AMPL — Rebasing

This article contemplates some thoughts on rebasing.

Rebasing isn’t an innovation, but maybe it is, in my view the biggest forces having an effect on the short term price of AMPL are market forces. But what definitely drives the demand for the asset is the demand for the asset, the classic investment theory attribute this to value, in Crypto it is quite complex to define the value of a specific asset and I even say that the academic and famous classic definitions regarding investments sound a little schizophrenic.

The big question is that for the price to rise, causing the effect of positive rebasing, it is necessary for the buying pressure to overcome the selling pressure in the long run.

For this, it is important that the asset is useful and the greatest utility of AMPL is that in its algorithmic and automatic pursuit for the value of the 2019 USD, it provides some kind of correlation between the AMPL and the 2019 USD. However, it is incorrect to say that when buying AMPL the investor is fully exposing himself to the 2019 USD. In a simple way, I would define the AMPL as an asset with a higher correlation to the Cryptocurrency market that uses the 2019 USD only as a reference for its unit of accounting.

The Illusion of finance

Finance in turn can create various illusions of income or gains, what difference does it make if the gains produced by a stock go into the investor’s pocket through the payment of dividends or through the appreciation of the asset, if one prefers to collect investment gains from the collecting property rentals rather than taking advantage of gains provided by the appreciation of stocks, asset growth follows a basic arithmetic and what is important is whether the assets grow or not.

In moments of positive rebasing, AMPL provides its holders with the same illusion caused by collecting rents or receiving dividends. But rebasing is just a technical aspect dictated by code and that is proving highly functional in the three years of its existence.

Finally Rebasing

Well, rebasing is an innovation from a technical point of view because never before has an asset been made in which its supply was algorithmically changed in all addresses, in a practical way rebasing is still a neutral element from the perspective of asset appreciation or devaluation, that is, if the market cap goes up or down, the AMPL will only rebasing up or down, keeping the price stable. The point is that AMPL holders basically transfer the volatility from the asset price to the supply as the end result absorbing all the supply volatility in the amount of tokens in their possession.

Actually rebasing is just a feature that express the valuation or devaluation of AMPL market cap in a neutral way. So that rebasing is just a slightly distorted reflection of what happens with the market cap, a reflex that sometimes have a tremendous psychological impact on users.

The point is that as in a movie, the action of rebasing changes according to the scenes, acting as a neutral feature at the beginning of the movie but as a decisive character as the movie progresses.

In this way, I believe it is correct to say that Rebasing provides a neutrality effect to the unit of accounting. This is not a big innovation it’s just a simple way to create an alternative unit of accounting, it’s just how an accounting unit should be: completely neutral.

But the inability of FIAT currencies to retain value is what makes rebasing an innovation a little more impressive than it actually is. Adding to the fact that FIAT currencies are forced to use, the result is that a generalized problem is created: everyone is a FIAT currency user precisely because everyone is systematically forced to use FIAT currencies and thus the use of a currency that is incapable of retaining value becomes massively disseminated through society.

My conclusion is that AMPL is a neutral feature that proves to be a simple solution to solving the big problem of coins that are unreliable to preserve value. And it has great potential to achieve something daring: to become the Standard Unit of Accounting.