What is $AMPL?:
If $BTC is a Store of Value, and
$ETH is Digital Oil, then
$AMPL is a Decentralized Federal Reserve
Here's why.
Is it a scam? No.
Is it Bitconnect 2.0? No.
Is it a Ponzi? No.
If it’s not all those things, what is it?
Here’s the narrative: The Ampleforth protocol is aiming to be crypto’s Federal Reserve.
Crypto, up until this point can be divided into the following eras:
Crypto Era 3 - Crypto Bust and Creating a New Foundation: The crypto market craters, many people leave the industry, developers hunker down to build products, many of them in finance
In previous eras, they were content to HODL and wait for their assets to appreciate.
The crypto liquidity crisis may not be obvious to many, but it is demonstrated best in Maker Dao’s struggle to keep Dai at its peg.
Maker has added additional assets, including WBTC which is in high demand. The printers at Tether and USDC are going at full force.
Tether is on shaky legal ground. USDC is useful, but it censors transactions, which goes against the Cypherpunk ethos.
This liquidity criss needs to be solved if crypto is going to grow into a trillion dollar asset class.
ETH could grow in value to fuel the ecosystem, but the market is uncertain about whether it should be looked as anything more but (cheap) fuel.
-It must scale with the growth of the crypto market
-It must be uncensorable
-It must be relatively stable
-It must be based on sound money principals
$AMPL could be THE asset for crypto’s Search for Yield Era.
In simple terms, $AMPL is a protocol that can serve as crypto’s Federal Reserve. Here’s how the Fed works (basically).
Currently, the US dollar is the world’s de-facto global currency.
And, without dollars the global financial system would seize up.
It is a scalable synthetic currency that is not backed by collateral, only itself, a primitive like Ethereum and BTC.
But, there’s a crucial difference: When the Federal Reserve prints dollars the first beneficiaries are banks.
The Federal Reserve’s money printing has led to an asset bubble where stocks do nothing but go up.
But, $AMPL can’t serve as the crypto’s Federal Reserve unless the token has massive liquidity, to the tune of billions of tokens.
Right now, like Bitcoin, $AMPL is very volatile. This is because the market cap for the token is low.
Think about it in the terms of price appreciation.
When Bitcoin’s price rises, all token holders benefit from higher USD prices.
In other words, demand energy is channeled away from price appreciation toward supply appreciation.
And the team has launched liquidity initiatives, that are no different (in spirit) from other bootstrapping efforts, to do so.
-What is $AMPL aiming to become?: A decentralized People's Federal Reserve that can solve crypto’s liquidity crisis with a non-censorable, sound (non-dillutable) currency.
The Ampleforth Protocol is aiming to be the People’s decentralized Federal Reserve.
The perfect asset for the Search for Yield Era.
Disclosure: I hold $AMPL