Ampleforth is an Ethereum-based token designed to maintain stable purchasing power. Running on Ethereum that attempts to incentivize a network of users to maintain a crypto asset with a value equal to the U.S. dollar.
A type of cryptocurrency known as a stablecoin, there are a variety of ways these crypto assets achieve price parity with other assets. DAI, for example, is backed by baskets of assets locked in the Maker protocol, while USDT is backed by dollar deposits in a traditional custodian.
In straightforward terms, AMPL is a digital currency that adjusts its supply based on market conditions. It’s essentially a decentralized protocol that will inflate or deflate the existing AMPL tokens in circulation based on the current market conditions.
A common misconception is that AMPL is a stablecoin. It’s not. The protocol intends to keep the price relatively stable at around $1. Unlike existing stablecoins, however, its value isn’t pegged to the US Dollar. Instead, the protocol adjusts the supply of AMPLs on the market to either increase or decrease its current market price
Supply meets demand with no dilution
As we mentioned above, there are situations where more money is simply needed. However, unlike the fiat money-printing machine which dilutes those who hold cash, AMPL doesn’t do it.
If more AMPLs are needed, they will be supplied, but the adjustments are applied universally and proportionally across every wallet’s balance. This simply means that your percent ownership of the network remains fixed – much like Bitcoin.
It solves the inelasticity issue of Bitcoin and gold
On the other hand, there’s no predetermined amount of AMPLs to ever be in supply. This means that there can be as many as there’s a need for.
This tackles the inelasticity issue that store of value assets like Bitcoin and Gold have, making AMPL a viable means of exchange as well.
According to the project’s Whitepaper, the Ampleforth Protocol is chain-agnostic. While it’s currently deployed as an ERC-20 standard token, it can exist simultaneously on many platforms