FTX, a crypto-asset and derivatives exchange, announced on July 23, 2020 that it has listed new AMPL/USD and AMPL/USDT trading pairs. FTX has also introduced the first perpetual futures contracts for Ampleforth (AMPL).
As explained in a release shared with CI:
“These contracts act to hedge against the unique volatility of AMPL’s daily price change using USD or USDT as collateral.“
The AMPL token is a crypto-asset, like Bitcoin (BTC), however, its developers claim that it maintains “perfect supply-elasticity.”
Instead of performing price discovery, the AMPL protocol is able to translate volatility in the market into supply discovery via a “rebase” mechanism after every 24-hour period. During the rebase, the Ampleforth protocol can increase or decrease the number of AMPL’s that are kept in user-managed digital wallets based on “the percentage difference between the AMPL oracle rate and its target price,” which may be monitored in real-time via the Ampleforth Dashboard.
Sam Bankman-Fried, CEO of FTX, noted via Twitter:
“I’m excited to see how perpetual and quarterly futures handle AMPL’s daily splits after rebase,”
Unlike other types of futures contracts, perpetual futures don’t have an expiry date. Traders on FTX will now have the option of holding a position in AMPL for “an indefinite period of time and exit at any point,” the release noted.
Evan Kuo, CEO at Ampleforth, remarked:
“AMPL has seen quite a bit of growth in the past month and we’re excited that folks like Sam (FTX) have taken notice of the token’s unique trading mechanics. The FTX exchange is known in the industry to be the battle-field for quants, it’s a natural fit for AMPL.”
Since June 2020, AMPL tokens have managed to cross $338 million in total market capitalization with over $22 million in (average) 24-hour trading volume. The price of AMPL tokens has been fluctuating between $1.70-$2.80, which has been “the equivalent of a 6-17% supply expansion each day for token holders over the past two weeks.”
Established in 2019, FTX is now a fairly popular cryptocurrency derivatives trading platform. It supports over 45 different leveraged tokens, 20 perpetual swaps, move contracts, and prediction markets.
As mentioned in the release:
“Through an integration with Ampleforth, FTX users will experience a small downtime for spot trading, but no downtime for futures during rebase windows.”
Earlier this month, Ampleforth (AMPL), which claims to be “the best of Bitcoin and stablecoins,” recorded over $1.8 million in AMPL/ETH 24-hour trading volume on Uniswap.
In June 2020, Ampleforth introduced special liquidity incentives on Uniswap (a non-custodial Ethereum token exchange).
In an interview with CI, Kuo had explained (last year):
“From our perspective, it was clear that Bitcoin’s creators had discovered something special — the ability to engineer scarcity in a purely digital context. And through this discovery, Bitcoin’s creators succeeded in producing a digital gold. A commodity-money, something much more like a natural resource and much less like a bank — something potentially fundamental and lasting.”
“Knowing that digital scarcity could be engineered, the next question was clear, ‘can we create a commodity-money that’s better than gold? We learned through our research, that the great virtue of natural commodity-monies like gold and silver, is they are absolutely scarce and decentralized. The fact that no individual can arbitrarily increase the total supply of natural commodity-monies, makes them immune to runaway inflation.”
“But we also learned that the great failing of natural commodity-monies is supply inelasticity. Natural commodity monies cannot efficiently respond to changes in demand— making them vulnerable to destabilizing economic shocks and runaway deflation. To address this shortcoming, we designed the AMPL to automatically propagate price-information into supply, much like how thermal expansion propagates nearby kinetic energy into a material’s volume in the natural world.”
He further noted:
“This automatic supply policy is counter-cyclical and non-dilutive, making the Ample immune to both runaway inflation and runaway deflation. A reliable and decentralized source of price information is critical to this function. Bitcoins are produced based on a fixed supply schedule, meanwhile, AMPLs are counter-cyclical and constantly seek price-supply equilibria, which requires detecting and reacting to market price automatically.”