier (calculated based on available liquidity in the Vault). At the time of writing, this value is 1.3x multiplier.

Starting with a value of 100,000 AMPL, by using the VAULT feature available through the SPOT interface, we will mint 100% stAMPL original equivalent to our 100,000 AMPL (i.e. 100,000 Junior Tranches).

So, in the event of the 20% rebase:

stAMPL Value = AMPL + (AMPL*(Rebase Percentage*Rebase Multiplier))

Thus our total gain post-rebase would be:

stAMPL Value = 100,000 + (100,000*(0.20*1.3)

= 100,000 + 26,000 = 126,000

Likewise, using the same formula and ratio, in the event of a 20% negative rebase, we will be left with 74,000 AMPL.

Comprehensive Analysis

The varying scenarios highlighted above elucidate different levels of risk and return, contingent upon the strategies adopted. Let’s break down the percentage gains or losses in each scenario and discern the risk exposure associated with each:


Positive Rebase (20%):

Holding raw AMPL renders a straightforward 20% gain, elevating your holdings from 100,000 AMPL to 120,000 AMPL.

Negative Rebase (20%):

Conversely, a 20% negative rebase diminishes your holdings to 80,000 AMPL, marking a 20% loss.

  • Advantages: Simplicity, direct exposure to AMPL’s rebasing mechanism.
  • Disadvantages: High volatility, full exposure to negative rebases.

Minting SPOT with AMPL

Positive Rebase (20%):

The mixed tranche structure yields a 16% gain, taking your holdings to 116,000 AMPL equivalent.

Negative Rebase (20%):

In the face of a negative rebase, your holdings decline to 84,000 AMPL equivalent, translating to a 16% loss.

  • Advantages: Moderated volatility, partial insulation from negative rebases.
  • Disadvantages: Capped upside during positive rebases, complexity.

Staking AMPL into Rotation Vault for Leverage (stAMPL)

Positive Rebase (20%):

Leveraging stAMPL magnifies the gain to 26%, elevating your holdings to 126,000 AMPL equivalent.

Negative Rebase (20%):

A negative rebase exacerbates the loss to 26%, plummeting your holdings to 74,000 AMPL equivalent.

  • Advantages: Augmented gains during positive rebases, leverage.
  • Disadvantages: Amplified losses during negative rebases, higher risk due to leverage.

Comparative Analysis of stAMPL Versus Other Scenarios

The leveraging feature of stAMPL presents an enticing prospect for amplified gains, albeit with a higher risk profile. Here’s how stAMPL stacks up against the other scenarios:

Against Raw AMPL:

  • Positive Rebase: stAMPL outperforms with an additional 6% gain (26% versus 20%).
  • Negative Rebase: stAMPL incurs an additional 6% loss (26% versus 20%).

Against Minting SPOT with AMPL:

  • Positive Rebase: stAMPL achieves a superior 10% gain (26% versus 16%).
  • Negative Rebase: stAMPL suffers a higher 10% loss (26% versus 16%).


The SPOT Rotation Vault unfolds a realm of possibilities for investors to navigate the volatile waters of AMPL’s rebasing mechanism.

By understanding the intricacies of Senior and Junior tranches, alongside the leveraging potential through 100% stAMPL, investors can tailor their strategies to align with their risk-reward profiles.

The comparative analysis accentuates the heightened risk and return profile of stAMPL. Investors eyeing higher returns and willing to shoulder increased risk might find stAMPL an attractive proposition.

Conversely, those desiring a more balanced risk profile might opt for minting SPOT or holding raw AMPL. The choice hinges on an individual’s risk tolerance and outlook on AMPL’s rebasing trajectory.

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