Transcript of the Ampleforth office hours on 10.03.2021

Question 1:
I’m hearing lots of chatter of AMPL with Alchemist. Having the ability to keep your LP tokens. I see that Alchemist is built on Ampleforth Geyser Contracts? Anything you can elaborate on? NFT related?

Oh yeah great find! That’s a sneak peak of geyser v2, coming in the next round. Since this is new code, we thought it would be a good idea to test it out beforehand in a smaller-stakes area before the real-deal launch. I.e. progressive deployment.

When we launch for AMPL, we want to make sure it’s completely solid, given the dollar amounts involved. Even though the code has been audited, it’s larger and more complicated compared to the old one. This trial has already uncovered an issue that slipped past everyone before. So mission accomplished thus far. I’ll elaborate more on the NFT side for another NFT question I see.

Question 2:
How did the team decide on grading the supply change over a 10 day period? Is there a rationale for picking 10 days specifically or was it arbitrary l? The way I think about it, the rebase mechanism is like a damping force to absorb demand shocks and keep the peg. So in this case would you agree it make more sense to have the price be underdamped which creates the counter cyclical pressure?

Evan is the best for that question- but check this out when you have some time:

The high level rationale was that we didn’t want the system to overcorrect. We knew that the quantity theory of money would not hold near-term (ie: although supply changes execute algorithmically, price changes are propagated behaviorally, and these changes take time).

But we didn’t know how long it would take for prices changes to react, so we set the reaction lag to 30. This reaction lag value is sometimes taken to mean “graded as though the changes were taking place over the course of 30 days” but that rationale isn’t entirely correct because the protocol is geometric.

There’s no real way to assert how long supply changes will take to propagate back into price changes. Later we realized that the system was a bit too slow for the cryptocurrency world and sped it up to 10. Eventually we did an analysis in conjunction with gauntlet network that validated this change.

Question 3:
The idea of multi chain was first posed by Ampleforth team several months back, but it seems now that everyone has hopped on board. Do you think this is “stealing the thunder” from AMPL? Also I realize it’s very time consuming and security is main focus which I love, but the timing on some of these events has been a bit disappointing. I really appreciate the concepts, designs and creativity but I feel the community and myself have been let down with timelines that never come to fruition and it’s really disheartening.

I think just using the term “multichain” for the efforts might be doing this part of the project a disservice. We’re not just deploying another AMPL onto another chain. We’re want to make it so all the amples on all the chains are the “same ample.” — building an actually chain agnostic elastic currency. This means a couple things: — Sharing liquidity across chains (sending tokens) — Using the same supply policy across chains (propagating rebases from Ethereum abroad). Parallel deployments would probably be a quick cash-grab, but it wouldn’t build the lasting value we’re looking for. Similarly, wrapping ample into a non-rebasing currency doesn’t actually build the long-term ecosystem that’s healthy for the market. In fact, that might actually damage the market short term since traders wouldn’t be trading in relation to any price target. I recommend this piece that we published about two years ago now:

Question 4:
What was the motivating factor to make the protocol censorship resistant now?

That has always been part of our ethos, and largely we’ve followed the original schedule. The KuCoin hack was a reminder that we still had our “training wheels” on — but it was only a matter of time before we had to take them off.

To add on to what Evan said, this has always been the vision and we’re happy to just deliver on the foundational goals. We first talk about that way back here:

We felt that upgradeability is something we needed to include in the beginning, given how quickly the crypto landscape changes. If it were ever possible, and safe to do so, we’d also prefer to remove this mechanism.

Question 5:
If Ampleforth implements NFT’s in the way that I think NFT’s should be implemented (as financial products) and not memey gifs for 20 ETH I will cry.

I think being excited about NFTs is a bit like being excited about linked lists. I get excited about linked lists, but… I’m weird right? We see real possibility for utility using this data structure, and I can’t wait to see where it goes with the next geyser. As far as NFT-art… It’s easy to make fun of it and brush it off. I’m inclined to do that for the most part, but I think the concept is actually philosophically complicated enough that it would warrant a whole podcast to get across.

Question 6:
I am very interested in what the team has to say about Reserve. Right now, Reserve is just a stablecoin pegged to the USD, but they plan to go off the USD peg in the long run, and become a perfect money, with a stable peg, durable value, and adaptive supply. So I would say AMPL and Reserve are competitors. I’ve read Manny Rincon-Cruz’s article on where he describes the “functional trilemma” of money, where he argues it’s impossible for any money to serve all three functions at once. Do you think Reserve has solved this functional trilemma or not?

You should ask Manny! I do not think Reserve has solved the: “functional trilemma” at this time. People really understand stablecoins as a goal. And it turns out they will invest-in / fall-for pretty much any new claim that a decentralized stablecoin has been or will be created.

But I think we should ask ourselves how monies have historically become stable as that lends insight into how we might come about this decentralized stability honestly.

One honest source of stability, is use in denomination. Currencies like the US dollar benefit from price and wage stickiness. The fact that some prices don’t get changed very often, gives rise to near-term stability. It’s what allows the US dollar to absorb near-term shocks. And it’s why monetary policy has “real effects” today.

Another honest source of stability, is a mature marketplace for collateralized debt-securities. Such assets could be used as stable collateral without any connection to the traditional world.

There is a historical precedent for a sovereign currency having first been “backed” and then sustaining itself as an “unbacked” currency. That’s perhaps the angle Reserve is shooting for. The US dollar navigated the transition to a pure fiat currency this way. A big part of this, however, came from the state’s ability to force use in denomination.

Check out Tyler Goodspeed’s paper “Kicking away the ladder” for more insights on this.

Question 7:
Can you tell us if Aave is close to adding AMPL for collateral? Are we days/weeks/months away from that? What’s the status of the audit?

Audit is in process. Expect some developments on that soon when we have more to share.

However, since you do mention collateral specifically it’s worth expanding on that part. Assuming that the governance action goes through to create an AMPL market, expect the LTV ratio to be zero (i.e. no collateral use).

One, ample is still a relatively new asset with large enough volatility that I personally think this makes the most sense for Aave system health. Secondly, I think ample actually brings the most to the table on the borrow side. Lastly, it’s natural for parameters to start conservative and gradually loosen over time.

For reasons why, I’ll link this here or see the latest “safe contract denomination” video.

Question 8:
The goal price is now $1.027. Does that mean a 2019 $1.00 has had about $0.027 increase in value over a today $1. But is the rebase set on the Goal Price of $1.027 or a Goal Price of $1 were +/- $0.05 would trigger a rebase? So the Goal Price would be the Trigger and as we moved the goal price the Rebase triggers move as well? So we would see a x1.05 and a x0.95 of goal price for triggering of rebase? 1.07835 & 0.97565. So equilibrium would fall between those prices if the current goal price was set for triggers?

That’s right, both the price target and the equilibrium bands adjust and you have the correct values (1.07835 & 0.97565).

If you look at the price graph on the Ampleforth dashboard you can actually see the dotted lines for the thresholds change over time. (Click the 60 day view) I think we may need some regular reminding for traders to not blindly trade against $1.00. Over time this gets less and less accurate.

Question 9:
Will it ever be possible to withdrawal your rewards only from the geyser, or is withdrawing your lp stake and rewards at the same time set up that way by design?

In the previous office hours Brandon explained a bit about the way the Geysers were designed and why:

On unstaking rewards… This was a difficult design tradeoff and I can see both sides of it. We ultimately didn’t want to encourage the mercenarial farming crowd that will “farm-to-dump”. We’ve seen real examples of how this can negatively impact token health in the marketplace. You could argue that some DeFi platforms entire existence are to exploit this market dynamic.

Question 10:
Do you guys think staking across multiple geysers via NFT will be possible some day?

Yes. Geyser v2 has a new architecture and a component that we call “Universal Vaults”. This is the part represented as an NFT. The idea is you can use the same LP tokens for multiple programs simultaneously by locking them in the vault once.

If this idea gets traction, I can potentially see it becoming standardized or built into normal crypto wallets as an add-on feature. For that we’ll have to wait and see what the traction is though. h/t to @thegostep for being the main dev here, btw!



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