Transcript of the Ampleforth office hours on 27.01.2021
Evan:
Hey guys, we’ve been working on a simple series of three videos. This is a cut of the first, would be great to get your feedback on it!
Broadly, the first video explains that AMPL can be used to denominate stable contracts. The second video will explain why you would want to use something like AMPL for this rather than a stablecoin. The third video, explains the difference between using an asset like AMPL as a unit of account vs. an Oracle + Smart Contract.
Question 1:
Hey team, what’s your view with regard to the sustainability of a rebasing token that targets the price of another token? Brandon you say the reason why you discarded the idea of a rebasing token that targets an index is because you felt “It would have to have some other value. i.e. A constant target -> a unit of account.” What if there is a constant target but that target is the price of another token, meaning the target is volatile?
And a more general question. Is there another utility (apart from short term speculation) for using a rebasing protocol other than as a means for ideal base money which you think would work long term?
Brandon:
I see no difference between an index target and a token target. (A token is just an index of size 1, after all).
A rebasing asset that targets a token does not provide exposure to that token. From conversations I’ve had with people, it still seems like this is a common misunderstanding.
Evan:
Good question about sustainability. My main takeaway here is that targeting something like BTC with a rebasing protocol, doesn’t actually give you “exposure” to BTC, any more than AMPL gives you “exposure” to the US dollar. It gives you exposure to the future demand for the rebasing token with said price target.
I do think it could introduce some randomness, which could be good for diversification. But really what you want is “upward” randomness — that is to say — you want a durable narrative that supports increasing demand for an asset over time. In the case of Bitcoin, the durable narrative is the promise that Bitcoin may one day take on the function of a digital gold. Bitcoin’s unique movement pattern coupled with the general understanding that the market cap of a digital gold could be quite large, is what makes it desirable to hold in portfolios.
With AMPL, we have a non-dilutive store of value that could one day function as a unit of account for contract denomination. That is a durable narrative that could be quite large if you believe that censorship resistant contracts are important. Once you couple a novel movement pattern with this, it becomes desirable to hold in portfolios.
With something like a rebasing protocol targeting some other token, I would look for a durable narrative. Some indication that it could function as part of a larger ecosystem in some differentiated way. For the most part, unless the price target is something stable, there isn’t any great reason for them to exist.
Remarks on the durable narrative:
The durable narrative also gets complicated when you introduce a whole new token’s volatility pattern into the mix. It’s a new layer of complexity that doesn’t add much value to the purpose. In my view, it would confused me (having the protocol stabilise to another token) as to where the future value of 1 AMPL will be at any given time since I also now have to account for the shifting demand of another token, which adds a significant amount of risk for not much gain utility-wise.
Evan:
Yeah I kinda agree with this, the movement pattern is a bit above the heads of most folks. They need to know that AMPL can be used to denominate stable contracts without 1) reliance on traditional banks or 2) reliance on buyers of last resort.
Question 2:
I am really excited about AAVE… DOT etc, but in the mean time could we potentially open up a channel for discussion in the Discord in which we share ideas and strategies for either future DeFi stacks involving AMPL that isn’t just geyser and chill? It’s something many other communities do especially in the yield aggregation space and its fun, stimulating and could bring some energy to the chat, and potentially even inspire the team to think out of the box… If AMPL wants to be base layer/stable contracts etc then surely brainstorming ways in which we can yield hack etc using AMPL as a building block would be good for building proof of concept and even could act as a bit of a ‘beta playground’ for future geyser concepts…
I think the idea of the geyser is exciting but if we found a way to multi farm etc that was safe and had a solid APY then that would attract more money and interest back into the space… I feel like AMPL has been memed out of existence a bit, and I’m sure there is plenty more going on behind the curtains.. But I think this community just needs a reboot. More fun, more participation and overall more positivity.. In the end the use case will win, but in the mean time I would love to pop into the Discord and experience the growth and excitement with everyone here… Maybe I’m just greedy, or maybe I need more hobbies…
I just think its an absolute crying shame that for one of THE most exciting ideas I have seen in recent crypto history has one of the most inactive and usually salty (myself included I won’t pretend I’m always captain positive) communities I have ever seen. There are coins that do nothing (literally nothing) that are named after barnyard animals that have more fun than us….
Brandon:
I’m definitely on board for that. Aside from price talk, this channel is pretty much anything-goes as long as it’s relevant to the project. Do you have any recommendations? At the same time, I also don’t think that we necessarily need to “own” every conversation in the world about ample. I think it’s great that there are so many places people are talking about the project.
Question 3:
Will we see another round of the current geysers (Old Faithful, Pescadero, etc) or will there be all new ones once the current geysers expire?
Brandon:
We’ve committed to ten years of geysers, so these programs aren’t going anywhere. Each new program overlaps with the previous, to avoid market disruptions. As far as specific platforms they target, we try to be neutral and support the community in where they want to go, and further elastic finance by supporting platforms that support elastic tokens.
Question 4:
I have a question regarding the common trope, that AMPL ‘trends towards $1’ because this won’t keep being the case (in the long-term), as far as I understand? I see many people confusing Ampleforth with a stablecoin because of this, and I was just wondering if it is something that has been thought about?
I feel that the 2019 Dollar peg is something that is widely misunderstood because of this, which is a shame I think, since fixed purchasing power is a major value proposition?
Evan:
Yeah this is funny. I think it’s just easier for people to say AMPL tends towards $1 — but you’re right over time the US dollar will be worth less and therefore the price target will increase relative to the dollar.
Question 5:
Some folks would argue as to what advantages ampl has over a stable coin for stable contracts? How would you guys counter that?
Evan:
The point of the decentralized finance movement, is to create an alternative financial ecosystem that is beyond the reach of politics.
Stablecoins either rely on: 1) traditional banking partnerships (in the case of fiat collateralized coins) or 2) buyers of last resort (in the case of algorithmic stablecoins and crypto-collateralized coins). And are thus either censorable or unreliable.
We see things like the Stable Act as evidence of 1. And we’ve seen the MakerDAO collapse on black thursday and the recent algo stablecoins collapsing as evidence of 2.
Question 6:
Evan do you plan to share any more of your art with the community in the near future? I’d personally enjoy seeing some more of your work.
Evan:
I hope to!
Question 7:
Can I ask about the $SUSHI distribution? The reward was not .1x; is there vesting involved?
Brandon:
We’re checking with the Sushi team and we’ll let you know what we find out. We’ve distributed what we’ve received to date.
Update by Brandon:
Hey, so good news. I got word from sushi team that this first sushi distribution was in fact just 1/3 of the final amount. The remaining 2/3 will be distributed later, via the same channels. I’m still waiting on more official documentation I can point people to, but this is what we know so far.
Question 8:
Is there an article that describes borrowing and lending with AMPL? It seems like the economics don’t quite work out with current systems (below equilibrium all borrowers will repay loans, above equilibrium all lenders will try to withdraw).
Brandon:
There is! I published this one back in Sept: https://medium.com/ampleforth/elastic-finance-lending-213e02de0583
Question 9:
Are you guys open to do any AMAs with Youtube influencers? A lot of people brand new to crypto rely on influencers to educate them.
Brandon:
Yeah for sure, as long as they’re not too shilly. We’ve done a few in the past over video and text like Crypto101, Wolf Crypto, and a number of podcasts. I have to admit I don’t follow the Youtube influencer scene too closely. If you have any more recommendations, we can take a look.
