[Ideation] Fixed Yield AMPL

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.

Alternative Approach

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.

1 Like

Very cool idea. Sounds like what Pendle is doing (perhaps we can integrate with them), is PRL also working on something like this as well?


If I’m following right, the crux of what you’re suggesting is “use treasury funds to pay people to hold AMPL or FORTH”?

I can’t say I’m a massive fan. Geysers incentivise useful activity, whereas this seems to be designed to create a temporary price spike.

I think that to “sweeten the deal” for FORTH holders the best approach would be to create a way to allow a user to stake FORTH as LP or deposit it for lending or use it as collateral but then also still retain the corresponding vote power. This lets users put their FORTH to use in the typical fashions without depriving them of the ability to use it for its intended purpose. I would also go one stage further and say that it would be good for FORTH locked up in one such arrangement would grow a multiplier over time that boosted the vote power that the FORTH granted the user - eg. if you stake FORTH for a year then you can use it for twice the voting power the tokens represent.

Yeah, exactly! Both Pendle and Element are offering similar products.

I wouldn’t label it as using “treasury funds to pay people to hold AMPL or FORTH.”

The idea is to augment beyond the Geysers by offering a more Fixed Yield product that is solely denominated in AMPL (being the unit of account in this case).

I do agree with the approach of maintaining voting power for the staked FORTH. I actually like Curve’s veCRV where participants are given x veCRV based on the duration locked/staked.

Curve example:

1 CRV = 1 veCRV if staked for 4 years
1 CRV = 0.75 veCRV if staked for 3 years
1 CRV = 0.50 veCRV if staked for 2 years
1 CRV = 0.25 veCRV is staked for 1 year

I’m a little hesitant about exploring voting power “boosting.” There are currently enough FORTH whales as is - unlocking an extra layer of partiality would be less than ideal in my opinion.

Right, but it would be subsidised using treasury funds rather than developing a self-sustaining mechanism right?

Just to clarify, but with Curve staked tokens lose voting power and steadily regain it up to where they started then? Can’t say I’m a fan of that, it’s just putting obstacles in the way of people who want to use their FORTH for both voting and other stuff and I can’t see any reason to do so.

Take a worked example:

  • Whale starts with 900 FORTH
  • Minnow starts with 100 FORTH

Suppose staking ticks up to a cap of x2 vote power after a year or something, thus after a year:

  • Whale has effective voting power of 1800 FORTH
  • Minnow has effective voting power of 200 FORTH

Damn, the whale has so much more now right? But wait:

  • 900/(900+100) = 90%
  • 1800/(1800+200) = 90%

Both before and after the ratio of vote power between the Whale and Minnow is the same, neither has gained an advantage over the other during this. This long term staking multiplier only confers an advantage to people who have been invested in the project longer over those who have not.

I personally think this works quite nicely.

Brainstorming ideas is always great! Thanks for starting this thread :100:

I really like the ideas introduced by Element finance, Pendle etc of dividing a yield-bearing token into the principal and the “yet to earn yield”. With this distinction we have easy ways to directly bet on interest-rates for specific time frames and products.

Button’s A, B, Z tranches however have a different purpose. They do not divide principal and interest rate, but price risk (or, as the rebase moves price volatility to supply volatility, supply risk). This way people can bet on specific price-ranges (i.e. supply-ranges) for AMPL or ubXYZ tokens.

I honestly do not see the Ampleforth Foundation and specifically not the treasury funds responsible for this. The Geyser is a cost paid the community to incentivize AMPL liquidity, i.e. has a real use-case. A fixed-yield product however has no use-case for AMPL itself, except for paying the community and maybe having small price swings.

As @Fiddlekins already noted a product should be build on a self-sustaining mechanism.

One fixed-income low-risk product the community could build would be to continuously buy A/B-tranches for a discount and wait till maturity to receive the underlying AMPL. The high-risk counterpart would be to buy the Z-tranches…