AMPL — as a psychological gauge
The human psychological source can be very beautiful from an artistic point of view.
Just to give a flavor to the banner image, it is interesting that the rebasing aspect can work as a metaphor for Neuroplasticity but from an economic point of view.
Neuroplasticity is the brain’s ability to create and reorganize synaptic connections. Neuroplasticity activity is mainly stimulated during experiences and learning or even after brain damage. AMPL rebasing producing changes in the personal quantity of users causes a similar effect to the creation of brain synapses after learning or enjoying a positive experience at times when supply increases, or even the process of healing and creating new synapses through rebasing down when the selling pressure melts the market cap.
It’s interesting to write a little about the brain because that won’t be the main subject of this article, but it’s a subject with a good correlation. In the last article I explained how rebasing gives AMPL an aspect of neutrality. It is important to make it clear that neutral decentralized money is considerably better than bad money, such as FIAT currencies, having said that, I will also quote something else I said in the last article: AMPL uses the 2019 USD as only a reference for its unit of accounting. And nothing more.
In this way, the superficial belief that the AMPL has some sort of correlation with the 2019 USD becomes a misconception. It is possible that some users who are less knowledgeable about how AMPL works may acquire exposure to AMPL believing they are getting some exposure to 2019 USD. But it is important to remember that AMPL is a completely neutral, completely automatic money and it will relentlessly seek the 2019 USD price as a price balance, the point is that the rebasing element can provide greater irrelevance to the price factor depending on which one is its position in the equation.
It is necessary to keep in mind that when acquiring AMPL, the user is acquiring neutral money, I would like to say that as for neutral money there is no rule that says its value is fixed at the value of 2019 USD, but rebasing revolutionizes the economic definitions, transferring value from one definition to another, in a simple and direct way, to believe that by purchasing AMPL the user is having exposure to 2019 USD is a mistake. Simply put, this would only be the case if the market cap and supply of AMPL were the same as the market cap and supply of USD asset in 2019.
This could even be an idea for the AMPL team: The creation of a unit of accounting with 100% correlation to 2019 USD. As symbolic as the amount of 21M units is for Bitcoin missionaries, it is the 2019 number for Ampleforth missionaries and creating a stable coin that tracks the value of 2019 USD with minimal volatility in price and no volatility in supply would be welcome to the Ampleforth community. Such a solution should not be difficult to create.
Inflation
Truth is power. Faith is power.
Considering that AMPL is a neutral and decentralized unit of accounting, I present my reflections on how resilient AMPL is to inflation. Starting with the conclusions, in a direct way the AMPL is not an inflation resilient asset but in an indirect way it is.
The fact is that AMPL is a neutral unity of accounting, this means that if the market cap of AMPL is $99M and twenty years from now the market cap remains $99M, the rebasing process tracking the value of 2019 USD took place for twenty years. but the AMPL absorbed all the inflation accumulated in the period.
As a unity of accounting, AMPL has no deflationary force because the systematic minting reduction of AMPL supply is non-existent. This is because rebasing provides an accounting system by automating the elasticity of supply independent of creating new tokens in the way crypto users are often used to.
What makes AMPL an asset resilient to inflation are indirect aspects:
- Aversion to inflation and FIAT currencies
- Euphoria and Bull Cycles due to AMPL’s high correlation with Crypto markets.
- Opportunistic acquisitions due to extreme selling pressure, it is important to note that due to rebasing 1% of the purchased AMPL supply is 1% acquired forever.
Buying AMPL can give you the feeling that you are betting that in the future there will be demand for an asset with a high capacity to protect against inflation.
But if the defensive effects of AMPL against inflation are manifested indirectly, completely psychologically and not necessarily through the economic structure of AMPL, it is a higher consciousness-raising act to purchase AMPL bearing in mind that when you buy AMPL you are also betting that markets are driven by psychological factors, and markets definitely are.
From this perspective, acquiring AMPL becomes a sure bet. Counterintuitively, rebasing provides AMPL with a greater ability to act as a better automated psychological gauge on the market than an automated economic gauge.
I forgot to warn you at the beginning of the article, but things change fast. Change is life. With the accelerated technological and financial innovation, the creation of new tools and derivatives, the perspective is that the AMPL will soon enjoy the fruits of improvements in its utility, becoming in fact an automated economic gauge of the market. Real resistance to inflation would be just one of the many results provided by improving utility.
This makes me reflect on the value of an asset that is at the same time an automated economic and psychological gauge of the market. The value is immense and there is definitely the potential to become the standard unity of accounting.
