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How AmpliFi works
A non-exhaustive summary of AmpliFi's current counter-inflationary mechanisms
To create a protocol which offers stabilized yield in perpetuity, the protocol must be designed to manage circulating supply such that it never hyperinflates as holders sell their native tokens into the Liquidity Pool (LP). To do this, the token must be intrinsically valuable, particularly in times of market uncertainty. AmpliFi creates intrinsic value through #AMPLIFI, the native token, by tying it to external sources of revenue. In time, #AMPLIFI can be reasonably expected to mirror and reflect the value of this external revenue which is generated and distributed to holders, such that it becomes so valuable that it only occasionally makes sense for a holder to sell his #AMPLIFI tokens. As a result, the more value-add systems, features, and modules AmpliFi intertwines within the platform, the more valuable #AMPLIFI becomes.
To achieve this, AmpliFi is being released with a cadre of innovative counter-inflationary mechanisms.
By paying holders in both the native token and $ETH, the protocol sets itself apart from earlier "perpetual yield" projects by tying the token's value to an external asset.
$ETH emissions do NOT negatively affect the price of #AMPLIFI. In other words, when AmpliFi pays $ETH rewards to holders, the native token's price is entirely unaffected as the smart contract is not required to sell on itself to liquify #AMPLIFI into $ETH to pay holders.
Amplifiers produce native yield infinitely. Additionally, Fused Amplifiers also generate $ETH rewards for the entire Lock period. To achieve parity between the token price of #AMPLIFI and $ETH, #AMPLIFI tokenomics have been uniquely engineered with Native Logarithmic De-Risking (NLD). NLD activates following a claim on the native token to algorithmically counteract native sell pressure and ensure users continue to earn high native yield. This does not impact $ETH emissions.
Should an Amplifier holder choose to claim repeatedly on an expedited timeline, their native yield slightly decreases each time, allowing them to effectively de-risk their claims relative to future claims while also de-risking themselves as a potential liability to the total pooled sum of holders. Combined with a marginal claim fee – fifty percent (50%) of which is allocated to acquiring new Ethereum validators – the protocol guards against sell pressure, incentivizes fewer claims on the native token over time, and enables users to benefit from a stabilized price floor within a fundamentally groundbreaking asset class.
Copyright 2022. AmpliFi. All rights reserved.
Creating an Amplifier can be likened to renting out your car or truck to individuals for use. For example, to rent out your vehicle, you'll need to first purchase the vehicle (either outright in cash or through automotive financing). Then, you rent out your car using a service like an iPhone app, or through word of mouth to friends or customers seeking utility or personal transportation. The more frequently your vehicle is used, the quicker it ages, and eventually, after the car has several hundred thousand miles on it, the demand to rent your car decreases substantially, even if it still functions mechanically. Customers would notice that after hundreds of thousands of miles, the car may have scratches, dings, dents, cosmetic issues, or that perhaps it doesn't "run like it used to." Perhaps the car exerts some strange noises from time to time, doesn't accelerate as quickly, and after years of driving, has spongier brakes, a worn-out interior, and a loose suspension. While you were able to charge a premium to rent out your vehicle when it was new, now it simply doesn't garner the same interest from customers, who would now pay more for something newer and quicker with better equipment, a cleaner exterior, and a better ride.
An Amplifier works the same way. Like a car, it has an upfront cost (20 #AMPLIFI) and when it's new, it has a very long life expectancy. In fact, the more you maintain it (through monthly fees) and the less you use it (less frequent claims), the longer it lasts. However, like a car being driven and worn out over hundreds of thousands of miles, an Amplifier becomes "worn out" (reduces annualized yield) after repeated frequent claims. Eventually, when it no longer makes sense to claim earnings after your earnings have decreased beyond a certain point, it then might make sense to acquire a new Amplifier to begin generating higher yield again, just like you would purchase a new car to keep your rental business healthy and operational.
Emissions Model on Claim Frequency Decay
At any time, users may increase their total native #AMPLIFI emissions by Fusing their Amplifiers and start generating additional yield based on the tiered Fuse Pool selected. Locking Amplifiers further effectively reduces circulating supply and once again enhances the beneficial price impact of subsequent token purchases.
Likewise, a user may further increase their total native yield by acquiring new Amplifiers. Thus, stable purchase pressure – though never guaranteed – is incentivized through these mechanisms which collectively secure the protocol, protect holders’ interests, and reward patience.
By the numbers: Users may claim #AMPLIFI emissions over 15 times before they risk underperforming the S&P 500’s Annual Percentage Yield (APY); however, Amplifier emissions will never reach 0% unless fees are unpaid. After 15 claims, users may boost their native APY by Fusing their Amplifiers.
Yield Amplification is a "stream of revenue" which is set aside and collected as a % of trade fees, until such time AmpliFi injects or allocates that additional $ETH to be distributed across holders with Fused Amplifiers. As annual $ETH validator yield is objectively conservative, Yield Amplification provides a means to sustainably increase the $ETH yield provided to Fused holders. Yield Amplification is intentded to be variable, and may be higher or lower in 30 day periods with increased or decreased protocol trade volume, depending on the protocol's needs and priorities at the time. At present, Yield Amplification will be the primary device which distributes $ETH rations to holders with Fused Amplifiers until such time that the Ethereum Merge completes and Validators begin accruing rewards.
However, Yield Amplification can also serve a different function, one related to native yield. For example, if cumulative native yield decreases (in $USDC value, either temporarily or permanently) following periods of high-frequency claims (among irrational actors, for example), AmpliFi may increase $ETH emissions with Yield Amplification to counteract the $USDC-based value decrease (transient or otherwise) of native #AMPLIFI emissions.
Every 30 days, $ETH accrued in the Yield Amplification wallet is deposited into three (3) Dividend Trackers, namely those for the 1L, 3L, and 5L Fuse Pools. The amount of $ETH deposited fluctuates each month based on protocol volume, market conditions, and token price stability.
- 1 Year Fuse Pool: Receives 20% of Yield Amplification Deposits
- 3 Year Fuse Pool: Receives 35% of Yield Amplification Deposits
- 5 Year Fuse Pool: Receives 45% of Yield Amplification Deposits
When users claim $ETH accrued from Ethereum Validators and Yield Amplification, they do so directly on the dashboard, not through $gAMP. $gAMP rewards are claimed separately.
TL;DR Using Yield Amplification, the protocol may increase or adjust the anticipated $ETH yield claimable each month by Fused holders, from time to time, by setting aside a subset of existing fees to the Yield Amplification pool and injecting those funds into the Fuse Pools which ordinarily collect $ETH from Validators.
Copyright 2022. AmpliFi. All rights reserved.
Imagine a Cashback Credit Card offering holders 2% Cashback rewards, 1% for every time you charge consumable goods on the card and 1% each time you pay off the full balance before the end of that month's billing cycle. The Credit Card company (the bank) usually charges retailers about 2.9% on each item sold, plus 30 cents. The bank does not pay rewards to the Credit Card holders by reducing its own profit, nor does it pay the Cashback Credit Card holders using their own funds. Instead, a Cashback Credit Card works by financing and rewarding the individuals with a high credit score who pay off their full balance each month using the fees generated by that bank's credit card holders who do not pay off their balance each month. When a holder does not pay his full balance, the Credit Card company charges interest and late fees, and allocates a portion of that revenue (once collected) to paying the individuals with the Cashback Credit Card who pay on time. This same concept is applied with traditional bank accounts, which generate "rewards" to high net worth users or those opening a new account through Overdraft Fees, Minimum Account Balance Fees, and monthly maintenance Fees.
Yield Amplification works similarly with AmpliFi. Fees and revenue generated by day traders, swing traders, spot holders, speculators, stakers, liquidity miners, and those with unfused Amplifiers - are pooled and distributed at variable rates to holders with Fused Amplifiers. Just as a Cashback Credit Card does not pay a % of rewards to everyone, the same applies to AmpliFi's Yield Amplification, which only rewards those who pay their monthly operations fee and hold at least 1 Fused Amplifier.
Cashback Credit Cards and Reward-bearing Bank Accounts are entirely lawful, and would not be considered a pyramid scheme, but rather, capitalism at work. AmpliFi's Yield Amplification works the same.
Enables smaller holders who might otherwise sell #AMPLIFI for a gain or loss to generate aggressive yield while providing utility to the Liquidity Pool, attracting larger holders.
Copyright 2022. AmpliFi. All rights reserved.
AmpliFi seeks to aggressively accumulate validators to distribute rewards to holders and introduce a variety of innovative DeFi mechanisms which encourage holders to retain their native $AMPLIFI yield, as some yield may be required to use future modules which pay rewards in external assets. As a result, AmpliFi must include marginal fees to facilitate growth, amplify external yield to holders, and stabilize the value of the native $AMPLIFI token. An exhaustive list of these fees is shown below.
- Base Claim Rate
- Includes randomized PCR to reduce % supply in Liquidity
- Amplifier Monthly Operations Fee
- Amplifies emissions
- Time Decay Early Withdrawal Penalty
- Guards against #AMPLIFI dilution
- One-Time Locking Fee
- Amplifies emissions
- Mining Program Entry/Exit
- Amplifies emissions (temporarily ceased during liquidity bootstrap phase)
- Claim Frequency Decay
- Guards against #AMPLIFI dilution
- Variable Sell Taxes
- Includes randomized PCR to reduce % supply in Liquidity
- Fixed Acquisition Costs
- Includes randomized PCR to reduce % supply in Liquidity
- gAMP Claim Fee
- Supports DeFi Module Development
- Amplifier Creation
- Amplifies emissions
- Unpaid Fees
- Redirects $ETH and $gAMP yield to those holding Locked Amplifiers who are current on monthly fees
For an in-depth explanation of each fee and to learn where fees are allocated, view the page on Protocol Fees and Expenditures.
Linear Decrease in Penalty to 0% over 72 Days
After 72 days, you can claim $AMPLIFI rewards with no time decay fee. Here's why: AmpliFi employs a "Gamma Expiry" feature called "Time Decay." In AmpliFi's time decay model, a holder is subject to a % fee if he claims native rewards before 72 days have passed. However, that fee decreases every day, as shown in the graph below. While Base Claim Fees are payable in $ETH, time decay fees are not actually "payable," but are instead subtracted from the quantity of $AMPLIFI rewards you would have claimed. Together, the base claim fee and time decay fee help to guard price stability without impacting investors' potential profit capture.
Similar to some traditional equities markets, after a 75% reduction in the value of #AMPLIFI, the smart contract will pause trading for 12 Hours as a “cooling period," providing an opportunity for the protocol to initiate rescue liquidity injections. The Circuit Breaker will not be activated for several weeks following launch, as launches are naturally subject to major price fluctuations.
At present, the Circuit Breaker is "OFF," until sufficient time has elapsed such that the free market determines the Fair Market Value of #AMPLIFI.
The gAMP Governance token is reserved exclusively for investors who lock their Amplifier into a Fuse pool for between 1-5 years. gAMP encourages converting #AMPLIFI to an Amplifier as it distributes yield to holders based on trade volume and provides Governance and Voting rights to holders proportional to the number of gAMP tokens they've accumulated. Once the lock expires, gAMP ceases to pay yield, meaning that holders must lock again to generate gAMP rewards again. For more information on Governance and Voting, click here.
PCR is a protocol-initiated buyback, but for a different purpose. Ordinarily, a buyback is initiated to stabilize a token's price, but is sometimes misused by malicious market actors to "sell into" the buyback. With AmpliFi, the purpose is distinct: to reduce the supply in the Liquidity Pool, the Circulating Supply, and the Total Supply, and to remove those tokens from circulation entirely. As an indirect side effect, the value of #AMPLIFI may increase.
How it works: AmpliFi conducts occasional purchases of #AMPLIFI. When AmpliFi's PCR wallet accrues 20 #AMPLIFI, those tokens are redeemed for an Amplifier. The fees on the newly created Amplifier are left intentionally unpaid, however, and after 60 days, AmpliFi forefeits the unclaimed rewards and the Amplifier ceases operation and is destroyed. The net result? The 20 tokens used to create the Amplifier are destroyed with the Amplifier, causing a direct net-reduction in available supply.
Where possible, fees are structured so as to not incur a liquification of the #AMPLIFI token for $ETH or $USDC. Virtually all Uniswap V2 smart contracts with a tax rely on "swap-and-liquify" mechanisms which sell a portion of native tokens, generally into $ETH. AmpliFi recognized this as negatively impactful to price stability, and implemented a new kind of mechanism, called ZLM, such that, when possible, fees are added as a premium onto a transaction rather than as a consequence of liquidating native tokens. The result is added stability to the AmpliFi platform and added value to the native #AMPLIFI token.
AMP is the built-in mechanism that constantly removes #AMPLIFI tokens from supply as new Amplifiers are created. When a holder acquires 20 tokens and redeems them through the AmpliFi Dapp for an Amplifier, those tokens are permanently removed from circulation. This directly affects the market cap and true total and circulating supply of #AMPLIFI, whereas merely "burning" tokens (as seen in all other projects) does not. In reality, "burning" tokens simply most often entails sending them to a wallet without an owner, known as the "Dead Address."
As the Rewards Pool nears exhaustion, AmpliFi will incrementally refill the rewards pool in small, segmented intervals until the pool reaches 50-75% capacity.
When just 5% of the rewards pool remains, AmpliFi refills the pool by 10%, totaling approximately 15% the original pool. Each time the pool decreases by 1% (from 15% to 14%), the pool is refilled another 10% (from 14% to 24%), and then refilled 10% again following another 1% decrease (from 23% to 33%), and so forth, until such time the pool reaches 50% its original capacity. At this time, the variable sell fee will be reorganized, with the express intent to maintain the refilled pool at no greater than 50%-78% its original starting supply, and reset the tax fee structure from its 3% standard thereout.
Pool Replenishment Schedule
- 5% Supply (+10% = 15%)
- 15% Supply (-1% = 14%); prompts 10% injection (+10% = 24%)
- 24% Supply (-1% = 23%); prompts 10% injection (+10% = 33%)
- 33% Supply (-1% = 32%); prompts 10% injection (+10% = 42%)
- 42% Supply (-1% = 41%); prompts 10% injection (+10% = 51%)
- 51% Supply (-1% = 50%); may prompt 10% injection (+10% = 60%)
- 60% Supply (-1% = 59%); may prompt 10% injection (+10% = 69%)
- 69% Supply (-1% = 68%); may prompt 10% injection (+10% = 78%)
Beyond the scope of Pool Replenishment, AmpliFi designed the smart contracts underlying #AMPLIFI to reserve the option to create new #AMPLIFI tokens in the event the price of #AMPLIFI becomes unreasonably expensive or cost-prohibitive to the average DeFi market participant, or if emissions temporarily outpace deflation, or in the event #AMPLIFI seeks to move cross-chain. However, the AmpliFi team shall never raise the total supply without a governance proposal following an open-forum style discussion; many years of emitted rewards may ultimately slightly raise supply if emissions outpace deflation for a time period, though whether to alter supply is ultimately left up to a governance vote. Emissions may outpace deflation temporarily if new Amplifiers are not created to effectuate the burn mechanism, likely reducing token pricing an provided an opportunity for smaller holders to enter the protocol, effectuate the burn, and initiate a new 'economic cycle' within #AMPLIFI. Thus, it is highly unlikely the total supply would need to be adjusted for the foreseeable future.
Read "The Amplifier's Guide to AMP" to learn more about Minting, Pool Replenishment, and Alternating Monetary Policy (AMP) here.
Coming Soon...
Over-The-Counter (OTC) Trading will offer the opportunity to buy/sell #AMPLIFI tokens off-exchange, through a Smart Contract Escrow Service. #AMPLIFI Holders benefit from high security and no risk of front-running. Tokens are exchanged for $USDC or $ETH directly with zero slippage, instead of going through the Liquidity Pool. This enables larger holders to off-load their tokens as needed without negatively affecting smaller holders. Unlike through Uniswap or a DEX, 100% of these #AMPLIFI tokens are burned or removed from circulation, effectively decreasing circulating supply and further protecting holders' interests.
On top of price protection, gAMP holders will benefit from a 25% sell tax reduction while using the OTC Swap service. Access to the OTC swap will first be offered to gAMP holders on a first-come, first-serve basis.
- 1% of Fees directly finance Validator Acqusition
- 1% of Fees directly finance Technical Development
- 1% of Fees directly finance Operations
- 1% of Fees directly fnance $gAMP rewards
- 1% of Fees directly finance Marketing and Protocol Improvement
- .5% of Fees directly finance Yield Amplification $ETH rewards
- .5% of Fees directly finance PCR and Rescue Liquidity Injections
Most ERC-20 tokens are paired against $ETH. As a result, when the price of $ETH decreases, the price of the token decreases as well simply because the 50%/50% Liquidity pairing (applicable to Uniswap v2) must decrease as a collective unit. This is not the case with #AMPLIFI, as #AMPLIFI is paired against $USDC; as a result, when $ETH decreases in value, while holders may sell fearing market uncertainty, the price of #AMPLIFI does not automatically decrease, thanks to the $USDC pair which maintains a stable peg at a $1 USD equivalent.
Likewise, even when the price of $ETH decreases, the Swap and Liquefy mechanism underpinning the #AMPLIFI smart contracts will thus swap more $ETH to reach the same value. Because of this, AmpliFi holders may actually accrue more $ETH during market turndowns (as does the protocol), all other factors constant.
The Federal Reserve's inflationary monetary policy has resulted in the simultaneous devaluation and dilution of the US dollar. However, inflation is only harmful when it expands the Total/Maximum supply and causes a dilution in the currency's value.
For example, $1 USD today is worth substantially less than $1 USD in 1945 because the Federal Reserve expanded the total monetary supply over time (and removed the gold standard, but that’s a story for another time). This means $1 USD became “smaller” and less valuable proportional to the ever-expanding total supply, causing “savers” to actually lose money and forcing individuals with minimal liquidity to invest their capital just to keep pace with the inflating supply.
In short - The Federal Reserve clearly has no intention of incorporating a maximum supply, lessening the value of each dollar in perpetuity, and causing an iced latte to cost $17.95 in 2022.
Source: U.S. Bureau of Labor Statistics. For Educational Purposes only.
It's time for a different type of monetary system. AmpliFi introduces the first-ever Alternating Monetary Policy (“AMP”), purpose-built to maximize sustainability and guarantee high yield. AmpliFi constantly burns supply with each #AMPLIFI purchase, strengthening net-positive price action and reducing sell pressure. The protocol may infrequently and proactively refill the native $AMPLIFI Rewards Pool to maintain a stable emissions rate.
Although holders may create a theoretically infinite number of Amplifiers, the protocol remains net-deflationary as a result of each Amplifier's intrinsic burn mechanism. All tokens are automatically burned when a holder converts their 20 tokens into an Amplifier, perpetually reducing supply. Additionally, when a holder joins a Fuse Pool with their Amplifier, the net circulating supply is reduced even as they begin accruing $AMPLIFI and $ETH emissions from the protocol’s Ethereum validators.
To draw a parallel to the 1945 USD example above: $AMPLIFI is engineered such that $1 USD today would be equally as valuable as $1 USD in 1945, when mean home prices were only a few thousand dollars. Imagine if the US Dollar was as powerful now as it was in that era. With $AMPLIFI, it is.
Copyright 2022. AmpliFi. All rights reserved.