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Ampleforth Down 66% — Welcome to Rebasing

The elastic supply token Ampleforth (AMPL) has lost two-thirds of its market cap in a matter of days. The atypical characteristics of the token attracted many investors that jumped in. After a dramatic surge in price and market cap, the tables have turned and Ampleforth has entered a corrective phase. The token is understood by […]

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The elastic supply token Ampleforth (AMPL) has lost two-thirds of its market cap in a matter of days. The atypical characteristics of the token attracted many investors that jumped in.

After a dramatic surge in price and market cap, the tables have turned and Ampleforth has entered a corrective phase.

The token is understood by many as just an experiment, and it may impact the way future tokens are created.

AMPL: The Ultimate Digital Money?

Ampleforth is not your typical cryptocurrency. It’s quite a complex token with some revolutionary ideas, so let’s go over some of them.

Ampleforth launched back in 2019, becoming the first Initial Exchange Offering (IEO) on Bitfinex.

Its promise is ambitious—to become the ultimate form of adaptative money. Ampleforth aimed to become a stablecoin, targeting the price of $1 in 2019.

This is different from your usual dollar-based stablecoin, which is pegged to whatever value the USD is at the moment.

That means that, as long as the Federal Reserve keeps printing money year after year, Ampleforth won’t target one dollar, but $1 of 2019 inflation-adjusted value. To give an example, $1 in 2009 equates to $1.20 in 2020.

AMPL’s website expands on this, saying:

Today AMPL’s unique volatility pattern makes it a valuable new building block for decentralized finance. Tomorrow AMPL can be a better Bitcoin.

Another novel concept is an elastic supply. AMPL’s smart contract increases or decreases the total supply automatically based on the target price, between $1.06 and $0.96—a process called “rebasing.”

If the price goes over $1.06, at 2 AM the protocol will automatically print more AMPL in order to bring the price down to the target. If the price goes below $0.96, the protocol will burn excess tokens.

Long story short, it means that you don’t own a certain amount of AMPL, but a percentage of the supply. Investors see their AMPL tokens increasing or decreasing, which is not the usual way things work with any other currency.

All’s Good Until it Isn’t

Some have made fortunes in a matter of weeks just by holding AMPL.

The token entered an expansion phase near the end of June. Increased demand for the token pushed the price up, and holders received a series of “positive rebases.”

AMPLUSDTAMPLUSDT
AMPL/USDT Chart by TradingView

Ampleforth also launched its staking program called Geyser. Geyser enables users to stake their AMPL to provide liquidity on Uniswap, giving some utility to the token.

Ampleforth geyser interface beincrypto tony toroAmpleforth geyser interface beincrypto tony toro
Ampleforth’s Geyser liquidity program. | Source: Ampleforth.org

Ampleforth made it on the top-100 cryptocurrencies on Coingecko at lightspeed. In days, the project reached top-30 and the FOMO became wild.

What Goes Up Must Come Down

At the end of each month, Ampleforth’s team and early investors get some of their token allocations unlocked. These investors and team members have benefited from the expansive period of positive rebases, holding good chunks of the supply.

And of course, they sold massively as soon as they could, along with many retail investors that wanted to lock in profits.

In less than 24 hours, the price went from $1.30 to $0.67, a loss of roughly 50%. Some retail investors jumped in attracted by the lower prices, hoping to ride the next wave—but that’s not how Ampleforth surfs:

predicted output of Ampleforth supply beincrypto tony toropredicted output of Ampleforth supply beincrypto tony toro
Graphic from Ampleforth’s economic Red Book explaining expansion and contraction. | Source: Ampleforth.org

The protocol has entered a contractive phase, and the same momentum that took it up is currently driving it down. This is causing a massive change in investors’ psychology, as many are now wary of putting money on this experimental project.

There’s a complex convergence of factors at play with Ampleforth’s recent contraction phase. The biggest one is the psychological effect of the negative rebase phase. As the protocol is adjusting the supply from its growth, tokens are being burned.

Many retail investors are getting out of their AMPL positions and moving their money into what they perceive as hotter and safer projects.

Less demand means a lower price, and the lower price will lead to negative rebases, causing further decreased demand.

If it sounds difficult, it’s because it is. Like it or hate it, Ampleforth’s economics are one of a kind. Or at least, they were.

The AMPL Rebase Party

A series of other projects are taking Ampleforth’s rebase concept and adapting it in creative ways.

Some like $RUZE have implemented an hourly rebase, while the recently-launched $RMPL has gone one step further and is doing a randomized rebase, gathering lots of transfers from Ampleforth’s holders.

ampleforth funds transferred to rmpl beincrypto tony toroampleforth funds transferred to rmpl beincrypto tony toro
Etherscan showing multiple transfers between AMPL and RMPL. | Source: Etherscan

Perhaps the most cyberpunk of them is a project called the AntiAmple ($XAMP). It accuses Ampleforth of replicating fiat in the crypto space, and XAMP claims that it “wants to destroy it.”

While Ampleforth issues more tokens based on supply and demand, we constantly destroy it. The cryptocurrency was born on the concept of deflationary assets. Antiample takes this concept to the extreme.

There are more elastic supply tokens mushrooming at the time of writing, and this might be another factor playing in Ampleforth’s current negative cycle.

Retail investors driven by quick returns will likely jump ship quickly, looking for whichever positive rebase is available.

Is the Future of Crypto Elastic?

Many users accuse Ampleforth of being a scam, printing money, and betraying the spirit of crypto. Regardless of the name-calling, Ampleforth’s novel concepts are changing the way cryptocurrency supplies work.

If the concept of rebasing takes root, we might see a whole rethinking of the tokenomics of many projects. This is very important for DeFi, as the current system is sometimes constrained by the limited supply of many tokens.

The project that gets this right may become the untouchable champion of the new decentralized finance landscape.

Blockchain

Crypto Market Cap Gained $10 Billion, Bitcoin Eyes $11,000? (Saturday’s Market Watch)

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The cryptocurrency market continues to rebound and has added another $10 billion to its market cap since yesterday. Bitcoin trades around $10,700, while some leading altcoins mark serious gains.

Bitcoin Price Trades Around $10,700

Following yesterday’s increase in which Bitcoin topped at $10,800, the primary cryptocurrency retraced to its intraday bottom at about $10,550. However, the bulls intercepted the price dip and drove the asset upwards once again. Just as 2020 goes so far, this Bitcoin spike followed the 1-2% gains seen on Wall Street at the Friday trading session.

The S&P 500 (1.6%), the Dow Jones Industrial Average (1.34%), and the Nasdaq Composite (2.26%) were all deep in the green.

At the time of this writing, BTC has dipped to $10,760 after getting rejected at the first major resistance at $10,790.

As per the analysis, if BTC price breaks above, it could head towards the next resistance at $11,000, followed by $11,200, $11,360, and $11,530. Alternatively, should the asset fall, it could rely on the support levels at $10,580, $10,440, and $10,390, if necessary.

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BTCUSD. Source: TradingView
BTCUSD. Source: TradingView

Despite stocks and cryptocurrencies, gold had failed to increase: Recording an intraday high of $1,875, the precious metal dived and closed the session at $1,860.

Altcoins Gain Traction

Some alternative coins lost significant chunks of value lately, but they have been recovering in the past few days. Ethereum has continued its upward movement with another 3% increase to above $350.

Ripple has surged by 5% to $0.243. Bitcoin Cash (1%), Polkadot (3%), Binance Coin (1%), and Litecoin (3%) are also in the green from the top 10. However, Chainlink has outperformed them all by marking an 11% increase. LINK has overtaken BNB and DOT and currently occupies the 6th spot.

Cryptocurrency Market Overview. Source: coin360.com
Cryptocurrency Market Overview. Source: coin360.com

As it typically happens, the most volatile price moves come from mid and low-cap alts.

CyberVein leads with a 21% surge. Ren (20.5%), Yearn.Finance (17%), The Midas Touch Gold (14%), DFI.Money (14%), Cardano (11%), Zilliqa (11%), HedgeTrade (10.5%), and Nervos Network (10%) follow.

In total, the cryptocurrency market cap has increased by $10 billion since yesterday. On a 48-hour scale, the metric is up by 8% since its bottom at $319 billion to $344 billion.

Total Market Cap. Source; CoinMarketCap
Total Market Cap. Source; CoinMarketCap
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Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.

Cryptocurrency charts by TradingView.


Source: https://cryptopotato.com/crypto-market-cap-gained-10-billion-bitcoin-eyes-11000-saturdays-market-watch/

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Blockchain

Bitcoin Always Online In Venezuela: Launched The First Satellite Node In Collaboration With Blockstream

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Bitcoiners in Venezuela don’t need the internet to send some Satoshis. Today, the crypto payments startup Cryptobuyer announced the successful launch of the first Bitcoin satellite node thanks to a collaboration between Cryptobuyer, Blockstream, and a team led by a crypto enthusiast named Aníbal Garrido.

The initiative allows interacting with the Bitcoin blockchain without the need of an internet connection. A satellite antenna installed in Venezuela is in charge of the communication between the node and the blockchain.

How the Satellite Node Works

This novel solution allows the Venezuelan node to process information in real-time completely off-line. Thus, the normal functioning of the network in case of connectivity failure (something widespread in the country) is guaranteed. It also facilitates the use of cryptocurrencies in remote places where internet service is scarce, expensive, or even non-existent.

The project works as follows: Blockstream contracts a number of satellites to provide the communication service between the nodes and the blockchain. Cryptobuyer bought the necessary equipment to receive the signal and connect to the satellite, and Anibal Garrido and his team were in charge of assembling the antennas and making the required adjustments.

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For Alvaro Perez, a software programmer from Valencia City who helped set up the whole infrastructure, the node’s synchronization was an inspiring moment. In statements compiled by Cryptobuyer on an official blog post, the expert says that the operation was a “great achievement.”

“We downloaded the whole Bitcoin blockchain and successfully carried out the first transaction through a Bitcoin satellite node in our country on September 23, from the city of Valencia (…) We received bitcoin through the satellite connection without any internet connection. It was a moment of great achievement.”

The journey is just beginning for Bitcoiners in Venezuela

This would be the first of three antennas that Cryptobuyer plans to deploy to cover the country’s most critical areas. The remaining two will be placed in the country’s capital, Caracas, in the north of Venezuela, and Puerto Ordaz, an industrial city located south of the country.

Later on, they plan to deploy a large number of small devices that will serve as a sort of repeater antenna to create a sizeable mesh-type network that will facilitate transactions in Bitcoin even far away from the primary antenna.

Now there’s no excuse to start using some satoshis in the country. Venezuela keeps proving that it has plenty of reasons to be on the podium of the three countries with the most adoption of Bitcoin around the world.

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Source: https://cryptopotato.com/bitcoin-always-online-in-venezuela-launched-the-first-satellite-node-in-collaboration-with-blockstream/

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KuCoin’s CEO: The $150 Million Hack Is “Small” For KuCoin, Insurance Will Cover

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In a dedicated live stream, KuCoin’s CEO noted that although why he cannot reveal how much of the company’s total assets were affected during the hack, the stolen fund amount is “small for KuCoin.” The exchange will cover all the losses with its insurance fund.

  • The company first noticed the abnormalities at 2:51 AM, Sept 26, when it received an alert from its internal risk-monitoring system. More alerts followed, indicating abnormal transfers from the hot wallet.
    kucoin_ceo_lyu-min
    KuCoin’s CEO Johnny Lyu. Source: YouTube
  • At 3:01 AM, the exchange received an alert about its remaining balance from the monitoring system. Three minutes later, more alerts came in showing abnormal XRP withdrawal, which was followed by another alert that the company’s hot wallet is “running out of balance.”
  • Subsequent alerts between 3:05 AM and 3:40 AM showed abnormal BTC withdrawal alongside other tokens.
  • While the abnormal withdrawals were ongoing, the company set up an urgent task force and then shut down its wallet servers. However, the shut down did not do much to stop the hackers as the abnormal transfers continued.
  • At this point, KuCoin realized that the private keys of its hot wallet had leaked. The company then started moving the remaining balance in its hot wallet to cold storage at 4:20 AM. The process took about 30 minutes to complete.
  • Lyu said the exchange would publish the addresses used by the hackers on its official channels. An earlier report on the hack shows that the Ethereum address supposedly used for the operation contained over $150 million in ETH and ERC-20 tokens.
  • KuCoin is now in contact and working with the international police, its largest clients, and industry experts for an in-depth investigation into the incident.
  • The CEO also said they had asked most crypto exchanges, including Binance, Bitfinex, OKEx, BitMEX, and Houbi Global, to blacklist the hackers’ wallet address and assist with the investigation.
  • The crypto community was quick to swing into action to assist KuCoin in its request. Bitfinex CTO Paolo Ardoino said they have already frozen 13 million USDT on EOS that was part of the hack, while Tether froze the 20m USDT on Ethereum in the ETH address used for the hack.
  • While trading services are still available, withdrawals and deposits will remain closed until the exchange completes its wallet upgrade.
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Source: https://cryptopotato.com/kucoins-ceo-the-150-million-hack-is-small-for-kucoin-insurance-will-cover/

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