When people think of Stablecoins, they have something very specific in mind. A Stablecoin is meant to remove volatility. A Stablecoin is something you can use for payments. A Stablecoin is something you could use as a base trading pair on an exchange or as a refuge from positions in other digital assets. A Stablecoin is a stand-in for the dollar on the blockchain.

While Amples may be used for such tasks at some point in the far future, they are absolutely NOT stablecoins today. (And that’s OK!) Here’s why…

A Stablecoin removes volatility

Ampleforth does not try to remove volatility from the system. In fact, by design it allows volatility. Movements from the price target is the primary mechanism that engages the supply policy.

A Stablecoin can be used for payments

Until Amples have reached any kind of economic price-supply equilibrium, other stablecoins will be easier to use for payments and should be preferred for that use case. Dollars will be even easier still. Using Amples for payments will be about like using BTC or ZCash for payments, as we expect both price and supply to be volatile at launch.

A Stablecoin can be used as a base trading pair

Since Amples will likely be volatile, you’d be better served trading with a stablecoin (or the dollar) against Amples, instead of trying to use Amples as a base trading pair itself.

So Ample is not a stablecoin… Why was it created?

The Ample is an asset we’ve never seen before — it’s a Smart Commodity Money that incorporates price directly into supply. When supply needs to increase, it doesn’t go to any special group — it goes to everyone universally. Same for supply decreases.

Since commodities are naturally fair and independent, Amples were designed to uphold those same principles. Ample supply is governed strictly and automatically by rules, with no discretion on supply policy decisions. There are no added transaction fees, stability fees, or interest rates that need to be balanced with the market. There are no central collateral balance sheets that need to be maintained. There are no regular votes on monetary policy. Amples are never minted and sold, or bought and burned. Amples are fair, direct and independent, with no special class of stakeholders.

Amples will move differently

We expect that Amples will move differently from other digital assets, making them uniquely useful as a way of diversifying risk in a broader portfolio of assets or as a collateral asset in decentralized banks like MakerDAO.

Amples are macroeconomically friendly

Amples are a commodity money that doesn’t suffer the same deflationary drawbacks of fixed supply currencies.

Amples can scale economically
The Ampleforth protocol is an outside money that doesn’t rely on any collateralized debt. It can scale to a global ecosystem without having to lock up exogenous assets.

In short, Ampleforth is not trying to recreate fiat money on the blockchain. It is a new formulation of a smart, synthetic commodity money that we believe to be the next natural experiment after Bitcoin. In the beginning, it will likely be useful for diversifying risk within a portfolio or as an uncorrelated reserve asset. Much later, it could become an alternative to central bank money.