New idea for Wrapped AMPL conversion/additional incentives

Hi everyone,

Really enjoy the last AMA. Had me thinking quite a bit and been having thoughtful discussions with fellow Ampl community member Peyman.

We had some potential concerns with name of wrapped Ampl. Typically in crypto when an asset is wrapped, we expect it to be 1:1… wBTC= 1 btc, 1eth = 1weth… so perhaps it can be confusing. How do we brand such as to not cause confusion? Especially with a wAMPL which can pontentially go to $.20 cents or $20… May make matters worse. Perhaps we have something like MarketCapAMPL. Still thinking of ideas but share below ideas.

Also we were discussing the conversion from AMPL to wAMPL. There will certainly be quite a bit of arbitrage opportunities. Perhaps we can think of a way to create a buy back from the fees generated from arbers wrapping and unwrapping… and use those fees to market buy back Ampl (h/t Peyman) Let’s have some thoughtful discussion here and think of ways of creating more value to community and holders. @Brandon @evankuo @ForkingBlocks

2 Likes

Hm, good point about the connotation of wrapping being a 1:1 exchange. Are there any examples that already contradict that behaviour? (Probably not)

MCAMPL - MarketCapAMPL
FrAMPL - Fraction (of) AMPL (supply)
PAMPL - Percentage (of) AMPL (supply)
E - to fill in the missing letter left behind by AMPL and FORTH
Standardised Contract AMPL

Can’t say I have any good suggestions, and I think WAMPL still rolls off the tongue a bit better…

Regarding the arbitrage opportunities, could you outline how you imagine those to work please?

1 Like

About the wAMPL wrapping connotation:
This is a good point! :100:
From my understanding wrapping is the process of representing a currency in a different format, e.g. ETH to WETH (native currency to ERC20), BTC to wBTC (UTXO currency to ERC20).

Wrapped AMPL however would be the same ERC20 standard as AMPL. This would break the current connotation.

I like @Fiddlekins idea of mcAMPL. This would point out the non-dilutive nature of AMPL which is harder to grasp than, e.g. BTCs non-dilutive by having a fixed supply mechanism.

If wrapped AMPL is a non-rebasing token representing a percentage of the supply, there must be a fixed supply for the token itself too (or am I mistaken?).
If so, mcAMPL would be kinda like BTC itself and could be a good entry point for newcomers as the concept is more widely understood (i.e. uncollateralized and non-dilutive (sound) money).

From there we could better promote Ampleforth’s (the protocol) properties of being blockchain-independent and simple-rule based. This could become a great unique selling point in the more and more fragmented crypto ecosystem (Different L1s, Layer 2s, sidechains, shards).

About the arbitrage opportunities:
I think they would arise as soon as liquidity is provided in wrapped AMPL. Simple AMMs can not include information about AMPLs market cap and would need arbitragers to adjust the price.
However, this would not be a new problem and could for example be solved with Balancer smart pools.

@andrew I’m failing to see arbitrage opportunities in the wrapping process itself. Could you elaborate on that point a bit more? Also, I do not understand why there should be a fee involved in the process. Was this mentioned at some point? Do you think Ampleforth, the protocol, should try to build a cash flow?

Hm, good point about the connotation of wrapping being a 1:1 exchange. Are there any examples that already contradict that behaviour? (Probably not)

There are a few examples, depending on how you look at it. Lido’s WstETH is probably the most direct. stETH works a bit like Aave’s aTokens, where the balances update to account for earned interest to maintain 1:1 with the underlying. WstETH is a non-updating version of that.

There are other more prominent wrapped tokens, like CETH, who’s value diverges greatly from the underlying, though some people might not consider this a wrapper since it has extra functionality.

One way to avoid confusion is to set the maximum WAMPL supply such that the market price of 1 WAMPL is sufficiently far enough away from AMPL’s price target that the difference is clear. It’s hard to confuse a token that’s $1.05 with a token that’s, say, $50.

Regarding fees for wrapping or unwrapping… it’s an interesting idea. I worry that it could have negative effects on the marketplace health, though.

If one considers AMPL to be the reference asset… if a wrapped version needs to pay a fee to unwrap then it should have a lower value in the market than the associated underlying AMPL would. The “MC” part of MCAMPL would no longer be true. There would be a similar divergence if there were a fee on wrapping.

Also, there may be many users of WAMPL who don’t know they’re using it. In the cases where smart contracts are simply using WAMPL under the hood, below the user interface level, then suddenly there are surprise fees to the “AMPL user” that are not quoted in that interface. This could cause a lot of frustration and broken integrations. Some fee tokens have caused many problems, like drained AMM pools. We don’t want to invite this to happen with WAMPL as well.

3 Likes

As far as names go for Wrapped ampl, I think wAMPL or mcAMPL are the most descriptive names, and should be preferred.

E/scAMPL are hilarious, but probably not the best idea to name the token that

As far as arbitrage goes, I don’t see where any arb opportunity would arise in wrapping/unwrapping ampl, could you describe what arbs you’re seeing here?

2 Likes

The thing about single letters (pAMPL) is, some platforms already reserved those single letters. I am guessing it is difficult to integrate sAMPL and iAMPL with SNX.

Since AMPL wants to be a base money everywhere, we should also keep in mind that newly built platforms can reserve other single letters too. (One exception is wAMPL, because w already means “wrapped”)

So, I support more letters, like mcAMPL.

Thanks for bringing them up! rETH, a derivative that will have staked ETH as underlier, would be another example too.

However, one important difference to these non-updating wrapped tokens (rETH, wstETH) is that their value is increasing continuously in reference to their underlying token as they are yield-bearing. This would obviously not be the case for wrapped AMPL.

That’s a good point! :100:
I would propose a supply that also makes it easily readable how much of AMPLs supply is wrapped.

For example: If wAMPLs total supply is 1,000,000, owning 100 wAMPL would be equal to holding one basis point of AMPLs supply.

Having a lower wAMPL supply could lead to a number bias, as a single wAMPL would develop a high value in terms of USD. You can how this challenge is tackled in the Yearn community with their Woofy token. We should try to avoid this problem in the beginning.

mcAMPL is growing on me.

1 Like

I would propose a supply that also makes it easily readable how much of AMPLs supply is wrapped.

We’re thinking along very similar lines, actually. We’ve thrown around different powers-of-ten, but are leaning toward 10M because of the YFI price problem you mention. 10M might have a slightly friendlier per-token price.

1000 wAMPL would be 1 basis point in this world

3 Likes

Glad folks are excited about Wrapped AMPL, I’m pretty optimistic that this will open up platform access down the road. That being said, when I first said “wAMPL” out loud, I couldn’t help but feel a bit silly and laughed :sweat_smile:

@Fiddlekins “E - to fill in the missing letter left behind by AMPL and FORTH” :joy:

Having said it about 100 times in daily touchpoints now, I admit wAMPL is kinda catchy. My sense is it has the benefit of drafting off of wBTC, which as you’ve noted isn’t a perfect analogy, but has the authority of being widely listed and official-sounding. My worry with other prefixAMPL takes, is they risk sounding kinda like clones? McAMPL tho :rofl:

Love the discussion, it’s a fun / tricky one.

4 Likes

Swample for Ron Swanson!

I actually like wAMPL quite a bit… and since everyone is used to wBTC and weth. It’s simple to get. WAMPL for the win

2 Likes