AMPL problem on Aave v2 Ethereum

Thanks @bgdlabs - less than desired outcome even for an interim solution but still can’t thank you enough for continuously working towards doing the right thing for the community and users affected by the smart contract error.

Can I also please request @evankuo @Naguib to step in and help? Share some details and possibly contribute to the interim distribution/ withdrawal proposed by the BGD Labs? The AMPL holders/ community will really appreciate that.


Very crazy thought, but would renabling the pool on Aave help make everyone whole again?

Especially now that Ampl has much more liquidity vs when the pool was shut down and is expanding again with positive rebases (it just had 1 month straight of positive rebases)

I was under the impression that the pool shutdown was supposed to be temporary anyway?


I will support any proposal to make the depositors whole i.e. be able to withdraw exact current AMPL balance that currently shows up on the Aave dashboard.


Yeah I will also support any decision to withdraw our current balances in AMPL pool from AAVE


@Piero123 @psmith05 The whole problem is that the balance you’re seeing is inaccurate. They need to determine what people actually are owed in comparison to the virtual balance of aAMPL. Your number of aAMPL was never supposed to increase outside of receiving interest or you depositing AMPL, but the supply is fluctuating daily even with the team having turned off interest and AMPL deposits. The thing I don’t understand is how my balance isn’t

A. continuing to accrue interest at the 100% utilization rate we’ve seen historically
B. or covered by the collateral that the borrowers put down in order to receive my AMPL

According to this FAQ page we should have continued to accrue interest this whole time while borrowers were able to repay the loans they took out or get liquidated. Why was the interest rate set to near zero? Would borrowers not have closed out their positions one way or another during negative rebase periods after the freeze? I guess if they had free interest during that time there wouldn’t be a reason to.

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The sad part, is when its about virtual aAmpls they are saying about it. When it is about they have done mistake in APY changing for aAmpl - they are keeping silence about it. Let’s see how everything ends according to their good will, but I have a bad feeling. Will be really sad if we will end up in a court :frowning:

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Once again, all historic components are taken into account for the second distribution, for it to be as reasonable and fair as possible. From the Aave service providers side we are not ignoring any type of dynamic of AMPL, aAMPL and vAMPL; everything is being analysed holistically.
However, as we commented on our previous post, quick resolution and full modelling of the situation are simply not achievable at exactly the same time, and that is why the interim first distribution has been proposed.

In addition, it is important to clarify that all the proposals approved by the Aave governance in the recent past (since the end of 2023) had the objective of protecting the system in front of the uncertain nature and consequences of the problem for both aAMPL/vAMPL, what usually is denominated as force majeure. Again, accounting from that point of time (end 2023) is only a very loose reference to check, what matters and is being analysed is “how would the aAMPL/vAMPL dynamics be without any problem”.


So this seems different in my experience. I am not accruing any interest on my AMPL balance. My supplied balance is increasing only because of the rebasing and it’s very much in line with the rebase rate published on the Ampleforth dashboard.

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Yes correct. We have to atleast get back AMPL with what is shown in the current balances to be fair

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Following the previously outlined plan, we have created an ARFC for the initial interim distribution, with the Snapshot vote to be created in approximately 24 hours.

All discussion not exclusively related with that interim distribution should be kept in this thread, not on the ARFC-one.

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So looks like voting is completed and it’s a Yes. What is next?

See the governance guideline.
[ARFC] ARFC and TEMP CHECK Framework - Governance - Aave

In reply to posts asking about Ampleforth’s position on this matter, the Ampleforth development team (Fragments) will continue offering the necessary support for investigation and for BGDLabs in reaching a proposal that satisfies the community. We also support the arrangement of deferring to BGDLabs to take the lead to a resolution as we believe they are best positioned to perform this work.

For transparency and to help the community understand the situation, here is the timeline of events that led to the current state:

  • The discrepancy issue on AMPL Aave V2 market was initially noticed for the first time at a much smaller scale in May 2022.
    It was discussed with BGDLabs and was investigated and monitored by Ampleforth. At the time, the discrepancy was small, well below the AMPL reserve balance.

  • The conclusion between the two groups at the time was that the accumulation of small errors in interest that are typically negligible for other AAVE markets became relevant for the AMPL market due to the pool APY reaching up to 186210.38% at 100% utilization.
    It was decided in Oct 2022, after discussion between BGDLabs and Ampleforth, that in the transition to AAVE V3, the aAMPL V2 pool will be frozen and kept frozen. If it happened that the pool becomes insolvent before all deposits are withdrawn, BGDLabs would propose using the AMPL reserve to inject more funds in the pool for withdrawal.

  • After this proposal Tally | Aave Proposal was executed, Ampleforth team assumed the issue was concluded from our side.

  • In Dec 2023 - more than a year after the proposal above was executed - we were contacted by BGDLabs about a discrepancy between aAMPL total supply and the AMPL liquidity in the pool.

  • After revisiting this, we learned about two events that had happened in the interim. First, after the AMPL market was frozen, aAMPL deposits were re-enabled in Tally | Aave Proposal (Risk Parameter Updates for Aave v2 Ethereum Liquidity Pool). Second, the AMPL reserve needed for the contingency was liquidated in Tally | Aave Proposal (Ethereum v2 Collector Contract Consolidation)

  • Our initial proposal to BGDLabs for resolution of this larger shortfall was to pick a date before the discrepancy started growing exponentially, and assume lenders were holding AMPL since that point. The aim was to have a simple and non-controversial resolution to avoid having to simulate AAVE platform behavior off-chain.
    At that point the total liability was around 450k USD (~52,000 WAMPL at ~$8.5) which could have been mostly covered by the AMPL reserves and potentially the Ampleforth Foundation if it became necessary.

  • BGDLabs did not support making this proposal to the community and instead advised that we needed a simulation of balances, based on the specific transactions of the holders, compared to if the bug never existed. Because the exact source of the issue had still not been identified, that task would involve simulating AAVE’s lending/borrowing logic, which would require significant development and testing effort.

  • We continued the effort to pinpoint the root source of the discrepancy, but despite significant technical investment, we have been unable to isolate any issue in the aAMPL implementation. However, it was determined that even with the discrepancy, adjusting the liquidity index of the pool with the same ratio for all balances can be used to get balances at a particular point of time, and that can be used to calculate the balances on the pool freezing date. Based on that, we posted this on March 9 AMPL problem on Aave v2 Ethereum - #45 by Naguib


Thanks a lot for the update, Naguib.
From what you wrote, I have an idea - that if you look at how much aAMPL was in the wallets of holders (considering that after the freeze, many were still withdrawing their assets) at the time of the freeze, and then simulate all the rebases, and pay people this amount (for example) in wAmpl?
Thus it turns out that people will receive the same amount of AMPLs as if they had withdrawn them on the day of the freeze, and would simply hold them until the date on which they receive them back, taking into account all the rebases

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Would be best if 300k USDC from AAVE could be transferred to AMPL devolopers, after which AMPL can add from their reserves and pay out to all with wAMPL. We don’t need additional assets that are not ours. But we also don’t want to find ourselves in a disadvantaged position where, because of a mistake, it doesn’t matter who made it, in a state where it would be more profitable for us to simply hold pure AMPL without providing any liquidity on AAVE.

I made calculations on how much I bought AMPL and when, and compared it with the offer that AAVE provided with their 300k, even if this is not the final calculation. It turns out that if I had simply held AMPL, I would have had now 138.53% at the current market cap. And what AAVE offers will give me 21.87% of the current market cap. It is quite obvious that investors would not be happy with this option



With the @ACI, we are supportive of solutions allowing current users to withdraw their assets, offboard AMPL permanently from Aave, and end any form of future relationship with the AMPL team.

From an external perspective, that team seems interested in gaslight & deflection, so be it, we have no sunk cost fallacy bias.

Our focus & support is to make sure aAMPL users can recover their assets. As aave users, they deserve our efforts

There are three resources for this DAO: Focus, Time, and Money in this precise order of importance.

This whole situation has been a giant waste of both time & focus for this DAO and has put some aave users we value in an unnecessary dire situation.

That’s why we’re ok with spending money wisely & reasonably now to clear this shit up and stop wasting any additional amount of the other two resources we can’t recover.

Let’s fix this and move on.

aAMPL users are Aave users, And at Aave, we leave no ghost behind.


Mark, thank you very much for joining the discussion. I personally have been an investor in AAVE since the ICO, I closely follow the project and its development with great respect and support. I found out about AMPL from your twitter posts in 21, and after that I bought AMPL tokens and deposited them on AAVE. It is very sad to see that because of such a minor issue, 2 respectable projects have still not come to an agreement, and investors have to make so much effort to achieve justice.

We hope that the AMPL team will be more transparent about what is happening, because they have a hard time interacting with investors. It was a revelation to me to learn from Naguib that both parties knew about this problem back in 2022, but no action was taken to fix it, and no one followed up on this problem after that, or deliberately kept silent about it. No communication was made to investors notifying them of the problem and asking them to pull out liquidity.

I don’t know who is more responsible for this, AAVE or AMPL, but one thing is clear - you guys need to jointly agree and resolve this issue, about ~700 investors with more or less significant amounts are affected by this problem. Investors have a big request for both projects, please, we are waiting for transparency and open dialogue between you and us. I’m sure there are many investors who aren’t writing anything but are keeping a close eye on what’s happening. This small test in the form of the present problem will be an indicator of the reputation that will be attached to each side of the case.


i agree with quantumevolver. Not everyone responds, but there are about 700 investors who are affected by this.
I have been in it since 2021 and very much hope for a correct settlement


Exactly the compensation provided is unfair and needs to be priced at the current valuation. If the AMPL was released to the Investors and if just sits in the wallets, we would have had more AMPL by now than what was proposed as the compensation. I sincerely urge both the AMPL & AAVE Teams to make a decision that is fair and reasonable for all the Investors who trusted their platform and innovation.


They’ve stated several times this initial proposal is to hold us over until a fair calculation can be considered and presented to the community. I’m fine with that- until so much time has elapsed that the cost of resolving the issue is so high that there’s no way either team comes up with an agreement and they say, “Fuck it. The hit to our reputation is worth not paying out over a million dollars to the people who were screwed over, because at least they got something back.”
It’s also worth mentioning again that this isn’t 700 users, this could be well over a thousand, because there are plenty of people who have their funds wrapped up in the ubAAMPL contract.