Ampleforth was the first token to successfully complete an IEO on Bitfinex. This IEO caught the attention of a lot of users in the cryptospace, as the $5 million hard cap was sold out within the first 11 seconds. A new report by Blockfyre details how Ampleforth could pave the way for a new asset class for portfolio diversification in the future.
The report also highlighted a feature of Ampleforth that allows a flexible supply that adjusts to the market demand, while price simultaneously finds equilibrium. The token also aims to tackle the strong correlation that most cryptocurrencies share with Bitcoin.
Ampleforth project has the ability to create synthetic commodities that are disconnected when it comes to price fluctuations due to correlations, which is a common problem faced by both cryptocurrencies and traditional asset classes. Although Bitcoin was created to tackle problems that fiat currency inherently has, it still has some correlation issues.
In a world where traditional assets are widely affected by macroeconomic and global political scenarios, Ampleforth aims to create a new asset class, Synthetic Commodity, to tackle this problem.
The report stated,
“BTC as a synthetic commodity doesn’t show correlation to traditional markets such as stock stocks and bonds. Thus it reflects a potential good investment for portfolio diversification, in order to tackle macro-economic recession”
Although BTC is an uncorrelated asset, other cryptocurrencies are widely correlated to it. Ampleforth’s protocol introduces synthetic assets that “will always find a price-supply equilibrium by adjusting the price due to demand.” The report added,
“It needs to be emphasized, that these price-supply information will always be distributed amongst all token holders, so the supply of all token holders will decrease / increase. As a result, the overall cut of the total supply for each person will always remains the same.”
The report further said that if successful, Ampleforth will directly compete with Bitcoin’s $145 billion market cap and also against traditional asset market-based in fiat.
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