Transcript of the Ampleforth office hours on 17.11.2021
Question 1:
Can you talk about the developments for AMPL that you’re most excited by in the near future?
Evan:
We’ve covered a bunch of these at a high level. I think near future, wAMPL related integrations and Aave on Avalance proposal. Also near future, excited about the prospect of AIP-5 finally coming into play.
Question 2:
Can you guys also explain what’s the incentive to borrow AMPL during negative rebase ? Cause it seems there’s only utilization during positive rebase.
Evan:
Well right now the interest rates are actually quite low, so it’s actually relatively cheap / easy to borrow AMPL.
Also if folks think we’re going to expand again, and that it will be very hard to borrow if that happens, now would be a good time to secure access to that leverage imo.
Brandon:
You can borrow for a lot of the same reasons you’d borrow during expansion. If you’re primarily borrowing to speculate on AMPL itself, you can borrow to short the price. You could also borrow if you expect an expansion cycle and you want to reserve allocation in the borrowable amount.
If you’re more of an organic user (which is still the long term vision), it still borrows like a stablecoin provided you borrow and repay at the same price level.
Question 3:
When AMPL as collateral?
Evan:
So there are at least three potential collateral cases: 1) Aave., 2) Benqi, 3) Mooncake — hard to say on timing though.
Question 4:
Aave is on Avalanche as well, why is AMPL only enabled on ETH mainnet and not on Avalanche?
Evan:
I think Brandon will put out a proposal soon, there are some nuances though.
Brandon:
Addressing this very soon! Post might be ready today.
Simon:
No asset has ever been added to a chain outside of ETH via Aave governance. AMPL has had a lot of firsts on Aave, would be cool if this was yet another one.
Question 5:
Will Benqi function similar to Aave? I.E will the interest rates be as high as Aave?
Brandon:
Benqi’s first platform is primarily a Compound fork, which Aave is very similar to. They work with Gauntlet to set risk parameters based on risk assessments, so configuration details are still dependent on that. If you want insight into how Gauntlet has approached AMPL and lending specifically, you could reference their latest post in the Aave governance boards here (https://governance.aave.com/t/arc-raise-ampls-max-interest-rate/5996/68).
Question 6:
Can we make an effort to seeing AMPL included in an existing Rari Fuse Pool. This would probably be the fastest.
Brandon:
I would personally much prefer that outcome, compared to an “Ampleforth Pool” that could be seen as a silo. AMPL is really meant to be useful across the whole landscape. Perhaps there’s some value in having an Ampleforth pool first to demonstrate it working on the platform. However, Fuse does not require any integration work at all-AMPL works out of the box there. PRL will be creating a pool with AMPL in it, but I’m not sure when.
Question 7:
Any thoughts on negative Aave interest rates during negative rebase?
Brandon:
I need to think about this more before I have a grounded opinion… For anyone who hasn’t seen this yet, Tōgenkyō put out a thoughtful forum post on this topic: https://forum.ampleforth.org/t/exploring-negative-interest-rates-for-ampl-on-aave/287.
I don’t think utilization on its own is necessarily what is best to maximize. I’m most concerned with what can provide more stability or lead to more organic usage (i.e. borrowing as a monetary asset rather than solely to speculate on AMPL itself).
Question 8:
How’s the stuff with Balancer coming along for wAMPL?
Brandon:
Really hard to comment on timelines that we don’t have direct control over. I’d like to see it as quickly as possible though! (Maybe that’s already obvious).
Question 9:
What’s Wrapped AMPL supposed to do again and what’s it function going to be?
Evan:
wAMPL is just a non-rebasing wrapper on AMPL. Basically opens up access to platforms that work out of the box for ERC20 tokens without requiring technical integration.
We’ve actually been in this fight with one hand behind our backs so to speak.
Follow-up question:
So it doesn’t rebase but just goes up in value ? If that’s the case will there be supply cap? Or it’s value just goes up as raw AMPL rebases?
Evan:
Fixed supply 15e6 tokens, so the price will float like other tokens.
Question 10:
Do you guys see a lot of the use cases for AMPL as a building block being built on top of something like mooncake OR directly built on AMPL (ex. like the Amplesense EEFI vault)? Any ideas for applications that community can work on?
Evan:
I think mooncake uses AMPL as a building block … it basically builds on top of AMPL.
Follow-up question:
Right — but for future applications/usecases, do you see more of them building on top AMPL directly (ex. the EEFI vault or even Cyotee’s scheme) or building on top of an application like MoonCake (that uses AMPL)?
Evan:
I think they will be resegmenting the underlying risk of AMPL into tranches (ie: AMPL is the base level primitive) and then the tranches can be used to construct other things (like a crypto-collateralized stablecoin).
Vaults like Cyotee’s are automated trading strategies that aim to encourage countercyclical behaviour, which helps AMPL in general.
I don’t think the vaults necessarily use AMPL’s unit-of-account function, but instead take advantage of special strategies that emerge from the protocol.
Counter-cyclical vaults help make AMPL a better building-block while prl.one tranches use AMPL as a building-block.
Brandon:
I view it as a stack, where you can build on top of whichever layer fits your usecase the best.
- If you just want the SoV, MC exposure, collateral, or portfolio diversifier, wAMPL is your friend
- If you want the unit of account, e.g. for lending or other contract denomination, then AMPL is what you want
- If you need refuge from volatility, and are ok with the additional risks associated with that, then choose a stablecoin derivative of AMPL
I think of the next financial stack similar to the UNIX philosophy — small, focused modules you can string together to make whatever you want. AMPL can be at the start of many of these chained apps.
Question 11:
Have any good ideas come out of the hackathon?
Brandon:
I heard from someone who trying to add support to Sushi’s Bento Box via wAMPL, not sure how far that is yet though (or what the design is).
Question 12:
Will you guys ever release the Fragments white paper?
Brandon:
Yeah I think we should do that maybe… Interesting bit of history there.
Question 13:
Is the Ampleforth Team building anything currently? Or are you just helping other team integrate with AMPL?
Brandon:
We’re not building “products” so to speak at the moment. I’d say our time is primarily spent right now on increasing access (bridges, chains, L2s), unlocking liquidity platforms, extending the ecosystem (Aave, Benqi, etc.), and helping others build on top of or with AMPL (PRL, hackathons, etc.).
Question 14:
Maybe too soon to ask but…any plan for the potential not redeemed $FORTH tokens?
Brandon:
A few ideas have been discussed here: https://forum.ampleforth.org/t/unclaimed-forth/164
