This post is to serve as brainstorming piece and will be refined into a more formal proposal after further deliberation from the community.
An iteration/version of Element Finance’s approach (which is kinda what Button appears to be tweaking in certain respects with the A,B,Z tranche acting as independent ERC20s) should be considered.
AMPL holders could deposit AMPL for a Principal, representative,token (let’s call it pAMPL for simplicity) and receive a fixed rate of AMPL in return.
The participant is now left with a principal token and a yield token. With the principal token, the participant could go and sell for a discount; re-acquiring naked AMPL. From there, s/he is free to maintain their holdings while still earning yield from the Yield Token OR deposit the discounted AMPL and compound their position.
The key is to denominate the APY rate in AMPLs, this way it could remain fixed no matter the rebase impact.
Funds deposited (Yield accruing token: yAMPL) would be locked until the expiry date. The participant, however, can withdraw their funds whenever they want w/ no penalty.
Maybe this could be a mechanism for FORTH where FORTH holders could deposit their FORTH tokens to receive a fixed rate of AMPL throughout a predetermined maturity period. In return the user will receive Principal FORTH (pFORTH) and Yield FORTH (yFORTH).
The user could compound their yielding position by selling their pFORTH at a discount for FORTH and depositing this newly acquired, discounted FORTH into the pool again. The participant can use recursion to compound increase their yield position without ever jeopardizing the underlying FORTH (since it’s 1:1).
In the event that the participant withdraws their yFORTH from the Yielding pool (vault) prior to maturity, x% of the FORTH is deducted as an early termination/withdraw fee and burned.
A more simplistic approach would be to adopt Origin Protocols timelock mechanism where participants deposit their assets for a preset duration: (1) 30 days, (2) 90 days, (3) 365 days.
I would say that those who opt-in to lock their assets (either AMPL or FORTH - leaning more on the FORTH side imo) will be incentivized with a higher fixed APY over those who deposit in the liquid maturity pool.