Recently, the price of one stablecoin has surged.
Investors who entered the market two months ago have made huge profits.
This stablecoin is AMPL. It rose from $1 to a high of $2.48 and has now started to fall back, currently at $1.85.
The increase doesn’t seem to be big, so why do you make so much?
This is because AMPL has a unique feature. When the price is higher than a certain level, inflation will be triggered, tokens will be issued additionally, and the number of tokens on the address will increase. When the price falls below a certain level, deflation will be triggered and the number of tokens on the address will decrease.
Since AMPL has entered a two-month issuance cycle, especially the recent price increase, currency holders have made huge profits in the double spiral of additional issuance and price increase. Therefore, this "ancient divine coin" has once again attracted public attention, and there have been more discussions.
What is the logic of AMPL? Let’s briefly sort it out.
The AMPL project is called Ampleforth. It was born in 2019 and is the first stablecoin to adopt the Rebase elastic supply algorithm. When holding AMPL, the amount of AMPL in your wallet will change with positive and negative Rebase every day.
At that time, algorithmic stablecoins were on the rise, and AMPL was once very popular. But due to its unique properties, many people have been hit hard in the “price-drop” spiral.
Over the years, AMPL has continued to evolve based on Rebase. It has developed three core assets:
1. AMPL - the main asset, elastically supplied based on the Rebase algorithm;
2. stAMPL — Staked and leveraged AMPL;
3. SPOT - A low volatility derivative product based on AMPL that acts as a decentralized flatcoin stablecoin.
This makes AMPL more complex, although it takes some time to understand.
Back then, AMPL was positioned as a stablecoin anchored to $1, but now it is positioned as an anti-inflation stablecoin because it is difficult to anchor to $1.
Why am I writing this article today? First, because of the price increase of AMPL, and second, because of the recent increase in discussions about it. But it must be said that as an ancient project, AMPL is not very popular, and is even quite deserted.
In my opinion, algorithmic stablecoins suffered a heavy blow in the last round of bear market. The crazy but narrative concept of stablecoins whose supply and circulation are completely regulated by algorithms has been gradually eliminated in the past time. Existing stablecoin projects have joined the staking camp, such as Makerdao’s DAI.
However, AMPL has a unique gameplay that allows it to still hold its own in this narrative. As one practitioner said, AMPL should be the top MEME in the stable currency field.
So, how to play AMPL?
Twitter KOL CM made the following suggestions:
1. When buying AMPL, you should look at the market value rather than the price, because you are buying a "share" of the entire AMPL, not just a single token. Even if the current price is $1.8, if the total market value is only $10 million, it is more cost-effective to spend $1 to buy it than when the market value is $100 million.
2. AMPL can ignore bull and bear markets because its quantity changes with the market value. The market value may be as high as hundreds of millions of dollars in a bull market, and may be only tens of millions of dollars in a bear market. This actually reflects the real demand for stablecoins, and Rebase does not lie. Therefore, AMPL is very suitable for the crypto field.
3. AMPL is said to be inextricably linked to Coinbase, and wAMPL has been listed on Coinbase.
4. AMPL may be launched on the Base chain in the future, and wAMPL already has liquidity.
5. If you are an ordinary investor, it is enough to buy AMPL and hold it. You don’t need to fully understand stAMPL and SPOT at the moment, but try to figure it out after v2 goes online.
6. The concept of market capitalization share is very important. For example, if you buy $100,000 of AMPL when the market value is $10 million, when the market value increases to $100 million, your share will become $1 million, regardless of the short-term price. Of course, the reverse is also true, and negative Rebase is equally terrible.
7. If you still don’t understand Rebase and don’t know whether you are making money, you can directly observe the price of wAMPL. wAMPL is a package that wraps Rebase
The ERC20 token is similar to AMPL which is stETH and wAMPL which is wstETH.
8. AMPL is the simplest stable currency, there is no complicated Ponzi scheme, it is simple. Buy at the right market value, then hold and sell at the right market value. You need to evaluate yourself when it is appropriate.
9. Many senior investors are troubled by the problem that AMPL cannot develop application scenarios, which is caused by the Rebase feature. Therefore, exchanges and lending markets can only support wAMPL, and the project team hopes that the performance of v2 and SPOT will solve this problem.
10. It is still unclear how high the market value of AMPL can reach in this round. Everyone has their own ideas, but its ceiling depends on the performance of v2 and SPOT.
CM is a KOL who often introduces AMPL on Twitter, and his views may be biased. It must be said that AMPL carries great risks, so investment needs to be cautious.
