Ampleforth rises 80% after a big drop – Is this the ultimate stablecoin?

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Last Updated on 1 August 2020 by CryptoTips.eu

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / jeroen@cryptotips.eu
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If you look at the crypto top 100 today, you will see that not only has the top 20 risen in large numbers, but that one coin in the top 100 stands out in terms of growth. The relatively new currency Ampleforth token rises by 80% today and the market capitalization climbed by 5.000% in one month. But what is it exactly?

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Adaptive money thanks to DeFi

One of the biggest trends on the Ethereum blockchain and one of the biggest stars of the new market of Decentralized Finance (DeFi) in recent weeks was Ampleforth.

Although everyone is talking about the price increases of Chainlink, Cardano and VeChain in the altseason of the last few weeks, it is mainly the growth of Ampleforth’s market capitalization that appeals to the imagination. In one month it has gone up over 5.000%. That’s peanuts in comparison to the growth of Chainlink, Cardano and VeChain.

But what is it and why isn’t it a pump and dump or a Ponzi Scheme? Ampleforth is an elastic token, a new form of stablecoin.

Ultimate Stablecoin

AMPL is almost the ultimate stablecoin coin (or at least that’s the ultimate goal) and wants to take over the role of Tether. The goal of Ampleforth is to be $1 daily. It calls itself an elastic supply protocol. The aim of Ampleforth is to create honest, independent money via its decentralized value protocol.

It does this by expanding supply algorithmically and contracting among currency holders based on demand. Every day at 1 particular hour, the price is reset. For example, if the price of the token is $1.06, a positive rebase will be performed. Each holder’s wallet is automatically increased by more Ampleforth. Increasing the offer to lower the price to one dollar after which it starts again.

You have to have nerves of steel for it, because the price fluctuations are over tens of percent per day.

Big boost for Ethereum

Given the volatility of the dollar and the growth of Ethereum, on whose blockchain Ampleforth is running, the growth of the currency’s market capitalization is truly spectacular.

Furthermore, many investors already think that the growth of Ampleforth is only good news for Ethereum. Not only does Vitalik Buterin’s blockchain prove that it can be a basis for other currencies, it also makes the DeFi market grow further. With Ethereum 2.0 coming soon this is of course good news.