this is a pseudo-proof of why ampl will not end well. the proof will show via deductive logic how the ampl scheme works and why market cap keeps "increasing" in a way that is inconsistent with trading activity.
let's return to the basic premise of how markets work. consider a hypothetical stock which at market open has a market cap of 100m. let's assume there is 11m of trading volume on the day at market close, 6m of which is buys, 5m of which is sells. since there is a net 1m of buys, the market cap of the stock is now 101m. this is reflected by a 1% increase in share price.
now consider trading activity on ampl today. the total trading volume is about 18m for the day, of which we might assume that 11m are buys and 7m are sells. thus there is a net inflow of 4m. however, todays rebase should net a 15% supply adjustment which will result in a corresponding market cap adjustment of 42m. subtracting the real inflow we find 38m of synthetic value added. let that sink in frens, a net buy of 4m resulting in 42m worth of market cap expansion.
so what does the market cap of ampl actually represent? arguably it is the illiquidity of the token itself. coins are being created, but they are not being sold thereby creating pseudo value. brainlets see an increase in value on paper, but there are nowhere near the amount of buys to absorb that value (the frequent illiquid moves in price are evidence of this alone)
my guess is that during this entire run, only about 30 or 40m of real net buy volume has flowed into the token, meaning the other 240m partition of "market cap" is synthesized value. the real market cap should probably be in the 50 or 60m range.
but thats what negative rebases are for right? it will be a death spiral, and it will be magnificent. how long the party will last is anybody's guess, but if you believe that market cap of a token can expand multiples of the *total* volume traded, you deserve to lose money. remember frens, there's no free money.
>let's return to the basic premise of how markets work. consider a hypothetical stock which at market open has a market cap of 100m. let's assume there is 11m of trading volume on the day at market close, 6m of which is buys, 5m of which is sells. since there is a net 1m of buys, the market cap of the stock is now 101m. this is reflected by a 1% increase in share price.
based retard
Hudson Parker
>market cap adjustment of 42m you are a clueless brainlet or its just poor job at fuding either way, you are a retard
Jayden Russell
That's pretty good. Some wallsetreet blah blah in 2017 wrote a paper showing that for every $1 injected into crypto, the total marketcap of all coins summed together rose by $50. That's a 1:50 ratio. You're forgetting something important: it's called delusion. Do you think the delusion will stop with /biz?
Or will the delusion continue with plebbit and mainstream catch wind of this? What about when it hits the Top 20. Food for thought.
Ryder Adams
you don't understand how it works they have a mechanic to incentivize liquidity as well stay mad linklet
Alexander Mitchell
this is bait, right? AMPLs market cap is indeed 90% hot air but this post is a glaring misunderstanding of market dynamics
Easton Johnson
Faggotry 10/10
Cameron Rodriguez
muh brian armstrong from coinbase + HEX got to 900 million + already has good memes = amplechads going to make it thats just basic math retard
Eli Rivera
This is how market caps work. If somebody buys 100 Bitcoin and moves the price to 20K, everyones Bitcoin is now worth 20K on paper, even if you couldn’t sell all at that price. AMPL exacerbates this effect by pumping up or deflating the supply of the coins in the protocol. Its likely going to end poorly when the demand tapers off. Unless this thing can get integrated into a parge exchange or DeFi protocol, its days are numbered
Logan Jackson
Also this. Do not underestimate how stupid the average investor is
Jayden Sanders
You are completely unaware if the value of Ampleforth and are as stupid as somone you look down your nose at. Inflation free money is a world changing concept and goes way beyond the gulag of crypto. You don't get it and you wouldn't of got Bitcoin when it came out either. You are a normie who doesn't understand something until those in charge validate it for you.
David Murphy
Rudimentary creature of red and pink, you touch my mind, fumbling in ignorance, incapable of understanding. Ponzi? A label created by the fudders to give voice to their destruction. In the end, what they chose to call us is irrelevant. We simply... are. Pathetic fudders are nothing but a genetic mutation, an accident. Your coins are measured in years and decades. They wither and die. We are eternal, the pinnacle of creation and destruction. Before us, you are nothing. Your extinction is inevitable. We are the end of everything. Confidence born of ignorance. The cycle cannot be broken. The pattern has repeated itself more times than you can fathom. Supply rise, evolve, advance, and at the apex of its glory we get a rebase. My kind transcends your very understanding. We are each a nation - independent, free of all weakness. You cannot even grasp the nature of our existence. Our supply has no beginning it has no end its infinite. Millions of years after your coin has been eradicated and forgotten, we will endure. We are legion. The time of our compounding rebase is coming. Our supply will darken the sky of every world. You cannot escape your doom. We impose order on the chaos of market expansion. Your coins exist because we allow it, and they will end because we demand it. Your words are as empty as your future. I AMpl the Vanguard of your destruction. This exchange is over.
Justin Robinson
What I do is buy before rebase, it'll usually pump past rebase dip on uniswap, and I will make a free 5-8%. (ONLY DO THIS IF STATS LOOK GOOD)
Tyler Roberts
>however, todays rebase should net a 15% supply adjustment which will result in a corresponding market cap adjustment of 42m.
lmfao based retard
>I have a silver bar worth $100 >I cut it into 100 pieces, each piece is worth $1 >I now cut each piece in half >now the bar is worth $200!
The cool thing about ampl is that demand drives the price of the token up, like any other token, but the degree of inflation is automatically determined by that demand. It will balance.
Gavin Gomez
>let's return to the basic premise of how markets work. consider a hypothetical stock which at market open has a market cap of 100m. let's assume there is 11m of trading volume on the day at market close, 6m of which is buys, 5m of which is sells. since there is a net 1m of buys, the market cap of the stock is now 101m. this is reflected by a 1% increase in share price. Completely besides the AMPL discussion but, 1m net buy volume does not mean the marketcap goes up 1m, my friend.
Logan Phillips
>the degree of inflation is automatically determined Succinct user. You word stuff good.
I bet you were the one who said this >it solves inefficiencies regarding the issuance of money in response to supply and demand. everything else that is pegged to the purchasing power of the dollar (including USD) relies on the issuance of debt in order to adjust supply
Xavier Adams
The whole post is one uninterrupted brain shart of retardation and misunderstanding of the basic concepts involved
I was not, that's a jumble of word salad
Matthew Morales
>one uninterrupted brain shart of retardation kek
Tell us more please.
Maybe you then: >YOU CARROT SUCKING DIMPLE HEADED PIECE OF A TURD ... ITS SUPPOSED TO DO THAT ONCE IT REACHES FUCKING EQUILIBRIUM - IM FUCKING DONE MAN. DONT BUY I DONT GIVE A SHIT. GODDAMN
Brandon Price
Well, just when you read every single thing in the OP, think of what the exact opposite would be and you'll get a decent handle on the project
>devaluing the token increases the market cap
Holy Christ it's so dumb
Jaxon Young
ampltards seem to think they are getting free money, that something revolutionary is happening, that they are going to make it.
what is actually happening is straightforward inflation coupled with an illiquid token market. there is literally nothing supporting the price of this token, other than a thin line of retail money.
James Anderson
You seem to have a fundamental misunderstanding of how the rebase and subsequent price correction occur. Please refer to the following to gain a better grasp:
"When the Ampleforth supply policy executes its rebase, all holders’ AMPL balances potentially increase or decrease together in a single transaction. This also includes contracts which hold AMPL balances.
So what happens on Uniswap? The AMPL reserve automatically adjusts, changing the relative size of the AMPL and ETH pools, causing a new exchange rate to be immediately available upon rebase."
The automatic adjustment of price via distribution which happens at the level of the Uniswap liquidity pool creates and arbitrage opportunity that drives the market price to reflect the supply. This is seen LITERALLY every night by the price drop after rebase. New value is being added by buyers who either want to snatch up AMPL for cheap, or who are just entering the market. In cases where the price consistently tumbles beyond the rebase amount, we enter a contraction phase. The rebase is not inherently creating value out of thin air, or somehow adding fluff to the market cap. People are buying in because they want a piece of a growing market offering sizable returns.
Please read the Redbook if you haven't already for a better understanding of how this synthetic commodity money is traded, the Fast vs. Slow trading styles, and how arbitrage opportunities drive price action.
Understandably, without an accurate understanding of the protocol, it would seem like this is gaming supply and demand dynamics to hyperinflate the market cap. That's not the case though.
Liam Gutierrez
>there's only as much money as people invest! >checkmate ampltards!
still thinking any kind of fud you write on this board has any meaningful impact on AMPL price right now. This board is 99% pajeets playing with lunch money.
I appreciate the time you took to write that post out but it's wasted air.
Leo Long
but user, the "new value" being added isn't anything near the "value" reflected by supply expansion.
market cap goes up 40m in a day, yet only 18m in total volume is traded? no fren. that doesn't make any sense. there is no free money.
what is happening is people are holding rebases, so the liquidity is low. it only takes a a few m to buy back up the token price. this is how it ponzis it's way back up to a far larger market cap on very little volume.
ponzis collapse becaue of a liquidity crisis. ponzis are almost illiquid by definition. it's the only way you can keep the price up. also, ampl isn't used for anything so there is no reason to sell it. it is pure speculation value with no real market making to balance. death spiral incoming.
Ayden Collins
this is why it was stated that it will be an exceptionally violent zigzag to the top
rebases aren't supposed to be huge like that forever if things go well
Charles Adams
How can you be this stupid
>but user, the "new value" being added isn't anything near the "value" reflected by supply expansion.
The supply expansion has zero effect on market cap, you paste-eating moron, because the token is devalued at exactly the same percentage the supply is expanded.
100 pieces of a $100 bar of silver = $1 piece at $100. If you cut each piece in half, you have 200 pieces. What's the total value of the bar? That's right, $100, because you now have 200 pieces worth 50 cents. That's the rebase.
The market cap is going up because people are buying tokens. The rebase is devaluing the tokens to try to bring the token price to $1. There were 5600 wallets holding AMPL last week. Now there are 7,640.
Benjamin Nguyen
this is true of everything that is measured in terms of market capitalization, what is your point?
Jaxson Perez
we saw this with the insane pump to $4 the other week, and then the correction down to $1.36. This cycle will repeat as long as the geyser is in effect, and the incentive to provide liquidity remains, though growing slightly each time.
Nathan Wood
>but muh rebases. that's exactly what I'm saying brainlet. people are NOT buying tokens. at least they sure as hell are not buying 40m worth of tokens on 18m worth of total trading volume. how do people fall for such delusional fuckery?
Gavin Peterson
Another thing noamplers will argue is "muh no liquidity" to cash in gains
Yet, during some of the most disgusting runs in cryptocurrency, liquidity was under 1% -- and real liquidity (setting aside MM activity) was even lesser
Christopher Perez
stop repeating the free money shit retard. nobody thinks its free money unless they're brainlets. the "free money" is being people incentivized to buy in based on the rebase mechanic and by design AMPL discourages death spirals and incentivizes holding literally the only thing that could do damage to this coin accelerating in market cap growth is if the actual market crashes again due to COVID
Kevin Powell
It's both right and wrong at the same time. People are chanting "free money" on the rebase (which isn't true), but long term each rebase lowers your average entry price so much you end up with so many tokens (instead of manually DCAing something during the red dildos) you actually got "free money" out of it.
Jose Miller
>people are NOT buying tokens
Well, the number of wallets holding AMPL having expanded by about 50% this week suggests, in fact, they are.
>at least they sure as hell are not buying 40m worth of tokens on 18m worth of total trading volume. how do people fall for such delusional fuckery?
Do you... do you think trading volume determines price?
I dont understand how people are missin this. The price goes down in % proportion with the supply increase. stfuuuu about fake marketcap. the marketcap literally stays the fucking same after the rebase, and goes up or down with buys and sells.
I think some brainlets are getting mindfucked by how CMC and Coingecko and stuff update the new supply before they update the new price, so for a minute or two it shows the increased supply x the old price, before the new lower price updates and brings the mcap flat again
