With yield farming tokens, Defi tokens, and apparently viral Tik Tok tokens (Doge) dominating alt flows, crypto twitter has likened the contemporary climate to that of the early days of 2017 ICO bubble. Ampleforth, or Ample (AMPL), is a notable project that recently introduced a yield farming incentive, which has also been on an absolute tear. AMPL as of writing sits at $2.41, but if you are familiar with AMPL’s design you would know that this paints only half the picture. When AMPL trades above its price target threshold, AMPL expands its supply based on the volume-weighted average price deviation from the price threshold. So, one has to note both price appreciation and supply expansion…which is the market cap. AMPL has a market cap of ~$91 million equating to > 400% (!) increase from last month’s market cap of ~ $17.7 million.
For a more nuanced explanation of AMPL’s rebalancing mechanics, please refer to our thematic piece on elastic supply protocols. In short, when AMPL trades above or below an expansion and contraction threshold, the Ampleforth protocol can