Ethereum-based Ampleforth token- AMPL quietly rallied by 1000% in the past three days as we can see in today’s altcoin news.
Instead of having an stablecoin that is based on US dollars, the supply of the crypto asset responds to the demand and increases as well as decreases over fixed periods of time to try and ensure the price of the coin stabilizes around the USD. However, AMPL quietly rallied by 1000% from a market cap of around $1 to $2 million to about $750 million which is it’s all-time high recorded, representing a huge growth for those that purchased the token last year.
Other types of rebase tokens are trying to build on Ampleforth’s concept and this has worked for some with many rebase tokens experiencing ridiculous rallies over the past few days and weeks. One such rebase token that joined a new category named seigniorage tokens increased by 1,000 percent as well in the past three days. while AMPL worked as an investment, it’s nothing like a stablecoin that can be used in DeFi.
Because of its rebasing mechanism where the supply can be taken away, it’s quite hard for DeFi protocols to implement the coin without breaking the current system. Also, as AMPL represents a static share of the Ampleforth network, the token is quite volatile. The Empty Set Dollar token tried to solve this issue when it launched back in September. ESD is quite unique since it has an algorithmic and uncollateralized stablecoin which allows two types of users, those that want a dollar-pegged stablecoin, and others that want to bet on the growth of the network. it is also an eRC20 token which makes it easy to be integrated into the DeFi protocol.
Anyone that wants to use it as a stablecoin to protect their portfolio can just purchase ESD. Those that want to bet can participate in Bonding or coupons which will further incentivize the stabilization of the ESD price. Since it gained a market capitalization of $1 million on day one, it rallied by 10,000 percent and now has a market cap of $130 million.
Of course, other tokens followed. Take Dynamic Set dollar for example. It tried to improve ESD’s governance model by forking and launched at the end of November. Since the launch, it surged from $1,000,000 market cap to around $40 million according to CoinGecko. Over the past three days, its market cap gained 1000%. In the past three days alone, the market cap gained 1000% and it is in its bootstrapping phase as ESD trades for $1.78 which is above its dollar peg that it should trade around once the price action stabilizes as the market develops around the coupons.
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