Ampleforth — the developer of a new synthetic commodity designed to diversify risk — has released an updated white paper for its digital asset protocol. The paper was shared with Cointelegraph in an email on May 13.
Citing prior researchers, the white paper’s co-authors define a synthetic commodity as “money that has absolute scarcity but lacks non-monetary use value" — whose possibility was heralded by the innovation of blockchain technology back in 2008.
According to the press release, the design for the Ample token — expected to be traded under the ticker symbol AMPL — is intended to resist price correlation with both traditional assets and large market-cap cryptocurrencies such as bitcoin (BTC).
As Ampleforth notes, while cryptocurrencies as a sector have thus far broadly shown non-correlation with traditional asset groups and macroeconomic factors, within the crypto market itself, many large-cap coins have ostensibly shown strong correlation with one another.
This strong intra-crypto market correlation makes it difficult for investors to minimize risk for their portfolio by ensuring their investments are distributed across assets which have low covariance (correlation).
Ampleforth thus hopes that its protocol design — which propagates nominal exchange-rate information into token supply — will result in lower intra-market correlation for its token, thereby mitigating non-diversifiable risk for crypto investors. The press release outlines that:
“The
Ampleforth protocol [...] receives exchange-rate information from trusted oracles, and propagates that to holders of Amples by proportionally increasing or decreasing the number of tokens each individual holds, according to the magnitude of the exchange rate fluctuations over the previous 24 hrs.”
The new asset is furthermore designed to mitigate volatility — yet is distinct from a fiat-pegged stablecoin, with the white paper outlining the algorithmic basis upon which the token’s supply policy will prospectively result in minimal price pattern deviations.
As previously reported, Ampleforth counts British economic and financial historian Niall Ferguson as a member of its advisory board. It has reportedly thus far raised $4.75 million in funding to finalize development of its protocol from investors that include Coinbase co-founder and CEO Brian Armstrong, True Ventures, Founder Collective, Slow Ventures, Pantera and FBG.
In stablecoin news this week, Coinbase-backed Reserve has announced that they will soon launch a crypto-fiat payments app in Venezuela and Angola. Facebook’s rumored stablecoin may also be released as soon as quarter three of this year, according to anonymous sources.