SPOTlight Series 3: Analyzing the Past 90-Day Performance of AMPL vs. stAMPL
With a full quarter gone since the first vault performance analysis, there is now enough data to compare AMPL vs. stAMPL’s long positions appropriately.
Over the past 90 days, the Ampleforth protocol saw its supply expand by a massive 4x, though has since undergone selling pressure and two negative rebase cycles. Below is an aggregated analysis of the profitability of both AMPL and stAMPL from October 30, 2023, to today.
Methodology
We began our analysis by tracking historical data for daily rebase percentages, oracle rates, and total supply of AMPL. By leveraging these data points, we calculated the growth in token holdings and market share for non-leveraged and leveraged scenarios (an average of 1.15x exposure). Our primary focus was from October 30 to January 30, 2024. While the exact rebase multiplier associated with the Rollover Vault fluctuates, for the purposes of this article, we have chosen to keep the multiplier at a standard average rate of 1.15x (just be aware this is not exact).
Findings for 1000 Normal vs. Staked AMPL
Assume that after the rebase event on October 30, 2024, we opened two positions: 1000 naked AMPL and 1000 staked AMPL (stAMPL).
The SPOT Rotation Vault rebase multiplier has changed over the past 90 days, depreciating from approximately 1.20x to its current value of 1.10x. Thus, the staked AMPL position saw a leveraged daily rebase of about 1.15x the normal rebase.
The normal AMPL position increased its total tokens held from 1000 to 2,911.70 AMPL by today. This is a net value increase of 191%. However, the stAMPL position increased its total tokens held from 1000 to 3,404.42 AMPL, a significant 240% gain (nearly 3.5x).
The performance of these positions can be seen in the graph below:
As shown above, the 1.15x multiplier takes time to begin truly accruing significance to the stAMPL position. However, as AMPL demand continued to outpace supply in December, the value of an early entry into the Rotation Vault became far more noticeable.
The staked AMPL position topped out at over 4,500 AMPL held toward the end of December, whereas the normal AMPL position never breached 4000 AMPL held. The effects of compounding truly elevated the staked AMPL position, especially when considering the effect the multiplier had on the daily rebase % itself.
Shown below are the charted daily rebase % for the traditional rebase and leveraged vault rebase. What we found was that the Rotation Vault experienced multiple, significant daily rebases at the end of November, well above 4% and even touching 6% in a single day.
Despite those being the highest rebases of that local cycle, the compounding benefits it gave vault stakers later down the line have effectively insulated the position from as much negative rebase pressure in 2024. It is also worth noting that nearly all of the negative rebases in 2024 have been no greater than 2%.
Network Ownership Capture
The greatest way to visualize the profitability of the Vault versus holding normal AMPL is through network ownership. For those that do not know, AMPL is a non-dilutive asset, meaning that whatever the percentage of the AMPL supply you own when the AMPL is initially purchased, that is the exact percentage you will own assuming you do not buy more or sell any AMPL.
However, this is not the case for the Rotation Vault. The added leverage of staked AMPL comes from insulating SPOT from the rebase. These supply changes are not forfeited; instead, they are transferred to the Rotation Vault as leverage. In other words, staked AMPL holders get the forgone value that SPOT holders traded for stability.
Starting at the end of October, the staked AMPL position increased its network ownership by 16.92% over the normal AMPL position just in the past 90 days. At the peak of this cycle, the staked AMPL position had a 22% gain against the normal AMPL position.
This difference can be visualized in the graph below:
Conclusion
With the recent market corrections, the Ampleforth protocol has completed four local rebase cycles (two positive, two negative), giving us an appropriate amount of data to better analyze the profitability and risk associated with becoming a Rotation Vault staker.
What the data demonstrates is that, with appropriate timing, the effects of even a single positive rebase cycle can add up to significant value over longer time horizons, bringing forth the effects of compounding. This is demonstrated well through the supply changes and network ownership of the staked AMPL position, which captured 16.92% growth against normal AMPL over the same period.
Because of the high predictability and transparency surrounding the daily rebase adjustments, determining the best entries into the Rotation Vault comes with less downside risk. Even a vault entry in January would still be only modestly down versus normal AMPL (though down nonetheless).
Of course, the current rebase multiplier of the Rotation Vault has fallen to only 1.10x. This reduces the risk associated with negative rebases to current vault stakers but does also limit the upside within restricted local positive rebase cycles as well.
The proposed SPOT tranche ratio changes could significantly increase the leverage in the vault, influencing this metric in the future. We highly recommend watching the Ampleforth governance forums for updates.
