How does Ampleforth work?
The Ampleforth network protocol is always in search of a supply price equation and automatically enters a state of unrest and eventually reaches this equilibrium. This process is done on a daily basis and the Ampleforth protocol changes the price according to the number of tokens held by individuals.
The idea is to encourage both buying and selling to keep prices balanced. If you keep 1,000 tokens for $ 1, then you have $ 1,000, and if the token price doubles in two weeks, you will have 2,000 tokens, which cost $ 2 each; So your entire portfolio will be worth $ 4,000. This encourages the person to sell their token at a significant profit and set the price lower, bringing it closer to $ 1. This idea encourages buying and selling, and this buying and selling ultimately restores the balance to the price. This is an interesting mechanism that has never existed in the world of digital currency.
Ampleforth network applications
Ampleforth is resistant to censorship and has its own unique fluctuations. This asset operates largely independently and its fluctuations are not affected by bitcoin, stock market, etc. This asset has created a new opportunity for diversification in individuals' portfolios.
Ampleforth can be considered an asset. Individuals with AMPL tokens will have an almost constant percentage of ownership and shares of the network. AMPL has a fixed price, but not a stable coin, which makes it more usable as money in the long run. The native ampleforth network token is a global, independent currency that is not limited by collateral. These are all unique features that make the Ampleforth network stand out from the crowd.
Just like precious metals, cryptocurrencies that have a fixed supply today run the risk of being hit by sudden shocks in demand and failing to respond to complex contracts. As a result, complex economies cannot mount the cryptocurrency on the blockchain. AMPL provides the simplest solution to this problem; Adjust supply to demand ratio.
The first use of AMPL as a currency token is its independence from bitcoin, and the second is the constant storage of value within defy applications. Amplforth backup is nothing, which makes it a better alternative to crypto-backed stable coins like DAI and even Fiat-backed stable coins like USDT in the long run. Ampleforth's latest use is arbitrage. Quick-reaction traders have the opportunity to make serious gains in the short term; That is, they sell the AMPL before supply decreases and prices rise, and buy more tokens when total supply has risen and prices have fallen.
Short-term: To diversify the cryptocurrency portfolio (Ampleforth is a non-diluted asset that is not dependent on Bitcoin and other traditional assets). (Undiluted shares means stocks that have hedging rights; that is, if the stock held by shareholders increases, the positions of former shareholders are protected and their percentage of ownership in the company remains the same).
Medium-term: can be used as collateral in decentralized banks (AMPL can be used in defenses; for example, platforms such as Compound that use AMPL as collateral).
Long-term: An alternative to central bank money (like Bitcoin, but more macroeconomic compatible).
