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aalavandhan
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Dec 9, 2020
AIPs/aip-5.md
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| ### Conclusions | ||
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| This change is expected to make AMPL more robust as a base money in decentralized finance applications. AMPL will keep its dynamic properties to change supply to match demand. In addition AMPL will be enhanced by protections against short-lived but extreme market conditions. The protocol is also expected to remain closer to its target, now that larger supply adjustments will happen closer to the target price. |
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| This change is expected to make AMPL more robust as a base money in decentralized finance applications. AMPL will keep its dynamic properties to change supply to match demand. In addition AMPL will be enhanced by protections against short-lived but extreme market conditions. The protocol is also expected to remain closer to its target, now that larger supply adjustments will happen closer to the target price. | |
| This change is expected to make AMPL more robust as a base money in decentralized finance applications. The Ampleforth protocol's fundamental nature has NOT been altered, it will keep its dynamic properties to change supply to match demand. In addition, AMPL will be enhanced by protections against short-lived but extreme market conditions. The protocol is also expected to remain closer to its target, now that larger supply adjustments will happen closer to the target price. |
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Edited based on your feedback here and Brandon's feedback.
statuskuo
reviewed
Dec 10, 2020
| <!--This is the problem statement. This is the *why* of the AIP. It should clearly explain *why* the current state of the protocol is inadequate. It is critical that you explain *why* the change is needed, if the AIP proposes changing how something is calculated, you must address *why* the current calculation is innaccurate or wrong. This is not the place to describe how the AIP will address the issue!--> | ||
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| The original Ampleforth linear rebasing function was intended to make minimal assumptions about how price reacts to expansion and contraction (i.e. expansion would slow price increases by translating them into supply increases and contraction would slow price decreases by translating them into supply decreases). Said differently, the main purpose of the function is to point supply changes in the right direction without trying to predict the exact magnitude of supply change needed for the fastest reversion to the price target. | ||
| The original Ampleforth linear rebase function was intended to make minimal assumptions about how price reacts to expansion and contraction--i.e. expansion would slow price increases by translating them into supply increases and contraction would slow price decreases by translating them into supply decreases. Hence the main purpose of the function is to point supply change in the right direction without trying to predict the magnitude of supply change needed for the fastest convergence to the price target. |
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- Suggest using an mdash — rather than two small dashes
- Suggest the following language: "Hence the main purpose of the function is to point supply changes in the right direction without trying to predict the magnitude of change needed for the fastest convergence to the price target"
ahnaguib
commented
Dec 10, 2020
| * Limit protocol sensitivity to short-lived, but extreme market conditions that can disproportionately change supply. | ||
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| ### Motivation for Symmetry | ||
| Additional side benefits from having a cap on daily supply changes: |
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| Additional side benefits from having a cap on daily supply changes: | |
| Additional side benefits from having a bound on daily supply changes: |
statuskuo
reviewed
Dec 10, 2020
| * Limit protocol sensitivity to short-lived, but extreme market conditions that can disproportionately change supply. | ||
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| ### Motivation for Symmetry | ||
| Additional side benefits from having a cap on daily supply changes: |
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Suggest "Additional side benefits:" instead of "Additional side benefits from having a cap on daily supply changes:"
ahnaguib
commented
Dec 10, 2020
| Additional side benefits from having a cap on daily supply changes: | ||
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| A supply policy is asymmetric if the magnitude of contraction is not equal to the magnitude of expansion, given identical but opposite changes in relative demand. In the case of Ampleforth, the protocol currently experiences much slower contraction than expansion. Consider the example of an alternating series below: | ||
| * Having a bound that makes AMPL supply changes relatively more predictable beyond the current day. |
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Suggested change
| * Having a bound that makes AMPL supply changes relatively more predictable beyond the current day. | |
| * AMPL supply changes becomes relatively more predictable beyond the current day. |
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