I’ve been looking into ampleforth a lot, and it seems like a truly novel player in the defi space. I’m hoping someone can answer this question for me - What is the effect of buy/sell pressure on the token’s value? If the goal is for the algorithm to always either inflate or deflate supply in order to push the price towards $1, what role does the buy or sell pressure play, if any? It seems that looking at price charts in the traditional sense for this coin is useless. for example - it pumped today over 20%…but if the algorithm is automatically trying to negate that price increase at the next rebasing, the price will have to fall even if no one sells. I understand that those who hold the tokens will receive more tokens and thereby maintain a consistent share of the market cap, but if that’s the case then is it safe to say that we can just buy this token and hold it without much concern for losing any value?? seems too good to be true.
Ampleforth seems to me an excellent project, I am also studying it. And my opinion would be:
what role does the buy or sell pressure play, if any?
The algorithm levels the price to $ 1 every 24 hours in that period of time arbitrage options could be created for the token.
Also if there is a lot of pressure it can happen as we have seen these days that the adjustment has not been immediately but it has taken several days to bring it to $ 1.
And indeed we are “sure” that its value will always be $ 1, since as you mention the algorithm increases or reduces the supply of the token, but at the participation percentage level we will always have it.
I don’t know the project much, but the thing about the price (if the strategy is to hodl), as Ivan said in the live stream is that you get more or less coins when the prices goes up or down… but (this is key) you will always have the same % of the marketcap.
Therefore… I guess the tricky thing comes when you get early in the projec. Let’s say you buy/get 1% of the token when it is marketcap value on day one is 1.000.000€, for that 1% you get 10.000coins.
Time passes, money go into the project, token are issued… price go up… price go down… you “coin” balance keeps changes.
But, after X days… the marketcap is now 200.000.000€… as far as I understand it… you should keep a balance of the equivalent to the 1% as day one… so 2.000.000 coins.
Maybe I’m wrong. Not sure if I’m making any sense…
Great to always remember this phrase
“you will always have the same% of the marketcap.”
Remember that you can get more AMPL with the stake here https://www.ampleforth.org/geyser/
I agree with everything said here. But if we look at the price chart for example on coin gecko, the price has not actually touched $1 in over 30 days. So is it kind of a push and pull between buy/sell pressure and the rebasing algorithm? Seems like buy pressure is winning :))
question regarding a geyser. I am in phase of playing a bit with Ampl and it puzzles me. Everyone says - lock it in geyser to get some yield. But I get quite a lot of new AMPLs by just sitting in my wallet (app wallet). Should I do Geyser instead… is the amount of new AMPLs greater there? What is the advantages in comparison to holding in wallet?
just to give an idea… each 24h I get around 10% more of new AMPLs.
This link will help.
Do rebases still impact the Uniswap AMPL and Geyser pool AMPL?
accrding to one youtuber i watched on AMPL, the rebasing does still apply to your coins even if you have them locked up in the geyser. And i think it is separate and in addition to the AMPL reward accrual. I think it was this video https://www.youtube.com/watch?v=aNScRrusjwg but might be one of his others. I’ll have to check the white paper to see if it confirms
have it locked in the platform, starting at 1X and reaching 3X every 2 months. In the wallet they will increase or decrease depending on how AMPL needs to adjust the supply to regulate the price.
The coins you’re accumulating in your wallet outisde of the geyser are a result of the rebasing algorithm that AMPL uses. You get more coins as the demand rises, because the system tries to push the price of 1 AMPL down to $1 (by diluting the supply). This is separate from (and in addition to) the “AMPL rewards” you get if you also lock up the coins in the geyser. Keep in mind you won’t be able to just lock up the AMPL in the geyser directly. You need to first contribute your AMPL to a liquidity pool, lets say on uniswap, at a 1:1 ratio with ETH. Once you lock this pair into uniswap liquidity pool, you’ll be awarded a set amount of tokens representing your liquidity contribution, and it is these new tokens that you’ll have to deposit into the geyser.
cool, great explanation and also ty very much for them. For now, rebase directly from wallet rebase seems more profitable, but if the price will go more down maybe geyser will become a better option.