Greetings AMPL governance community,
This post summarizes ACCP-4, a proposal to add Tellor as an additional oracle to the Ampleforth system, and focuses on the reasoning behind it. Please refer to the actual proposal for more details.
The goal of this adding Tellor is to further decentralize the protocol and create a more robust, censorship-resistant price feed. Tellor is a decentralized oracle that uses a network of staked miners who compete to fetch off-chain data and place it on-chain.
We propose that Ampleforth will use Tellor to bring on two values: the AMPL/USD value and the US Personal Consumption Expenditures (a key measure of inflation). The values will be medianized with the current price feeds provided by Chainlink and the Ampleforth team.
In order for AMPL to do its daily “rebase,” it requires a price of AMPL/USD on-chain so that the protocol knows how to adjust the supply. It doesn’t peg directly to the dollar, but rather an inflation-adjusted dollar. Using the US Personal Consumption Expenditures Price Index, it can track the value of the US dollar versus costs. This means that AMPL will still hold a stable value versus goods and services, even if the US dollar collapses in value. There is no reliance on traditional banks or lenders of last resort to guarantee liquidity.
As an oracle that specializes in decentralization and censorship-resistance, we believe adding Tellor into the system greatly helps Ampleforth’s own efforts of decentralization and adds further security and robustness to the price feed.
In order for the Ampleforth community to fulfill their vision as a decentralized financial primitive, the censorship resistance of the protocol must be the first and foremost priority. The communities of Tellor and Ampleforth have similar drives towards and beliefs as to what constitutes a decentralized protocol and the ability of the two projects to work together will help further the entire space.
Tellor’s system is a completely on-chain data feed that can be accessed by Ampleforth smart contracts. The design for integrating Tellor into Ampleforth includes creating an adaptor that pulls values from Tellor and pushes them to Ampleforth’s oracle medianizer, and configuring this adaptor as a new provider in the medianizer. Additionally, changes to Tellor are needed, which include an off-chain mechanism for both calculating the Ampleforth price and the CPI update as well as automated software for maintaining the liveliness of the oracle in a decentralized manner.
Tellor added the AMPL/USD price calculation in mid 2020 and has been updating it since and they have also created scripts for automating the price updates before they are needed by the AMPL system.