Disclaimer: I assumed that a 5 years old would not actually be able to read this piece or any of those written on this site for what it matters. Hence I took the liberty to break it up for you so you can explain it easily to little Eli if he/she cares listening.
Therefore, be ready to be AMPLI5'ed!
Internet money
Ampleforth goes with the ticker $AMPL and is a crypto-currency. This basically means it is an “internet money”, in the sense it has no physical form in the real world, but it is worth actual money.
For this, it is very similar to other internet money, such as Bitcoin or Ethereum’s Ether to cite the most famous of them.
The advantage of internet money is that, for a majority of them, it is decentralized. Decentralization means that it is not controlled by anyone: there are no banks, no governments nor any other entities that would control, alter or counterfeit it.
For this to work, anyone who wish so is able to keep a track of the entire ledger. That is how it works. All transactions done by anyone to anyone are kept in an open book, made available to every one willing to have a look. And as soon as anyone makes a new transaction, it is added in real time to a new page in the book, so that anyone in the world can keep a trace of it. That way noone is able to alter the ledger, since everyone kept a copy of the past transactions!
Grandma sending $AMPL to little Eli, 5 years old
Rebase
One of the principle of Ampleforth is stability in the long run. But it doesn’t achieve it as you had thought it would if you’re new to AMPL.
$AMPL is pegged to the 2019 US dollar and is seeking to achieve stability with the US dollar. Only it is NOT a stable coin and surely doesn’t work like your usual stable coin: it is not backed 1:1 or collaterized to achieve parity like the other projects would do. Instead, its supply is re-assessed on a daily basis. It’s the rebase and debase mechanism.
When $AMPL price is higher than its target (currently > 1.06 USD), the circulating supply of $AMPL expands to dilute its value and satisfy the demand. This is called the Rebase.
On the contrary, if its price is lower than its target (currently < 0.96 USD), the circulating supply of $AMPL contracts, and therefore increasing its unit price. This is referred as Debase.
This rebase mechanism is done every day at the same time, at 10 pm Eastern Standard Time (EST).
Non dilution
The consequences of the rebase is what makes Ampleforth special, and one of a kind really. When the circulating supply of $AMPL evolves after a rebase, all the wallets are affected and the number of $AMPL you own increases or decreases depending on the result of the rebase. Not only you, everyone's and anyone's, no exception.
While troubling at first - you may lose some tokens - it translates to a main principle: "you don't own tokens, but you own a part of the supply".
Say you own 0.1% of the total supply now, you will own 0.1% tomorrow or in 10 years from now unless you sold or bought some new tokens.
For this reason, AMPL is said "non dilutive".
Value proposition
What would make $AMPL a good investment? How does it distinguish compared to other internet moneyz?
1- Elastic supply model: this is a very unique feature since $AMPL is able to contract or expand with the demand, especially when large volumes of liquidity are needed. One could only imagine than the Decentralized Finance, also called DeFi, could make a great use of it. If this happens, and the supply of coins goes to billions, your 0.1% will get you far ;)
2- Non correlation with Bitcoin and other crypto-currencies. Apart from being another internet money, $AMPL is built and dependant on completely different factors than others. This could make $AMPL one of the few asset decorrelated to Bitcoin, therefore acting as an hedge against Bitcoin.
