AMPL

Ampleforth solves the problem of price volatility preventing cryptocurrencies from acting as reliable units of account. While assets like Bitcoin experience high unit-price volatility, `ampl` transfers this volatility from price to supply. This allows contracts denominated in `ampl` to remain stable in value over the long term, even amidst extreme market conditions. It offers a decentralized alternative for stable contracts without relying on centralized custodians, collateral, or buyers of last resort.

The `ampl` token serves as a foundational building block in DeFi. Its primary use cases include decentralized debt denomination, enabling stable lending and borrowing on platforms like AAVE. It also facilitates the creation of on-chain derivatives through tranching, allowing users to split `ampl`'s supply volatility into senior (low-risk) and junior (high-risk) tranches without oracle risk. Furthermore, `ampl` can be used as transparent and robust collateral for truly decentralized crypto-collateralized stablecoins.

Ampleforth maintains its CPI-adjusted dollar peg through algorithmic supply adjustments rather than collateral backing. When AMPL's price exceeds the target range, the protocol increases all wallet balances proportionally, driving the price down. Conversely, when the price falls below target, it reduces balances to increase scarcity. This elastic supply mechanism transfers demand volatility to supply rather than price, allowing AMPL to return to equilibrium without collateral. The system uses Chainlink oracles to calculate daily Volume-Weighted Average Prices for accurate rebasing.

Ampleforth employs multiple safeguards against oracle manipulation: 1) Uses Chainlink's decentralized oracle network with multiple node operators providing price data; 2) Implements Volume-Weighted Average Price (VWAP) calculations requiring sustained market manipulation across multiple exchanges; 3) Plans to integrate Tellor as a secondary oracle source for data validation; 4) Price feeds monitor the 24-hour trading period, making short-term attacks economically impractical. These measures ensure rebases reflect genuine market conditions while preventing flash loan exploits.

FORTH governance achieves decentralization through: 1) Retroactive airdrop to 75,000+ AMPL holders ensuring wide initial distribution; 2) Sequential governance process with off-chain signaling and binding on-chain votes; 3) Treasury control via DAO voting for initiatives like liquidity programs; 4) Inflation rewards (2% annually) for active participants; 5) Multisig retirement with smart contract-executed upgrades. This structure prevents unilateral control while enabling community-driven protocol evolution.

Yes, AMPL integrates with DeFi protocols through specialized wrappers that handle rebases: 1) cAMPL on Compound automatically adjusts balances during rebases while accruing interest; 2) SPOT stablecoin uses AMPL as collateral through Buttonwood tranches that absorb supply changes; 3) Geyser V2's Universal Vault NFT accounts for rebases in staking rewards; 4) Elastic Vaults developed by AmpleSense DAO optimize yield through rebase mechanics. These integrations transform supply volatility into innovative yield opportunities.

Ampleforth's policy differs fundamentally: 1) Rules-based adjustments execute automatically via smart contracts without human discretion; 2) Targets purchasing power stability (CPI-adjusted) rather than arbitrary inflation targets; 3) Transfers volatility to supply rather than suppressing price signals; 4) Requires no collateral, buyers of last resort, or centralized reserves; 5) Achieves transparency through on-chain operations visible to all participants. This creates a politically neutral money form that maintains stability through algorithmic response rather than authoritative control.