Transcript of the Ampleforth office hours on 02.06.2021
BSC is ready to go and should be live within the next two weeks. We are wrapping up some final testing.
could AMPL truly perform in a scenario of USD black swan HYPERINFLATION — i.e. can the target rate adjust fast enough if the inflation rate is 10s of 100s of % daily/weekly increases on the $? Has this been backtested/simulated?
The price target comes from the CPI oracle, and there’s nothing in the system that keeps that value from changing slower than a certain speed. As long as there is a value there, the price target will follow.
I suppose there’s a 1hr time delay per report, and there are max two reports so there is some speed limit, but we’d be talking minutes rather than hours here. The problems of measurement are much greater at this scale. This would be a sign that it would be time to switch inflation measures.
We currently use the Personal Consumption Expenditures from the Bureau of Economic Analysis. This is measured and updated on a monthly basis. It’s a relatively trusted measure, as far as these things go, but measuring inflation is very difficult and none of these are perfect.
The way I think about the price target is that it doesn’t target any particular currency — not even the USD. It targets a constant “purchasing power”. The choice of the target purchasing power is somewhat arbitrary. We chose the power of $1 in 2019 for convenience.
If we ever decided that the PCE measurements diverged from the actual USD purchasing power enough to invalidate our idea today of what one 2019 USD was back then, then we would need to find a new measure. If we wanted to truly remove dependencies on any econometrics group, then we would target a basket of commodities similar to Friedman’s “Commodity Reserve-Currency” paper from ‘51
∘ Are future aAMPL tokens fungible?
Yes aAMPL tokens are fungible.
I’d LOVE to see is chainlink style hackathons, they are relatively small budget but obviously a little management needed (chainlink recent top prize was only $3k but got 500 entrants) — has this been considered or are AMPL hackathons even planned?
We can definitely do this again if there’s demand for it. We have done a collaborated hackathon with Chainlink in the past, actually.
I’ve been doing some research on the history of Ampleforth and I’ve discovered that it started out as a protocol called ‘Fragments’ which seems to have had rebasing characteristics but details are extremely difficult to find. Can the team provide some more details on Fragments and why they switched to Ampleforth?
Yeah, the project started with a much larger and more complicated protocol called Fragments. We still have that original whitepaper, and we’ve toyed with publishing it again for posterity. This was explicitly meant to be a Stablecoin.
It had a rebase mechanic, a fractional reserve, and bonds. The more we played with it (we built a lot of it and probably still have the code somewhere), the more we lost confidence in its ability to function correctly in the marketplace.
I think some recent project launches and failures have largely validated these decisions.
What are the possible security risks when expanding AMPL to less decentralized chains?
The risks are two fold, one comes from the integrity of the bridge and the other from the integrity of the chain. The security from the n-way bridge is bound by the weakest bridge and the weakest chain in the group, so we will have to be careful while expanding to newer bridges/chains.
You see a lot of flash loan attacks on liquidity pools these days. Has Geyser V2 been tested on that?
Well the geyser naturally guards against this as rewards are a share of the product of tokens and time you’ve staked .. In a flash loan scenario within the same block, technically no time has elapsed and the user will not be able to accrue any rewards.
Will universal vaults be compatible with Alchemist crucibles?
That’s what we’re hoping for. We’d like to whitelist crucibles in our geyser program, and vice-versa. However, development is often unpredictable — especially when multiple projects are involved.
Probably not v1 crucibles though, since they have a couple issues that need fixing. (edit: Oops, sorry I was wrong about this. Current crucibles should be just fine).
Any plans to extend the AMPL methodology to other nations/currencies?
Oh yeah, we get asked a lot whether we see creating a EURO-ampl, RMB-ample, or SDR-ample. No, no plans for this. The reason is that the current ample isn’t itself nation specific. It doesn’t target the USD, it targets a particular purchasing power that’s constant through time. The constant purchasing power is what’s important, and what allows the stable denomination of contracts.
How are rebases triggered? From what I understand it is automated? Is it some job that runs on a schedule each day on a server?
Rebase is a public function on the Orchestrator contract. Anyone can pay gas and invoke it. We have a server job which executes it when the window opens .. Anyone can also execute it from their Metamask wallet through the dashboard app.
Long term I think its good to think about setting up an incentive program for people to invoke rebase and make the protocol self sustain. One possible solution would be to divert a part of the FORTH inflation to incentivise rebase callers. Once we roll out on-chain governance and build some sort of gauge mechanism to divert inflation we can look into this ..
Simon’s follow up on Aalavandhan:
Something that stands out to me that I like about this: Rebases are responsible for the movement of very large sums of value every day during positive and negative rebases. Unlike other projects (Think crypto kitties) the Ampleforth protocol does not take up huge amounts of bandwidth on Ethereum to transfer that value — making AMPL rather friendly to Ethereum while running.
The only real gas cost required for the rebase to work is to one user to call the rebase itself- and that’s a once a day occurrence. This is interesting when you think about all the solutions focused on reducing gas. It also makes rebases extremely scalable- irrespective of AMPL’s market cap, there will never be a major gas cost for negative or positive rebases, no matter how large AMPL’s market cap is.
Does AMPL need a bridge to work accross the L2 ethereum chains such as Matic or Arbitrum?
No. I think we can use their native bridge (we dont need our own)