Technical Guide to $AMPL for Beginners
1. Ok, so what is $AMPL?
It is the first token with an elastic supply to ever exist and there is nothing you can easily compare it to. Hence a lot of confusion among newcomers.
Its supply changes daily (regardless of whether you hold it on DEX, CEX) in response to demand.
$AMPL is a fully algorithmic asset. What does it mean?
- uncollateralized (unlike $DAI)
- decentralized (unlike $USDC)
- censorship-resistant (unlike $USDT)
- and non-dilutive (unlike USD)
making it an independent financial primitive that enables an alternative financial ecosystem. Nobody can tamper or kill it.
The $AMPL token lives on the Ethereum blockchain and is a composable DeFi building block and collateral asset that can be used to denominate stable contracts.
$AMPL’s price stability around the price target of $1 (*CPI-adjusted 2019 dollar) is 100% sustained by free-market incentives alone. Arbitrators take advantage of Ample’s supply changes by selling and buying $AMPL when it’s above or below its target price.
This effectively maintains $AMPL price stability without centralized collateral, without lenders of last resort, and without variations of bonds or fractional reserve mechanisms we see among other assets that aim to achieve stability.
That said, $AMPL is an entirely new, unique, and innovative cryptocurrency that has the potential to become a revolutionary monetary standard.
2. What is $AMPL Rebase?
The Ampleforth protocol helps stabilize the price of $AMPL via its daily rebase mechanism that adjusts the supply up or down to restore $AMPL’s price equilibrium of around $1.03 (given its current price target).
When the Oracle Rate price of $AMPL is outside of the +5% or -5% threshold of the Price Target ($1.03) during the rebase time, a rebase occurs and the supply of $AMPL is automatically and proportionally adjusted across all wallets.
If the Oracle Rate price of $AMPL is within a 5% threshold of the Price Target ($1.03) at the rebase time, no rebase will be applied.
In other words, for those who prefer one-liners, if $AMPL price at the time of rebase is:
- 5% above price target = supply increase
- 5% below price target = supply decrease
- within that ^ range, it doesn’t change
It’s as simple as that.
3. What is $AMPL Rebase Time?
The $AMPL rebase procedure occurs every day at 02:00 UTC.
It’s a smart contract that does the job for you, so no need to act on it.
During that time, the supply of $AMPL is automatically and proportionally adjusted across ALL TYPES of wallets that hold $AMPL tokens; unless the Oracle Rate price of $AMPL is within its 5% equilibrium threshold, then supply stays the same.
However, though the universal $AMPL rebase time for the whole Ampleforth ecosystem is the same, the actual rebase time for exchanges, swaps, and wallets may show slight (like 5–10mins) differences.
To see what the $AMPL rebase time is in your time zone, click on the following link: https://www.coin-tools.com/ampl/ampl-rebase-time/.
4. What is the $AMPL Rebase Formula?
Rebase % = (((Oracle Rate — Price Target) / Price Target) * 100) / 10
Above is the $AMPL rebase formula, which is used for calculating the Ampleforth rebase value. You can obtain the Oracle Rate and Price Target values from the Ampleforth Dashboard to quickly calculate the % value of a rebase on any given day.
When you calculate the Rebase % value, you’ll be able to calculate how many $AMPL tokens will be added to or subtracted from your $AMPL holdings, depending on whether it is a positive or a negative value.
You can manually use this formula or you can use the $AMPL Rebase Percent Calculator tool from Coin-Tools.com to quickly calculate the rebase value.
5. How to Calculate the effect of a Rebase on your AMPL holdings?
I highly recommend these two tools:
For those who like to look in the past :)
AMPL Calc allows you to see historical $AMPL rebases and how the numbers behaved in the past.
- Pick the date you (or wish you had) bought $AMPL
- The amount of USD you put in
- OR the amount of $AMPL you got that day
You can fill either 2 or 3 and the calculator will do the job for you.
Alternatively, if you bought at a specific price, you can specify both values yourself.
For those who like to take a look into the future.
AMPL Compound Calculator — www.amplcompoundcalculator.com
AMPL Compound Calculator allows you to create an imaginary (future) scenario of what $AMPL rebases could be, based on certain conditions you set (ie. Initial $AMPL Holdings, Rebase %, # of Compounding Days).
This tool is really fun to play around with to see how much money you can potentially make.
Try it out for yourself, the potential gains might surprise you ;)
I want to thank www.coin-tools.com for providing me with the inspiration for this technical guide on $AMPL. The tools they provide are truly helpful.
