Proposal: add support for AMPL

Governance
1

Hi Aave fam,

I’m Brandon, a co-founder and developer at Ampleforth.

I’d like to make a proposal for Aave to support AMPL as a collateral asset and currency. We think being able to lend and borrow AMPL on Aave would open up new and unique trading strategies not possible before in traditional finance.

Why aAMPL

AMPL brought the concept of rebasing tokens to DeFi, was an early player in Liquidity Mining, and we continue active development with new projects like the Balancer Smart Pool.

We’ve developed deep liquidity on AMMs like Uniswap, SushiSwap, Mooniswap, and Balancer, and now a natural progression is to create an AMPL lending market. We would love to build on top of this strong, liquid foundation by partnering with the innovative Aave community.

Being able to borrow and lend AMPL would enable holders to:

  • Utilize a new, low-correlated collateral asset which could reduce risk
  • Decrease exposure to rebases in exchange for income from interest
  • Use a non-collateralized asset that “borrows like a stablecoin”
  • Create leveraged AMPL trades and unlock derivatives
  • Create interest bearing AMPL that can be staked in other protocols
  • Increase exposure to AMPL & farming

We think the unique nature of this asset and its interactions with rebases will create an active and vibrant market, and bring new and interesting possibilities to Aave users.

Future Collaborations

Eventually, we would also like to join the Aave Uniswap Market with the AMPL/ETH pool, and would love to create a dedicated Geyser program that incentivizes this. Such a program would allow users to generate returns from Uniswap, Aave, and the Ample Geysers all at the same time.

Onward, to the future of elastic finance!

Brandon :ear_of_rice:

47 Likes
2

This a fantastic idea. Bringing together both assets will be a great partnership for digital finance.

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This would be great, especially interesting would be co-Geyser incentive opportunities and also the deep onchain liquidity of AMPLs… proven liquidity on chain from beginning of DeFi hype cycle until now… also can see the foundation of DeFi is being built by lending/borrowing on AAVE, and unlocking derivatives will be a next exciting step for AAVE, AMPL and DeFi as a whole…

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4

This is something I’d be very intrigued to see. I have only been in the Cryptoverse since August, but a handful of projects always seem to jump out of the page to me. After a good chunk of time spent researching, Ampleforth’s elastic supply protocol seemed novel to me but more importantly, exciting. I believe a lot of people like me that are new to cryptocurrency will actively be looking into what projects are trying to achieve something more than just a quick pump and it’s clear that both AMPL and Aave’s goals align in this respect, which is why partnerships of this type will mutually benefit from ‘new money’ coming into the sector.

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I would like to see AMPL introduce a use case. The coin rebases…then what ?

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I’d love to participate in AMPL lending and borrowing. The rebasing mechanism introduces a whole new game theory behind lending and borrowing. Imagine borrowing 100 AMPL during negative rebase then waiting for a positive rebase to pay it back :) Interesting ideas.

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I have never used Aave before and I would definitely use Aave for lending Ampl. It has a unique use case different from anything else in crypto and would draw attention. The ampl community is huge(20k wallets) and this would definitely draw more attention to the platform.

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8

Ample as collateral would change finance space. This is a great idea!

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9

Both of these tokens make up a huge chunk of my portfolio so naturally I’d love to see this proposal brought to fruition.

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Am exciting to see new kind of elastic lending in Defi. It has huge potential as it will be the first ever in defi market, effectively differentiate itself from the “traditional” stable coin lending. I would say it opens up a huge chunk of opportunities and game changing rules.

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11

I support this!

Debt denomination is a key use case of AMPL. Let’s take a look at why:

You have the option to borrow 1 of 4 assets, but you must repay the same asset in 10 years time: USD, AMPL, GOLD, or BTC. Which do you choose?

The risks of each include price and inflation risk. In 10 years, USD may have experienced significant inflation (making it interesting to borrow, but perhaps not to lend…), whereas both Gold and Bitcoin may have changed dramatically in price (making them interesting to lend, but not borrow…). Imagine that instead of buying 2 pizzas with Bitcoin many years ago, that individual had borrowed Bitcoin to buy the pizzas. They would find it hard to repay that loan today…

AMPL solves all of these issues through its elastic supply protocol. The price target is inflation-adjusted and the protocol is designed to always seek the equilibrium price target over time.

Therefore, if you borrowed 1,000 AMPL today, at around $1,000 USD value, you could enjoy a fair degree of certainty that in 10 years you will be able to purchase again 1,000 AMPL for around the equivalent of $1,000 USD in today’s dollars. This makes AMPL uniquely safe for debt denomination. This can be seen empirically by observing AMPL’s price performance in the market for over 12+ months now: the protocol has succeeded in driving the price back towards equilibrium repeatedly, despite dramatic changes in market capitalization.

Having AMPL available for on-chain borrow/lend is one of the key steps to move AMPL forward as a unique DeFi asset and building block.

As an aside, this also is what makes AMPL a more ideal base money. Because of the extreme long-term price volatility of fixed supply assets like gold and bitcoin, they are less suited for long-term debt denomination. On the other hand, discretionary fiat currencies are problematic because of a lack of clarity around how to manage monetary inflation rates in relation to macroeconomic conditions. AMPL solves these problems with a clear and simple rules-based monetary policy and elastic currency supply. The result is that AMPL can serve as a more stable and sound economic foundation for complex financial systems.

Enabling borrow/lend for AMPL is a crucial first step in this process.

15 Likes
12

As an Ampl owner I would love the opportunity to lend my Ampl on the AAVE platform. This is an excellent proposal and one I hope eventually comes to fruition.

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13

I would love to use my AMPL/ETH liquidity to contribute to my collateral on my AAVE loan!

Great idea please make it happen!

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14

Mmmm this would be very interesting ;)

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15

Clearly this idea is worth considering

All money in the world is some sort of consensus, USD is a consensus that FED will execute monetary policy prudently.

All current forms of (lets call them) “hard money” in the universe of blockchain assets is either basic fraud like USDT, or relies on volatile assets to collaterise (DAI, SNX etc). Despite some success of those instruments, you cannot reasonably argue, that DAI for instance is a true stable coin, because it relies on volatile collateral.

AMPLFORTH on the other hand is pure algorithmic “store of value” and as such is not subjected to excess volatility of underlying collateral. Like all money in the world it does not rely on anything but consensus between economic agents.

I cannot not give credit to instruments like DAI or SNX or anything else of the like, there indeed served important purpose in some short to middle term as intermediary instruments, however its important to consider long term aspects of the industry, and in the long term they cannot be effective.

I would like to strongly urge AAVE management to consider engaging with AMPLEFORTH team in constructive dialogue in order to establish productive relationship.

7 Likes
16

I personally am a big fan of the idea behind AMPL and i think enabling lending and borrowing can open interesting use cases.
Supporting AMPL in V1 is a bit tricky though: The Atokens are not upgradeable and even implementing a custom one for AMPL would require significative changes.
On V2 though, the implementation should be more straightforward. Would love an AIP developed in the open to have an AMPL-aware aToken once V2 is released.

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Awesome idea, Aave & Ampl, I like the sound of that :ok_hand:

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I like this idea. As a user of the protocol and AMPL, I think to have AMPL as collateral can give more option for financial products. The price of AMPL has been stable and it will be a nice option for traders.

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19

Great idea. Aave & Ampl both great projects.

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Wow!!! Ampl and aave what a great combination
So excited to it to play out it will be mind blowing for defi!!!

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