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/ Ampleforth

Ampleforth is not a Stablecoin... (And that’s OK!)

Ampleforth is not a Stablecoin...            (And that’s OK!)

When people think of Stablecoins, they have something very specific in mind. A Stablecoin is meant to remove volatility. A Stablecoin is something you can use for payments. A Stablecoin is something you could use as a base trading pair on an exchange or as a refuge from positions in other digital assets. A Stablecoin is a stand-in for the dollar on the blockchain.

While Amples may be used for such tasks at some point in the far future, they are absolutely NOT stablecoins today. (And that’s OK!) Here’s why...

A Stablecoin removes volatility

Ampleforth does not try to remove volatility from the system. In fact, by design it allows volatility. Movements from the price target is the primary mechanism that engages the supply policy.

A Stablecoin can be used for payments

Until Amples have reached any kind of economic price-supply equilibrium, other stablecoins will be easier to use for payments and should be preferred for that use case. Dollars will be even easier still. Using Amples for payments will be about like using BTC or ZCash for payments, as we expect both price and supply to be volatile at launch.

A Stablecoin can be used as a base trading pair

Since Amples will likely be volatile, you’d be better served trading with a stablecoin (or the dollar) against Amples, instead of trying to use Amples as a base trading pair itself.

So Ample is not a stablecoin… Why was it created?

The Ample is an asset we’ve never seen before--it’s a Smart Commodity Money that incorporates price directly into supply. When supply needs to increase, it doesn’t go to any special group--it goes to everyone universally. Same for supply decreases.

Since commodities are naturally fair and independent, Amples were designed to uphold those same principles. Ample supply is governed strictly and automatically by rules, with no discretion on supply policy decisions. There are no added transaction fees, stability fees, or interest rates that need to be balanced with the market. There are no central collateral balance sheets that need to be maintained. There are no regular votes on monetary policy. Amples are never minted and sold, or bought and burned. Amples are fair, direct and independent, with no special class of stakeholders.

Amples will move differently

We expect that Amples will move differently from other digital assets, making them uniquely useful as a way of diversifying risk in a broader portfolio of assets or as a collateral asset in decentralized banks like MakerDAO.

Amples are macroeconomically friendly

Amples are a commodity money that doesn’t suffer the same deflationary drawbacks of fixed supply currencies.

Amples can scale economically

The Ampleforth protocol is an outside money that doesn’t rely on any collateralized debt. It can scale to a global ecosystem without having to lock up exogenous assets.
In short, Ampleforth is not trying to recreate fiat money on the blockchain. It is a new formulation of a smart, synthetic commodity money that we believe to be the next natural experiment after Bitcoin. In the beginning, it will likely be useful for diversifying risk within a portfolio or as an uncorrelated reserve asset. Much later, it could become an alternative to central bank money.

/ Ampleforth

1971 Nixon Shock: The End of the Bretton Woods System

1971 Nixon Shock: The End of the Bretton Woods System

In 1971 United States monetary policy changed in a major way. President Richard Nixon announced that the US dollar would no longer be redeemable for gold or other reserve assets. This effectively ended the Bretton Woods system and with the end of that system came a new period in US and global history.

This was an important moment in history, but it’s also important to understand not just what happened, but how the instruments at the center of the story, gold and US dollars, operate. By understanding their functions, as well as their limitations, we can begin to look forward with a plan to overcome their shortcomings.


This video dives into what exactly happened in 1971, and what compelled the US government to take the bold action they did. It also discusses the advantages and disadvantages of gold and dollars as both long term stores of value and mediums of exchange.

We still have gold and dollars. But this summer, we will have something that learns from their failures. We will have the first synthetic commodity money: Amples. Please check out our website and Red Book to learn more!

/ Bitcoin

Don't Roll Your Own Econ

Don't Roll Your Own Econ

Don't Roll Your Own Crypto Econ

Decentralization was always an interesting thought, largely unachievable at scale until the advent of the digital world and peer to peer (p2p) technologies. These p2p technologies opened the door for a new digital revolution in Bitcoin. Since Bitcoin was created tens of thousands of individual blockchain projects, Dapps, and tokens are currently being developed. Every day more and more of these projects are launched, live and functioning. Like most burgeoning industries, there will be an extremely high attrition rate, and many projects will fail. Some of the mistakes that cause projects to end in bitter failure are easily avoided. Although digital assets are new and cryptocurrencies, including Bitcoin, are at the bleeding edge of technology, we can look to the past for some time tested lessons and concepts that can help us avoid simple mistakes.

One of those time tested ideas was pointed out in an article from late 2017 by Ethereum developer Nick Johnson.The article is a phenomenal read, and certainly a strong piece for anyone who may be interested in cryptocurrencies and cryptography. In the article Nick pointed out very serious concerns he had at the time with IOTA’s viability as a cryptocurrency. One of the most important lessons from the piece was what Nick states as rule 1 of cryptography - don’t roll your own crypto. It’s enticing for some teams to think they are beyond the blocking and tackling of basic rules like this as they aim to innovate and push the envelope of current technology. However, the lesson can not be ignored, and teams should not fly in the face of battle hardened and time tested cryptography. Read more in the article, but a grossly inappropriate TL;DR explanation would be that cryptography is under constant attack, and only crypto that has been mercilessly pressure tested and held its ground can serve as secure crypto you can depend on.

Let’s not get it confused, innovation in blockchain is one of the things that makes it great and the future of digital assets so bright. We need teams to innovate and invent in order to usher in advancement and better tech. However, there are areas that are ripe for innovation, and there are areas that are solid. Just like cryptography, sound economic principles are foolish to mess with. Just like the relentless attacks that proven cryptography has endured, economic principles have weathered many storms over long periods of time. Economic principles that work have survived and flourished with changes in administrations, changes in bull and bear markets and even changes in dominant government systems.

At Ampleforth, we’re innovating and creating, and we’re doing it with strong base principles in place. When it comes to economics we’ve sought out a team of advisors with the expertise and experience to not only avoid pitfalls, but truly innovate. Among the group of top level minds we're lucky to consult with are the Hoover Institution’s Niall Feguson and Manuel Rincon Cruz. We’ve also brought in the guidance of experts from Pantera Capital such as Paul Veradittakit and Joey Krug. Joey’s insights from his work at Pantera and Augur help us bridge the blockchain world with the business world in a way that few can. Our team takes a responsible and balanced approach to the creation of our technology by leveraging decades of experience in several fields and the result is a protocol that is proving to be one of the most unique projects created to date.

Reliable and established principles in economics and technology are the foundation of what we are building at Ampleforth. For more detail on the Ampleforth protocol and the innovations we’re making with synthetic commodities and ideal money, please check out our website and whitepaper, and stay up to date by following our Twitter!

/ Cryptocurrency

Cryptocurrencies and Modern Portfolio Theory

Cryptocurrencies and Modern Portfolio Theory

Are your crypto investments truly diversified? What's missing?

Every investor that wants a diversified portfolio should have exposure to cryptocurrency assets — or digital assets as they are sometimes called. Digital assets make up an asset class that has more volume every year and has shown to be uncorrelated to the stock market. One digital asset in particular, Bitcoin, has outperformed the S&P 500 since its inception, and is the best performing asset of any type over the past 10 years. Even Mike Novogratz the Founder and CEO of Galaxy Digital has said every Hedge Fund should hold 1% of their entire Portfolio in Bitcoin as a hedge to the systemic market risks.

In all markets, being correlated with how well the economy is performing has distinct advantages and disadvantages. If the economy is doing well, it often has low unemployment rates, strong productivity and controlled inflation. In these periods of economic boom, it’s good to have assets that perform accordingly. But when the economy starts to slow down and sentiment from markets shift, it is important to have a portion of your portfolio that takes advantage of the market downturn. Traditionally this is achieved through derivatives of underlying assets; however, in recent times cryptocurrencies have provided another way to add non-correlated assets to any portfolio.

What is Modern Portfolio Theory?

Modern Portfolio Theory suggests that the return of an asset should follow the amount of risk that asset has. This means that if an asset has a lot of risk then you should be expecting a higher return from that asset.

Those who subscribe to Modern Portfolio Theory target the best performing assets in multiple industries and asset classes including stocks, bonds, commodities, and in today’s market, digital assets such as cryptocurrencies and smart commodities. These types of investors aim to reduce correlation among the assets they choose for their portfolio, so that they can target high returns, but hopefully hedge downside by choosing assets that move in an unrelated (or uncorrelated) fashion to each other. Investors then weigh their allocations of each asset in their portfolio to maximize returns, as well as to additionally hedge their risk by securing assets that have different levels of correlation to the broader economy.

In today’s market, there is a new opportunity to introduce a diverse asset that has it’s own unique risk/reward profile and a brand new level of correlation to traditional asset classes. That new opportunity is, of course, digital assets like Bitcoin. Having digital assets in a portfolio can add a previously unattainable level of asset mix to an investor’s holdings, and can impact the level of risk and exposure an investor has in a potentially positive way. It’s also quite realistic for retail investors to be able to attain digital assets if they so desire. Digital assets like Bitcoin, Ethereum and other altcoins have provided the first opportunity in recent history for retail investors to add unique assets to their portfolio without requiring them to meet minimum net worth thresholds.

But what is uncorrelated with Bitcoin?

With the critical role uncorrelated assets play in modern portfolio theory, it’s important to hold assets that perform in an uncorrelated way to their broader asset grouping. In the digital asset world, we’re currently in a period of time where price discovery is a metric that gets a lot of attention by the media and it outlines an approach that a majority of crypto investors attempt to use to value and evaluate digital assets. Within the digital asset bucket, it’s important to have alternatives. This is because historically, virtually all digital assets follow Bitcoin’s price movements closely. Investors in digital assets need to have an alternative to current day cryptocurrencies in order to hedge and perform well when the broader asset class is down. With a redundancy in performance from cryptocurrencies following Bitcoin’s price movements, where can we find a digital asset that performs in an uncorrelated way?

Enter Ampleforth. Ampleforth is the first sound money with an elastic supply. The unit is called the AMPL. AMPLs are a completely different crypto model that spreads price information into supply. The Ampleforth protocol aims to achieve price-supply equilibrium, and it does this by expanding or contracting the amount of AMPL for every wallet holder at the same time every day: 4pm EST. This daily expansion or contraction is rules-based and transparent you can find the expansion or contraction rate at the AMPL dashboard. This daily event can lead to a different movement pattern for AMPL than Bitcoin and other cryptocurrencies. Should AMPL show to be uncorrelated over time to other digital assets, that could make it a very interesting tool for portfolio construction. This is because finding digital assets that are uncorrelated with Bitcoin can be advantageous in every crypto portfolio, in the same way that crypto can be advantageous in every asset management portfolio.

Out of all of the industries where investors hope for high returns, where risk and return run hand in hand, digital assets are at the top of the list for many of today’s investors. As the world continues to innovate, and digital assets add to and improve on the options we have for transacting, storing value and even creating new synthetic commodities, it’s important to consider assets that not only capture potential upside, but also include some assets that have their own price movements uncorrelated with Bitcoin. Should AMPL generate movements that differ from Bitcoin in a random way, AMPL could very well be the tool institutional and retail investors need to achieve the risk/reward balance missing from the digital asset space today.