In this article [1] I want to discuss the dynamics of Ampleforth [2,3], which is a crypto currency with its twist. Instead of issuing a fixed number of units, Ampleforth monetary supply expands and contracts dynamically to keep one Ampleforth valued at around 1 USD. The expansion and contraction is executed in a pro-rata manner, meaning that they do not impact the percentage of overall supply an investor holds. On first sight this looks like a stable coin, but on second sight it is clear that this is not quite the case -- it is a regular crypto coin whose price dynamics has been moved to play out in the volume space. What I mean with this is that when Ampleforth market cap goes up / down 10% then investors will feel the impact of that -- not by a change in price, but by the fact that they suddenly hold more / less currency units.
