Proposal: AmpleSense AMPL Grant

Yes, a small percentage of rebased AMPL emissions (2%) does go to Pioneer vault holders.

It’s similar to other protocols that have inherent reward mechanics that are complimentary and an adjunct to its main purpose.

Overall, we argue that the benefit to the FORTH DAO of supporting the growth of the ecosystem, and this particular protocol are significant.

No what incentivizes participation is real yield, like geysers. The USDC/AMPL balancer pool is an example of this. It also has a bit of a hedge because it sells into USDC, and gradually buys back AMPL as the price increases. Things that drive yield to AMPL holders attract participation. This is more like a bad trading strategy that forces AMPL to sell into some random coin that we still don’t know the value yet. It doesn’t generate cash flow like AMMs which charge a fee for providing liquidity. We don’t need ForthDAO’s resources being put in to some arbitrary trading strategy that funnels capital into a small coin that has still not proved itself to not be a low key ponzi. If at some point EEFI can prove itself to be some asset to the ecosystem maybe this can be revisited. But as it stands right now it is of my opinion it does not provide value.

You can keep the same mechanics but instead of making a random coin EEFi, hedge by buying USDC on the way up, and implementing a trading strategy that way. Or A tranche when there is liquidity. Not a random coin that was created so savvy traders can buy into preemptively to get the upside and hope the previous holders don’t dump before them.

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Mr. Bambridge, thank you for providing your perspective. There are people who feel the opposite, but I’m happy you’ve had a chance to provide your opinion. We do admit that the overall strategy deployed by the Elastic Vault from a hedging and incentivization perspective is unique from other strategies. You can think of it as for the “Little Guy”. That is what makes us unique.

It relies completely on AMPL’s natural rebase mechanics and looks to reinforce the economic incentives already in the protocol while making it dead simple to use. Key Phrase: Dead Simple to USE. Now its time for me to be blunt. With all due respect, not everyone is a 10x trader, 10x Big Brain Strategist who always wins as yourself. For everyone else who has to live down here, the Elastic Vault is a dead simple hedging mechanism especially for Negative Rebases which can be unforeseen. The Elastic Vault allows for a balancing act when it comes to profiting or retaining value during AmpleForth’s rebase statuses which does not require anyone to be Warren Buffet. And gives individuals an option to STICK WITHIN AMPLEFORTH WITHOUT SELLING.

From a FORTH DAO perspective, this particular mechanic provides greater diversity in the ecosystem and can live along other strategies like the one you described. None of them are mutually exclusive and can be used synergistically. I know it can be a little uncomfortable that the Little Guy now has a chance to compete but step outside yourself. The Elastic Vault may not be for you, but it’s certainly for everyone else.

I’ve been a fan of AMPL since a long time a go, and what Amplesense team is developing and trying to implement with the Elastic Vaults seems incredibly smart. So if a comment supporting Amplesense team and another AMPL supporter coming here speaking in their favor, please count me in.
Go AMPL, Go DAO, Go AMPLESENSE! All together we’ll be really strong in developing the next generation of financial instruments and money.
Best to all.

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What benefit does using EEFI have over hedging into a stable coin? I don’t have a problem with the positive rebase hedge. I agree hedging is good, and this will force people to take some profits. But hedging only works if it’s done intelligently. You keep on talking about hedging but buying into a random coin that was created with much lower liquidity and that’s potentially very volatile instead of a stablecoin or A tranche makes 0 sense to me. Therefore I will fight tooth and nail to make sure we don’t but the Forth DAO in a position where it is selling AMPL needlessly.

If the vault is good people will deposit without the need for funding from the DAO. The returns need to be tested first before recklessly throwing the DAO’s money at it.

Sorry I’m being so harsh, but I honestly have the best interest of Forth DAO at heart. I don’t enjoy being harsh and critical but this has triggered with so many red flags I can’t keep quiet. I know you guys have put a lot of work into this but I think it would have made sense to do more user research and peer review on the protocol before committing so much resources to it. When I saw the flow chart I was honestly shocked but didn’t want to say much at first to make sure I understood it a bit better.

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First of all, great to see such an active discussion and respect for proposing this application to all folks who worked on it! :muscle:

Now to the proposal itself. From my current understanding of the elastic vault I have to agree with @kbambridge in that I do not see any benefit for the ForthDAO by supporting this proposal.

As far as I understand, the elastic vault mints EEFI tokens when Ample is in negative or neutral rebase territory. If Ample rebases positively, the minted Ample is sold for ETH to buy and burn EEFI.

If we assume that the goal of having Ample most of the time in neutral rebase area is achieved, this would mean most of the time EEFI tokens are minted. The goal of the ForthDAO is, among others, to increase Ample market cap. Therefore the happy path is that EEFI gets continously minted with short periods of positive rebases in which Amples get sold. By all means, this does not sound sustainable for me and definitely not beneficial for Ample, but please correct me if I’m wrong with my assumptions and/or understanding.

While this statement may be true in nominal terms I do not believe such a system is possible if measured in terms of purchasing power/value. As mentioned above, EEFI supply seems to be only growing if the ForthDAO’s goals are achieved and, if nothing else about EEFI changes, therefore dilute in value. However, time will tell and I’m happy to be proven wrong.

Why should ForthDAO have an additional method of exposure which introduces new risks?

This seems to contradict the statement above.

Summary:
I think the ForthDAO should wait until the elastic vault has been running for some time, i.e. became Lindy. Currently I see too many red flags for an investment in EEFI.

Other things I noted in this discussion here and in the discord channel (interpret in any way you like):

  • There seems to be a lot of focus, or at least mentions, of the time the AmpleSense founders are already in the Ample community. I do not think that this is something that has great meaning in terms of whether a protocol/product is working and supporting it is beneficial for the ForthDAO.
  • I won’t be able to put this into words properly, so please try be as understandable as possible here: Compared to other discussion, there seems to be a lot messages focusing on “creating good vibes”, “showing respect”, naming community members and stating unprovable things.
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Again thank you for your opinion and perspective. We again have gotten completely opposite sentiments than the ones you have expressed here. Especially when it comes to design and social incentives built within the Vault. Every utility built for AmpleForth is a bad design if you assume AmpleForth is going to fail. Unfortunately it sounds like you are approaching the Elastic Vault and its mechanism from that hidden perspective. I don’t fault you for this. A lot of folks in the community have a sort of PTSD from Negative Rebases and unfortunately adopt this view that all selling is bad selling. The Elastic Vault is one piece of a larger puzzle that will unfold over the coming months to support AmpleForth back into its rightful place at the top of our market. It is designed to work in unison with other Vaults and platforms including Aave AND SPOT. I’m very excited for EEFI/SPOT synergy! Thanks again for the discussion.

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I am sorry if my response comes across as blunt but I am very much against this proposal.

I don’t see how the goal of “acceleration towards external utilities for the $EEFI token” aligns with the goals of the FORTH DAO.

As it stands it is very beneficial to two external entities (Amplesense DAO and the EEFI token) but not beneficial to the FORTH DAO. In my opinion it directly weakens the FORTH DAO.

Lets take a look at the benefits:

  • 30% of the rewards earned buy the 275k AMPL paid in some obscure token and some ETH (not sure how much of each)

I’m sorry but this is not a benefit to the Forth DAO or FORTH token holders. This does not “Bolster the FORTH DAO’s Treasury”, it weakens it.

It removes 3.5% of the AMPL in the treasury (at a time when UST is bringing the algo stablecoin narrative back into the limelight and SPOT is on the horizon) in return for 30% of rewards paid in some obscure token.

It directly weakens the treasury and thus the FORTH DAO and the value of the FORTH token.

AMPL may soon be back at a $500M marketcap and beyond. Then the cost of this grant is $1.5 million from the treasury.

  • a promise to “Incentivize Ampleforth ecosystem expansion and utilization” that would be out of the control of the FORTH DAO

Again this is not a benefit. The FORTH DAO can do this directly without having to go through Amplesense as a sort of middle man.

An example given in the proposal is the new ElasticSwap AMM, but the AMPL team has already partnered with ElasticSwap by committing $1.5M worth of liquidity for the ElasticSwap launch without needing to go through Amplesense DAO to do this.

  • a “strong signal to the community”

This is unmeasurable. Who knows if this is a benefit or not, there is a lot of abstract and intangible language around this proposal and in discord discussions, along with references to time served in the community that imo have no place in a serious proposal for funding.

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I think EEFI is more like a 90-day option of AMPL, you can use it to hedge risk, I agree with this proposal, because this is an important part of making AMPL ecosystems more STABLE: Using AMPL, not Holding~~

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How to grow the market cap of AMPL and don’t use it? How to grow market cap without cooperation? You are just a lazy Holder, and hope that AMPL is like MEME COIN to the moon without no reason, then you can get a lot of USDT~

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I really appreciate the time and effort Amplesense has put into this. I think building something to address the negative rebase is a honorable effort. I think the team is definitely well intentioned and wants to see Ampl advance.

But…

Im not a huge fan of Ampl being sold and never rebought from the vault perspective. I would be in favor if the mechanics were changed to buy Ampl or one of its derivatives at some point in the process.

With that said, with the current mechanics, I am not in favor of funding from the Forth DAO for this.

I feel that any funding from the Forth DAO has to be a 100% home run net positive for Ampl and Forth holders.

With the EEFI yield, theres no guarantee the staker will use that to reinvest in the Amplverse.

If the mechanics are reworked in such a way that 100% guatantees a net positive for the Amplverse, im all for it.

Thanks

Pascal , like davoice say , we have that in mind to make a proxy contract like a zap button to rebuy ampl with the eefi , but we need to create a eefi/ampl pool first . and by the way it is up too the ampl staker to rebuy when those think it is the best moment to increase there ampl position with that hedge , the point is everybody dismiss the fact that we lock ampl for 90 day out of market and just sold little % of the rebase .fast trader do way more they let’s us dry … what is wrong ? the fast trader like everybody think , is not intitle to rebuy ampl from market if they think money can be made elsewhere , on the other side ampl depositor into the elastic vault have a interest doing that .

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I like the fact that buying Ampl with EEFI has been discussed and thought of. If this becomes a part of the vault mechanics it has my vote

may be most critic will be more confortable with a sum test , 1/3 exemple of that ampl grants is deposited into the elastic vault for 90 day ,and the forth dao holder still retain ownership of those ampl . the yield in form of eth and eefi earn be redeployed into the creation of that lp eefi/ampl pool and eefi/eth lp own be the forth dao ,those lp will earn yield too , idea throw there , those ample will support the vault fonctionnaly , the forth holder still retain 100 % ownership of those ampl ,but still support the fonctionnaly of those vaults with lp position earn from the yield .yeah the yeild come from the vault acting like a fast trader , but a fast trader that don’t put big selling pressure because the vault sold only a little portion of the new ampl .on the other side , real fast trader trend to liquidate all in one and move on other thing .

I also like the idea of using a vault structure to automatically sell AMPL above price target and buy AMPL below price target. The critical problem with the current AmpleSense vault, from the perspective of AMPL holders who are not part of the AmpleSense ecosystem, is that their vault generates guaranteed selling pressure on AMPL but no guaranteed buying pressure to counterbalance it. Until the vault adds the ability to re-buy AMPL, people have no way of knowing that this just won’t result in downward pressure on AMPL during positive rebases. The AmpleSense team are only speculating that their vault users will re-buy AMPL, they have no proof.

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Thanks everyone for the feedback and conversation.

What we want to do is wait to hear from all interested parties about the current proposal before we decide on how we might revise it in light of these comments.

These are the key things I’m hearing right now:

  1. Control of the EEFI generated by the vault by the FORTH DAO: This can be addressed
  2. KPIs and accountability measures: This can be addressed
  3. Vault mechanics: We have discussed creating mechanisms for vault holders to sell EEFI for AMPL at certain points. There is a great interest among Elastic Vault users in this utility. However, building this utility on top of the Elastic Vault will require additional development, security audits, etc, and funding. Perhaps the FORTH DAO can help in this area.

What we’re going to do is wait to hear additional constructive feedback and advice on the proposal from all interested parties before moving forward on next steps. We want to see how we can address feedback in the most efficient way possible and move the proposal process to a successful conclusion.

Thanks and we look forward to hearing from other community members about the draft proposal.

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Firstly, thanks to the AmpleSense team for proposing this grant, and thanks to the community for the discussion.

From the posts above:

It seems to me that there are members of the Forth DAO who are hesitant to grant 3.5% of the AMPL in the treasury.

I suggest an amendment to the proposal. The Forth DAO should instead grant the equivalent amount in FORTH tokens.

I understand that the Elastic Vaults only accept AMPL. So, I am suggesting we somehow swap enough FORTH to get 275,000 AMPL, then deposit that in the Elastic Vaults. The Forth DAO still loses some value from its treasury, but it does not lose 3.5% of its AMPL.

Edit:

  1. The numbers may have to be recalculated to account for any positive rebases resulting from the FORTH → AMPL swap.
  2. Other market participants may frontrun the swap. This extracts value from the swap. Measures should be taken to prevent this.

Ironically this is what we were originally going to suggest LOL. Until the AMPL deposits were made known for the FORTH DAO. We assumed it would just be easier. This could obviously be done and taken into consideration with the goal of getting somewhere between 220k-275k AMPLs. Appreciate the response Coldpresss. As DaVoice just noted we are going to wait for all parties to express their positions on this current Grant Proposal then move forward.

I dont think anyone is worried about if the funds are given in forth vs ampl. From everything I’ve seen it appears the major concerns are:

  • Forth DAO has little or no control over the rewards
  • EEFI token value is unknown at the moment
  • There will be guaranteed sell pressure on ampl but no guarantee of it being bought back.

I think a possible solution is, for the team to instead ask for a grant paid in forth to build out new vault functionality that works more in the favor of pure ampl/forth holders.

Thank you Sunbreather for the constructive criticism. By this above sentence are you only referring to a possible proxy contract/zap button that would automatically allow anyone to repurchase AMPLs with EEFI? Or was there some other type of Vault you were thinking about? Thanks!