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Ampleforth (AMPL), the algorithmically stabilized smart money protocol, is now launching on three new blockchains: TRON, Acala (Polkadot), and NEAR.
According to the announcement, the move is part of Ampleforth’s plans to provide a core monetary asset to users on multiple blockchains, helping to support the rapidly developing decentralized finance (DeFi) ecosystem on these chains.
What is AMPL?
Simply put, Ampleforth is an alternative to stablecoins as a blockchain-based store of value and stabilized unit of purchasing power. Unlike these assets which are usually backed by fiat currencies such as the US dollar (USD) or euro (EUR) to maintain a stable value, the value of AMPL is instead entirely set by supply and demand.
This is achieved with a novel solution: changing the amount of AMPL in circulation to meet demand. When demand for AMPL increases, so too does the supply, when demand decreases, so too does the supply — this process is known as a rebase. This essentially means the amount of AMPL a user holds in their wallet expands or contracts based on changes in the total supply.
To put this into perspective, if you were holding 1,000 AMPL one day, the next day you might be holding 1,100 AMPL if there is a 10% positive rebase. Likewise, you could be holding 900 AMPL if there is a 10% negative rebase. This process is non-dilutive, which essentially means you will always maintain the same proportion of the entire supply. If you owned 1% of all AMPL before a rebase, you will still own 1% of all AMPL after.
The system is designed to provide a new type of “base money” that is uncorrelated with traditional markets, including fiat and cryptocurrency markets — instead, having its value and circulating supply set based on the demands of its users. This represents a new building block for DeFi, since AMPL can be used as an uncorrelated asset, debt instrument, collateral, and much more without any ties that go back to fiat money.
Although the Ampleforth protocol was launched on three new blockchains: Acala, NEAR, and TRON, the latter of these is arguably the most prominent.
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In the second half of 2020, TRON has massively expanded its DeFi ecosystem and is now the second most popular blockchain for DeFi applications after Ethereum. Unlike Acala and NEAR, which are still somewhat in their nascent stages of ecosystem development, TRON already has many of the most important DeFi building blocks in place.
It already has a TRC20 decentralized automatic market maker protocol (AMM) in JustSwap, liquidity mining platforms like SUN and DMDT, and its own DeFi lending and borrowing protocol with Zethyr Finance. As a result, it is most poised to benefit from the uncorrelated adaptive money.
“Tron’s ecosystem is obsessed with cutting-edge DeFi assets and capabilities, which is why everyone is so excited about AMPL,” said Justin Sun, founder of TRON, CEO of BitTorrent in the announcement. “We expect deep liquidity pools to form early on in order to support widespread use for trading and collateral as soon as possible.”