$1.37 -19.07%
AMPL · 18w

Critical risk nobody is considering when staking Ampleforth..

Read the TLDR if you dont want to read all this. With bitcoin their is an incentive to stay in the network ("staking" your fiat in bitcoin) because the farther the price of bitcoin goes down, the greater an incentive it would be to buy the coin because the price is lower. Because of the increasingly greater incentives to buy bitcoin at an increasingly lower price, there would be no drying up of incentives for buying bitcoin, so bitcoin will never go too extremely far down. However, with this coin things are different. When things start to dry up or the price goes down, when people decide to pull out, not only will the market cap go down but there is an opposite incentive compared to a decrease in price for bitcoin. If you are still staking while people stop staking and start selling because the price is going down, you will be disproportionately and exponentially effected. For example lets say that the rewards are 20% ampleforth and then the next day rewards are -20% ampleforth. If 20% of users stop staking because -20% is too much of a loss then rewards become -25% ampleforth instead for the remaining users. Maybe -25% ampleforth is too much for some users so another 20% stop staking and the rewards are now -31.5% ampleforth. Notice that the negative rewards become exponentially severe as people leave. This effect will start to become severe and people will be forced to leave staking (and perhaps also have an incentive to sell if they think the price is high at like $3 going to $1 or 1$ going to 50 cents) unless they want to lose everything. At some point, the daily % loss is so much that you will need to leave the network or else become completely liquidated and lose everything. Either that or people will realize network participation is so volatile that they simply will not want to stake, and staking is the difference between stable coins and this coin. If people dont want to stake because of exponential volatility, then the market cap goes darastically down. I ...
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AMPL -19.07% · · 4h

AMPL launching on Tron, Polkadot & NEAR

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