Transcript of the Ampleforth office hours on 10.02.2021
Evan on the state of Ampleforth:
Narrative
I think we’re really starting to get a little bit of traction with the “stable contracts” message. I’m grateful to all of you for helping to educate folks about this. We’ve struggled in the past to get through to people about why AMPL is important.
My sense is, the community needed to see algorithmic stable coins and crypto-collataralized stable coins fail before really understanding the value of having something like AMPL in place. To us it has always been straightforward to say “We ought to have an unbreakable cryptocurrency that can be used in contracts!” It never made sense that folks would push back on that as a goal.
We’re all anxious to see AMPL in a lend/borrow marketplace. I think it will communicate AMPL’s utility in contract denomination pretty viscerally. Eventually, I’d like to see folks in the broader community start to understand that there’s a difference between using a currency to denominate, and denominating with an oracle + settling with BTC / ETH.
Liquidity
We have a new round of geyser incentives coming out, stay tuned for a formal announcement on that soon.
Development
Quite a lot of stuff underway, the team has been heads down. Stay tuned.
Question 1:
Have any of the ‘clones’ devs reached out to the team for validation of their approach? It seems like Ampleforth has done extensive research on elastic finance and figured reaching out to the team would be the first step.
Evan:
Haha, i wish folks would do this more. We’re happy to talk through ideas and help them.
Brandon:
Yeah a few have, many haven’t. I think it’s a responsible thing to do, if you’re actually serious about what you’re working on. I give my real feedback to them when they do (not to say that they listen).
If it’s asking for development help, we don’t have the spare cycles to support any more projects outside of our current work.
Question 2:
Is there a world world which the AMPL DAO would cover unstaking from the geyser during periods of extremely high gas fees or maybe even an oven of sorts to do a mass unstaking the day a geyser expires? It’s not feasible for most LP to move anything even if they want to restake for the next geyser at the start.
Brandon:
Yeah the cost of transactions on Ethereum right now is something we’re looking closely at closely for how we operate the geyser program. It hurts the smaller participants the most, which is obviously something we want to guard against. The v2 geyser code that’s in development will require fewer transactions, making the whole process much smoother and cheaper for everyone involved.
Question 3:
Binance chain seems to be taking off like a rocket, any chance Ampleforth looks into Binance chain?
Brandon:
BSC support smart contracts, so it should be possible. I haven’t looked into the details myself, though
Question 4:
I’m a bit lost on the process of getting listed on Aave, seems like there is a proposal, then a vote, then a listing? Can you guys enlighten us on the process?
Brandon:
Aave has really good documentation on this actually. Here’s a good starting point: https://docs.aave.com/governance/guides/new-asset-listing.
Our integration does require a (small) amount of new code. So this requires an extra step of getting audits, and then deployment. That on its own adds a lot to the timeline, because good auditors have a backlog often in the range of months.
It seems like there’s generally broad support, which is very encouraging. At some point, we’ll be asking the Ample and Aave communities for delegation power to submit the proposal onchain.
Question 5:
What benefits does the team see in using AMPL in stable contracts like a car note, mortgage, etc over just using regular finance?
Evan:
I think of this question as similar to: “why store value in bitcoin when you can store value more effectively in USD today?” And broadly, I tend to break answers to these questions down into 1) near-term pragmatic reasons and 2) long-term ideological reasons.
The pragmatic reasons today tend to be speculative (ie: folks want to invest in bitcoin as a non-dilutive speculative asset because they might see rapid gains). Whereas the ideological reasons tomorrow might be something along the lines of “even though I’m not experiencing a great deal of censorship right now, I really think there ought to be something like a digital-gold in the future to check against inflation, malinvestment cycles, etc ..”
The key is having the right incentives in place, such that the near-term pragmatic reasons bootstrap the long-term ideological outcomes.
The same is the case with AMPL. Contract denomination with AMPL, particularly on platforms like Comp and AAVE will be interesting for speculative reasons due to the unique cyclical nature of AMPL price. This activity will actually bootstrap the realization of the richer long-term ideological belief that we ought to have an unbreakable digital asset that can be used for contract denomination.
Hope that helps.
Question 6:
I liked the article from Brandon on composability, especially the comment about the fact that AMPL is still programmable and we would benefit from integrations and applications that are not just reinventing the wheel in DeFi. Can you comment more on this concept and the types of applications you’d like to see people building on the protocol?
I happen to think there is a lot of innovation space available using AMPL, but that people haven’t been imaginative enough about the implications and benefits of the rebase.
Brandon:
Thanks! Here’s the article he’s mentioning for everyone else: The Letter and Spirit of Composability
Ample’s use in safely denominating debt is an obvious first milestone. That’s why I think unlocking borrowing and lending will be such a big step for the project. The longer the term of the debt agreement, the more you see the benefits. The benefits of this would not be localized, because it ideally reduces defaults and cascading failures across the entire financial stack.
Ample also fits in a unique spot as a crossover asset that can have qualities of both floating price tokens and fiat tokens. This is a bit more technical, but the way AMPL interacts with the different balancer pools is a good illustration of this.
Question 7:
Is there a limit to the share of the balancer pool? I heard the highest it could go is 98% AMPL and 2% USDC?
Brandon:
Yes, there is a hard limit eventually. The good news, though, is that the space is not linear! There’s a possibility that at some point we’ll need to deploy a second smart pool where we reset the weights.
When the pool reaches that limit, it falls back to being a regular “non-smart” pool like you see on Uniswap. I don’t have the numbers handy right now, but we’re pretty far away from that.
Question 8:
Have you been noticing a change in sentiment from the ETH community.. I remember last year many of the Ethereum podcasters were making negative claims about Ampleforth?
Evan:
I think we’ll get there soon, maybe some of what Brandon said in the ETH Denver panel will help. What I have noticed is that certain vocal players in the broader crypto-community, VC types who were once really into Basis and didn’t understand AMPL, are starting to actually turn.
With the ETH community, my sense is folks need to understand the difference between using a currency for denomination and just using an oracle and settling with ETH. It’s strange because ANY economist would see this as entirely different (ie: nominal rigidity is what makes Keynesian economics work!).
Question 9:
Any possibility of moving the AMPL-ETH pool off of Uniswap since the pool isn’t smart(like the balancer pool)?
Brandon:
A smart pool with ETH would still get exposure to IL, unless it incorporated an oracle for ETH price. It would be equivalent to an ETH/USD pool, otherwise. I think I’d bet that AMPL/ETH non-smart pool would actually come out ahead there?
But I do generally support diversifying our support across the platforms
Question 10:
Zero Exchange a DEX on avalanche chain is listing AMPL in their ETH-AVAX bridge. It is planned to make AMPL interchain also on Avalanche?
Brandon:
It’s an EVM chain, and they’re using Chainbridge. It seems like a natural fit!
Question 11:
I heard mention of utilizing Polkadot protocol. Was there a future in Integration or Inter-operation with Polkadot?
Brandon:
Yes, we’ve announced a partnership with Acala within the Polkadot ecosystem. We’ll be supported within their EVM and be a first-class token you can use to pay transaction fees.
Question 12:
It looks like having a debt obligation of 1000 AMPL would be interesting. It would take some reworking of how debt is currently offered, liquidated and denominated in DeFi, but it’s an interesting concept. Is this correct, that the team is pushing for AMPL denominated debt?
Brandon:
Yes, ideally you could borrow say 1000 AMPL. Then pay back 1000 AMPL + interest, no matter what happened to the overall AMPL supply.
Question 13:
My wife does not find AMPL interesting. What is it like telling your friends and lovers you invented one are they as irritated or more irritated than my wife?
Brandon:
Ha, I worry my friends think I’m a crazy libertarian wrecking the world with mining farms.
Evan:
Haha, it can be a buzz-kill for some crowds. Broadly, I find that if people sense you’re really into something, they like that! The key is to avoid coming off like some conspiracy theory whack job.
Question 14:
I suppose this is more a Uniswap question, but do you know how the rebase affects the authorize function on Uniswap? I had previously authorized AMPL to stake it in the AMPL-ETH liquidity pool, but pulled it out. When I try to restake now I appear to have to reapprove. According to Uniswaps (somewhat lacking) docs I should only have to approve a token once?
Brandon:
Once you execute the transferFrom it uses up the approval amount. This is normal and part of the ERC-20 standard.
If you want to avoid future approvals, you could approve a "very high" amount. But you need to make sure you really trust that source first.
Simon:
Last office hours session, Evan posted a bit of a sneak peak of one of the new videos which discusses AMPL and its use in contracts. That was shared here in the discord for some feedback. That video has since had one small tweak made and will be shared more broadly this week. When it comes out will be posted on Discord and of course would appreciate if you could share it around a bit. It’s nice to see people can understand AMPL’s advantages when being used in contracts and it seems like people understand that contracts are the foundation of financial ecosystems (including smart contracts)
