Proposal to list wAMPL on Seamless

Project and Asset Integrations
1

Summary

Proposal to add wAMPL for lend and borrow markets on Seamless Protocol for Base.

References

Paragraph Summary

This is a proposal to add Wrapped Ampleforth (wAMPL) to Seamless Protocol on Base mainnet. wAMPL is an ERC-20-compliant Ethereum token representing a price-volatile, wrapped version of AMPL, a rebasing token.

Motivation

The Ampleforth community has a strong interest in transacting on Base mainnet. Seamless Protocol, being the first native liquidity platform on Base mainnet, is an ideal venue for wAMPL The wAMPL token is a wrapped version of AMPL, which benefits from price discovery without direct supply rebasing, offering the potential for price appreciation within a fixed total supply. This fixed supply of 10 million wAMPL, pegged to the AMPL network, allows for easy integration onto Seamless Protocol on Base mainnet and gives Seamless and Base mainnet users the ability to gain exposure to the Ampleforth ecosystem, and vice versa.

Specifications

What is the link between the author of the AIP and the Asset?

Ampleforth community member

Provide a brief high-level overview of the project and the token

Wrapped Ampleforth (wAMPL) represents the bridging of the Ampleforth (AMPL) protocol to the broader DeFi ecosystem. AMPL is a revolutionary digital currency that adjusts its supply in response to demand, aiming to achieve a stable unit of account. However, its rebasing feature presents challenges in traditional DeFi applications where a fixed supply asset is often preferred.

wAMPL addresses this by offering a wrapped version of AMPL with a fixed supply cap of 10 million tokens. This design choice decouples wAMPL from AMPL’s daily supply adjustments while retaining a connection to the Ampleforth ecosystem through a pegged ratio. This allows wAMPL to benefit from the price discovery mechanisms of the market without the volatility of supply changes, providing a potential for price appreciation or depreciation based on the dynamics of the AMPL network.

Explain the positioning of tokens in the Seamless ecosystem. Why would it be a good borrow or collateral asset?

By integrating wAMPL onto Seamless Protocol on Base mainnet, the token offers users a stable, non-rebasing asset that is ideal for lending, borrowing, and collateralization. It opens the gateway for Seamless and Base mainnet users to engage with the Ampleforth ecosystem, introducing a decentralized asset that embodies the innovation of AMPL’s economic model without the complexity of its rebasing mechanism.

Provide a brief history of the project and the different components: DAO (is it live?), products (are they live?), etc.

Following the release of the official AMPL token in July 2019, the Ampleforth team has been routinely building and shipping products since. This includes the release of the FORTH governance token, the asset that powers the FORTH DAO. As of today, the FORTH DAO holds the most direct power over the Ampleforth network, including wAMPL, and maintains an AUM of approximately $19.2 million.

How is the asset currently used?

wAMPL allows holders the ability to maintain exposure to the Ampleforth ecosystem without the complexities of the rebase mechanism, making it much easier to support liquidity on different networks and exchanges.

Emission schedule

There is a fixed max supply of 10 million wAMPL tokens.

Token (& Protocol) permissions (minting) and upgradability. Is there a multisig? What can it do? Who are the signers?

Anyone who holds AMPL is eligible to utilize the AMPL wrapper tool to “mint” new wAMPL. Likewise, any wAMPL holder is eligible to unwrap their holdings into AMPL. This is available up to a total max supply of 10 million wAMPL.

Market data (Market Cap, 24h Volume, Volatility, Exchanges, Maturity)

Currently holds a market cap of $4.8 million with an approximate 24-hour volume of $72k (Coinbase Exchange, Uniswap V3 [Base])

Contracts date of deployments, number of transactions, number of holders for tokens

Deployed in September 2021
Number of transactions: 17k
Number of token holders: 2k

Technical Specifications

Open for other community members to contribute key technical specifications, security considerations, and risk analysis for wAMPL.

7 Likes
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Hi! Thanks for the proposal! While I support wAMPL integration, especially given that it was previously integrated to Seshell, my main concern here is a low liquidity and consequently the high risk of price manipulation

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I was under the impression that Aave V3 introduced more sophisticated risk parameters to protect itself from insolvency

Otherwise, couldnt a sophisticated trader (like Avi) continue to create bad debt in Aave?

I think a group of traders with enough capital can attack just about any coin, low liquidity or not.

I thought Aave had already figured this out from last years Mango Market attack from Avi?

4

I am a big supporter of getting wAmpl on seamless. I would like the ability to use wAmpl as collateral and borrow usdc. You can not use Ampl as collateral at the moment so this would major use case for AmpleForth.

1 Like
5

As Seamless is an AAVE fork, it may help the community to understand how AMPL performed on AAVE.

AMPL was previously listed on AAVE and had near 100% utilization for months while in positive rebase territory.

During sustained positive rebases of 2 - 3%, borrowing and lending rates on AMPL rise as borrowers profit from the spread between positive rebases and borrowing rates. The rates were exponentially high as utilization went to 100% ARC: Update AMPL interest rate curve to account for over-approximation in compounded interest - Governance - Aave.

AAVE earns a percentage of the spread between borrowing and lending rates, so went rates went exponentially high the revenue earned also increased. Despite being less than 0.1% of AAVE TVL, AMPL generated 13% of revenue in November 2021 ARC: Include Ampl in the Aave Liquidity Mining Program - Governance - Aave.

If Seamless is similar to AAVE in this way, we can expect similar outsized revenue contributions from AMPL.

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3 Likes
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First a thank you to zacharias for taking the initiative to propose an integration of wAMPL onto the Seamless platform.

I’m a part of the Ampleforth community and many in the AMPL & SPOT community know me from my contributions to the AMPL ecosystem and hosting AMPL Office Hours each week in the official Ampleforth Discord server.

I’m in support of zacharias’ initiative to add wAMPL for lend and borrow markets on Seamless Protocol for Base. As mentioned by Ras in the comments to the proposal, I agree that risks need to be assessed and I trust that the process and risk analysis for adding support on Seamless for any new token will sufficiently address this.

I support the proposal as I feel there are significant benefits for Seamless as well as the Ampleforth ecosystem should such an integration take place. I’d like to outline a few of them here.

Ampleforth is an established protocol which has been operational on Ethereum since 2019. In addition to the strong and innovative nature of the protocol, there exists a supportive and interested community which has been eager to have Ampleforth ecosystem tokens utilized for borrowing and lending and to do so on a layer 2 platform to take advantage of the faster and lower cost transactions available there.

Seamless on Base is an excellent match for the Ampleforth community which will be beneficial to Seamless as it builds its presence and TVL on Base. wAMPL is among the most liquid tokens on Base with top 15 liquidity on Base and top 10 liquidity on Uniswap. These rankings are even higher if you remove redundant pairings: Top Uniswap V3 (Base) Pools by 24h Transaction | GeckoTerminal

There are multiple assets in the Ampleforth ecosystem. wAMPL is presently bridged and live on Base while the decentralized SPOT flatcoin is in the process of being bridged over. The long running Ampleforth community has stated that wAMPL is ideal to borrow against and has long requested the inclusion of wAMPL in such a capacity. Should this wAMPL proposal be successful, Seamless could become the first stop for the current AMPL community and future AMPL and SPOT enthusiasts making Seamless the natural landing place for Ampleforth ecosystem participants when they are on Base. wAMPL’s current top liquidity on Base has the potential to be found by Base enthusiasts who are not currently in the Ampleforth ecosystem and this could also draw new awareness to Seamless.

wAMPL and Ampleforth ecosystem tokens are only on Base in terms of Layer 2’s. While Ampleforth ecosystem projects can appear anywhere there are advantages for wAMPL to build up concentration and network effects on a singular layer 2 and to be focused on a sole lending platform. Being on Base and establishing a strong presence on Seamless could be a powerful magnet for AMPL ecosystem projects and liquidity now and in the future.

In summary this proposal is something that I support and I feel as though Seamless can benefit from the strong community and network effects of wAMPL. At the same time Seamless can add excellent utility for wAMPL as it further secures its place as a top 15 project on Base.

3 Likes
7

As a holder of wAMPL I would absolutely love the ability to offer as collateral and borrow against. wAMPL differs from AMPL as it moves the variability back from supply change/volatility to price. This makes the asset less complex to utilize as collateral. There currently is approximately 1 million wAMPL in circulation and these entitle you to the underlying AMPL when unwrapped. The ecosystem of AMPLFORTH imo is some of the most forward thinking monetary architects in crypto. I strongly encourage all to look into AMPLFORTH and would fully support my wAMPL being utilized as collateralization on Seamless! Really hope we can make this come to fruition!

1 Like
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Since this is a proposal to list Wrapped Ampleforth, which does not rebase, we can expect that wAMPL will perform differently than it did on Aave.

AMPL’s high utilization and interest rate on Aave was a result of its rebasing behavior. wAMPL will behave differently since it does not rebase.

That being said, I support the addition of wAMPL to Seamless, there is definite demand for borrowing of wAMPL, and this listing would be beneficial for both Seamless and Ampleforth.

1 Like
9

I would like to thank Zacharias for the proposal and as a long-term member of the Ampleforth community and a strong believer in the AMPL suit of products, I want to express my strong support for the integration of wAMPL as an ideal starting asset for Seamless lending services I - and certainly many others - would come to Seamless to use it right away.

To address the liquidity concerns, while there is some merit to them, the wAMPL liquidity has recently been improving quite a bit. While few months ago we were doing just a couple of thousands a day, now it’s been several times over 200k/day at peaks and the trend isn’t showing sings of slowing down…

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In effect, adding wAMPL as a Supply/Borrow asset will be exactly the Cause that will lead to further increase in general demand for wAMPL and therefore its liquidity.

And while it is true, that wAMPL behaves differently from AMPL by absorbing AMPL’s rebases into wAMPL’s price, as wAMPL FAQs remind us “If the demand for WAMPL suddenly changes, redemption arbitrage will propagate this change in demand to AMPL (and vice-versa)”. So, it is still totally possible to push AMPL into positive rebase territory and thus bring the same profitable dynamics we’ve seen for AAVE protocol in November 2021 to Seamless in 2023/24 and beyond by listing only wAMPL to begin with.

I hope this clarifies some things and genuinely hope to see wAMPL integrated on Seamless soon. It’s also a chance to shine for Seamless. Last time AMPL took off it became a number one most liquid pool on Uniswap for over a month.

1 Like
10

As a follow up to my previous post… what I think could help is that Ampleforth provides a certain amount of liquidity to Seamless once integrated, at least it will reduce the risk of manipulation on Seamless

1 Like
11

Thanks for your answer, indeed wAMPL performs differently than rebasing AMPL on Aave.

I want to suggest bringing back the 186,000% rates by using ButtonWood’s rebasing wrappers to make rwAMPL, also known as rebasing wAMPL. This provides a different utility to all parties in contrast to the utility of wAMPL collateral.

Borrowers can speculate on rebase rates and interest rates. On Aave depositors historically earned a steady interest rate even during neutral or negative rebases as borrowers do not fully unwind their positions, meaning depositors actually increase their percentage share of the AMPL network during neutral or negative rebases. And Seamless takes a percentage of the spread between borrowing and lending rates, so they can expect outsized revenue contributions from rwAMPL.