Transcript of the Ampleforth office hours on 30.11.2021
Brandon:
I think it’s very likely that we’ll restart conversations around AIP-5 soon. We wanted to wait until there was more governance systems in place before pushing anything that large. It also seems like there’s been some renewed interest in it lately from the community. Once Tellor proves out the process end-to-end, I think it would be a good time to revisit. You can read more about that here: https://aips.ampleforth.org/all-aip
Question 1:
Are there plans to mirror the uFragmentsPolicy contract or more specifically the data in it, e.g. deviationThreshold, to the satellite chains? The goal is to compute the rebase on them in advance.
Brandon:
Interesting idea, I don’t think I’ve heard anyone talk about this before. The information is known to “the market” ahead of time, but I guess the goal is to make it programmatically accessible to smart contracts on satellite chains in advance of the rebase?
Follow-up question:
Exactly. the idea would be to trustless-ly be able to hedge against the rebase, with a tick function getting called like 2 hours before rebase.
Brandon:
If there’s enough demand for it, it could definitely be done but it would incur more cost to the protocol for bridge fees.
It doesn’t necessarily need to be part of the “core protocol” either. In fact, the way that rebase is reported across chains is already a separate step. We designed it this way so that anyone could independently bridge AMPL to other chains without needing any permission to do so. It could work the same for this, over Meter Passport, a different bridge, or a separate oracle (which is still basically a bridge)
Question 2:
When AMPL lending/borrowing available on Avalanche ?
Brandon:
Benqi is going through security audits and their risk modeling with gauntlet, is my latest understanding. Aave has a proposal up on the governance boards (that I actually want to catch up on now that I’m back).
Question 3:
Is the team thinking of moving or splitting a geyser between Ethereum mainnet and Avalanche once we do get AMPL on Avalance’s Aave? or no geyser at all?
Brandon:
I think it’s something to look at seriously, yeah. Before there’s a lot of utility on a new platform, I think it’s safest to assume as little as possible in terms of liquidity. If a lot is driven by programs at (e.g.) Pangolin or TJ, then that’s something that can change outside of our control.
Question 4:
What does the team think of the criticism of the Aave pool being broken?
Brandon:
I think we’ve been pretty open about our perspective in communication on official channels like the governance boards. I’m not sure there’s much to add?
It could be useful to write another longer form post on borrowing lending now that we’ve seen it in action, though.
Aalavandhan:
I don’t think we can design “the one” lending pool which will cater to everyone’s risk-reward. Once we have a custom implementation for cAMPL the community is free to experiment with different interest rate curves on a platform like Fuse.
Question 5:
Does anyone know what & how Aave can/cannot do with the AMPL they’re accumulating?
Simon:
AFAIK they have never touched their DAO assets. Just left them in the pools. Would have to look into it more. It’s impossible to speak for another project though as far as their intent, and of course the Aave governance process which would need to run in order to do something different with the assets.
Question 6:
Was there a winner for the hackathon? If so what was the winning idea?
Brandon:
I think officially the hackathon ended on the 28th, but nothing’s been sent to Judges yet. So we’ll see!
Question 7:
Does it make sense to have some type of Ampl-faucet for test-net? If we’re expecting people to build on AMPL we want them to easily have access to testNet AMPL or are you guys just ok being bugged for it?
Simon:
Not a bad idea but so many other ‘mainnet’ things are being worked on. They take priority, so having some folks help dish then out for now seems to be the most efficient, and then i do as well.
Aalavandhan:
Right now it’s easier to actually send it out manually, rather than sparing some dev cycles to build a faucet. But yea we can prioritize if theres demand for it.
A faucet is a good example of something one team can build and share with others. If folks like prl.one (Prometheus Research Labs) build one I think we can ask to just stick AMPL in it.
The wrapper interface was actually built by the PRL team and they let us host a version of it on our domain. Theirs will support AMPL and the stuff they build.
I’m a huge fan of more collaboration, would be great if we can create more tight relationships with different teams. It’s going to help all of us move faster.
We are always open and excited to work with others!
Question 8:
Is there any progress on the teams side with getting a Rari Capital’s Fuse pool integrated?
Aalavandhan:
Seems like theres demand for AMPL as collateral so we can add wAMPL to their platform without any custom integrations.
Upon more investigation i realized that compound’s cToken needs a minor modification to support naked AMPL. We’ll look to create a custom cAMPL for compound and all its forks similar to the aAMPL we created for Aave.
Question 9:
These three questions are hanging on the governance boards without response. Def agree it would be useful to update
- Is this the market we wanted?
- If not, are AMMs eating the loss of lenders the solution you see addressing this?
- If not, does this market that actually exists before us belong on the main AAVE marketplace?
Brandon:
I’m not sure I really understand your questions.
This is a market, of which there are many possible markets. It has a particular behavior that finally allows people to borrow AMPL. It’s not fit for use as collateral yet, hopefully the conditions will allow for safely doing that sometime, but I’m not sure when that will be. AMPL is still volatile, as it’s — in the grand scheme — still a very young asset. There’s still much more to add to the AMPL ecosystem to get close to what was envisioned in the old whitepaper for example.
This Aave market seems to be popular today for both borrowers and lenders. Lenders are getting good interest (sometimes even outperforming rebase? I’d like to check on this for sure, but I’d believe it if so). Borrowers might primarily be speculating on AMPL itself today, and I think that’s fine for now. It has been this way with Bitcoin for a long long time. Over time, the project still has the same long term vision it’s always had, though.
I was happy to see Gauntlet’s response in the Aave forums. I thought it was generally a fair characterization and did a good job of summarizing what’s already been said. Not sure what I would add to it myself, though.
Aalavandhan:
FYI this is what they said
https://governance.aave.com/t/arc-raise-ampls-max-interest-rate/5996/68
At the end of the day, it’s up to the community to decide how the AMPL pool should operate. Gauntlet is conducting analysis to further explore various options. If the community wants to reduce the time of 100% pool utilization, one solution is that we can adopt Alex_BertoG’s 4 line of thought and better align the borrow interest rate with rebase %. Another potential option is targeting the effective daily borrow rate at 95% utilization slightly above 95th percentile rebase % 4 (~6%) distribution.
However, as Brandon pointed out, this makes the market more unpredictable when the interest rate is above the optimal utilization. There’s no perfect parameterization under the current implementation. Community members need to balance the tradeoffs between maximizing the time of having available liquidity and minimizing the interest rate unpredictability by fine-tuning the interest rate curve.
Question 10:
Any plans on distributing more governance tokens or was it done and done forever?
Brandon:
At the end of the claim period next April, the remaining tokens will be transferred to community control. From there it’s up to the community. There’s some discussion about that ongoing here:
https://forum.ampleforth.org/t/unclaimed-forth/164?u=brandon
The supply is capped at 2% inflation per year. Aside from that, the tokens that exist already exist.
Follow-up question:
Can we vote to adjust the inflation rate latter?
Brandon:
It’s capped at 2%, so it can never go over that.
https://github.com/ampleforth/Forth/blob/master/contracts/Forth.sol#L31
It’s possible to mint less than that though. So if governors wanted 1% (or no) inflation one year that’s always an option too
Question 11:
What should & should we not be concerned about w.r.t changing the way AMPL rebases? i.e. one of the things that makes bitcoin unbreakable is (afaik) the block reward schedule has been fixed and can never change. If we can change the way AMPL rebases, is there any potential for a bad actor to take advantage of this?
Brandon:
It’s also possible to burn upgradeability completely for the supply policy, if that were ever wanted. That was already done on the AMPL token itself.
