KVORUM
aaveSource: Aave governor v2 · #18

Adding AMPL on AAVE

executedJul 23, 2021, 12:11 AM UTCby320x32a9…fb2c

01Summary

AISummary by Kvorumclaude-haiku-4-5

Proposal to add Ampleforth (AMPL), a rebasing currency with elastic supply, to Aave V2 as a borrowing asset. AMPL will initially be available for borrowing only (not as collateral) with custom aToken implementation to handle daily rebasing mechanics. The asset has been audited by Peckshield, tested extensively, and has a $100K Immunefi bug bounty with no critical issues found.

Type
protocol addition

Key changes

  • Add AMPL as new borrowing asset to Aave V2 market with custom AToken implementation (aAMPL)(high)
  • Implement specialized token mechanics to handle AMPL's daily rebasing - borrowed amounts remain fixed while unborrowed deposits participate in rebases based on utilization ratio(high)
  • Custom StableDebtToken and VariableDebtToken implementations track totalScaledAMPL (fixed denomination) for proper accounting of borrowed AMPL through rebases(high)
  • AMPL designated as borrowing-only asset initially; collateral status evaluation to be performed afterward(medium)

Notable concerns

  • Market risk from first borrow/lending market for a rebasing currency
  • Novel rebase mechanism requires custom implementation and ongoing monitoring
  • Asset limited to borrowing only initially due to complexity of rebasing collateral mechanics
Contracts0x6fBC3BE5ee5273598d1491D41bB45F6d05a7541AaAMPL token and associated StableDebtToken and VariableDebtToken implementations
Generated by Kvorum
model: claude-haiku-4-5
provider: anthropic
profile: anthropic-fast-v1
prompt: v1.0
generated: 2mo ago
Read the description ↗

02Description

918 words

AIP rationale

Ample is the first rebasing currency of DeFi. It is an uncollateralized financial primitive with an elastic supply that adjusts each day according to demand in the marketplace. Like Bitcoin, Ample is non-dilutive but it has a long-term unit of account that unlocks safe denomination of debt.

References

Paragraph Summary

Ample is the first rebasing currency of DeFi. It is an uncollateralized financial primitive with an elastic supply that adjusts each day according to demand in the marketplace. Ample targets the 2019 USD. Like Bitcoin, Ample is non-dilutive but it has a long-term unit of account that unlocks safe denomination of debt. The goal of Ampleforth is to create a building block for a safer, more resilient financial ecosystem.

Being able to borrow and lend AMPL would enable holders to:

  • Utilize a new, low-correlated collateral asset which could reduce risk
  • Decrease exposure to rebases in exchange for income from interest
  • Use a non-collateralized asset that “borrows like a stablecoin"
  • Create leveraged AMPL trades and unlock derivatives
  • Create interest bearing AMPL that can be staked in other protocols
  • Increase exposure to AMPL & farming

Motivation

AMPL total supply and balances change once every 24 hours (at 2am UTC) based on market price. The supply change factor is the same for all holders. Because of that, lending and borrowing AMPL behaves differently from fixed supply tokens.

The desired behavior is for the borrow amount (loan) to stay the same after a rebase. The unborrowed tokens deposited in the Aave protocol still get exposed to rebase just like any other contract wallet. This means aAMPLs "partially rebase", in accordance with the utilization ratio.

The AMPL AToken functionally behaves similarly to every other AToken. It maintains a 1:1 peg with the underlying AMPL.

Specifications

  1. What is the link between the author of the AIP and the Asset?

Co-founder, developer

  1. Provide a brief high-level overview of the project and the collateral token See Summary

  2. Explain positioning of token in the AAVE ecosystem: which market?

The asset will be listed in the current AAVE V2 market.

  1. Provide a brief history of the project and how it overcame stressed conditions

Ampleforth launched in July, 2019. Since then, Ample has executed over 550 days of rebases. The network was subject to extreme growth and volatility following the launch of the Geyser liquidity mining program in July 2020. It has shown resilience with a lifetime median price of $1.00 and average price of $1.02 (vs target price of $1.02). There are currently over 22K holders and is a top 100 currency by Market Cap.

Onchain network history viewable on Dashboard.

  1. How is the asset currently used?

Ample aims to be a financial building block that supports a robust and stable financial ecosystem. Borrowing and lending is a critical layer of this stack. Current roadmap.

  1. Market data (Market Cap, 24h Volume, Volatility, Exchanges, Maturity)

Ample has developed deep liquidity on AMMs like Uniswap, SushiSwap, Mooniswap, and a Smart Pool on Balancer through its liquidity mining program.

https://www.coingecko.com/en/coins/ampleforth#markets

  1. Social channels data (Size of communities, activity on Github)

Links above

  1. Risk Assessment and Parameter suggestions

AMPL has been evaluated as low technical risk because it doesn't have any potential of infinite or uncontrolled minting.

Given the novel mechanism of rebasing, it will only be used as a borrowing currency for the time being. An evalution of whether to give it collateral status will be performed afterward.

A 3rd party Audit report from Peckshield can be found here.

After some recommendations from Aave devs, we made small updates to the implementation. This included no behavioral changes but included using a different math library and method of initializating configuration. We then ran a second round of audits with Peckshield that raised no new issues.

Internal testing was performed with a mainnet fork.

We launched an Immunefi Bug Bounty for the aToken with a competitive $100K reward for critical vulnerabilities. This has also raised no issues.

Technical Specifications

We implement a custom AToken, StableDebtToken and VariableDebtToken for AMPL. The StableDebtToken and VariableDebtToken implementations make no functional changes to the generic implementation. When the debt tokens are minted and burned, it performs some additional book-keeping to keep track of the totalScaledAMPL (fixed AMPL denomination, ie Gons) borrowed at any-time. The new getAMPLBorrowData method returns the totalScaledAMPL and totalScaledSupply which are used for AAmplToken math.

Generic AToken has a private balance and public balance. The public balance returned by balanceOf is multiplied by an interest rate factor. The aAMPL works the same way but the AAmplInternal balance is multiplied by another factor, which accounts for the underlying AMPL rebasing and the amount of AMPL unborrowed.

Code

AAMPL token address: 0x6fBC3BE5ee5273598d1491D41bB45F6d05a7541A Code verified here

Steps the proposal will execute:

  1. Start a vote to add aAMPL as a new asset.

Test Cases

  • Colab Notebook of test cases
  • Unit tests included with code change provide full coverage for all borrow, repay, and rebase flows.

Security Considerations

  • Standard technical risks of smart contracts apply to the AToken implementation.
  • Market risk resulting from first borrow/lending market for a rebasing currency.

03Mismatch analysis

AIMismatch analysis by Kvorumlow confidenceclaude-sonnet-5
Consistent

The decoded calldata consists of a single generic execute() call to an external payload contract, which is the standard Aave governance pattern: the actual asset-listing logic (initializing the aAMPL reserve, interest rate strategy, risk parameters, etc.) lives inside that target contract's bytecode and is not further decoded here. The description's stated action — 'start a vote to add aAMPL as a new asset' — is directionally consistent with this pattern, and there is nothing in the visible calldata (target address, lack of arguments, zero value) that contradicts the description. However, because the calldata does not expose the specific parameters (collateral factors, interest rate strategy, oracle, etc.) that the description discusses at length (e.g., 'used only as a borrowing currency, not collateral'), a reviewer cannot fully verify that the payload's internal configuration matches every claim in the prose. This is a common limitation for Aave AIP payload proposals and not evidence of a mismatch, but it does limit confidence in a strict line-by-line verification. No value, target, or role mismatches are apparent, and no omitted or extra actions are evident from what is decoded.'

Generated by Kvorum
model: claude-sonnet-5
provider: anthropic
profile: anthropic-strong-v1
prompt: v1.0
generated: 2mo ago
Review the decoded actions ↗

04Actions

1 total
#0fallback()chain 0x1
Target
0x7de3…572f
Value
0 wei
Function
fallback()
Arguments
{}
Calldata

05Tally

Summed from votes

Voters77
VP participating492.6K
Outcome (current)For
Current support81.3%

06Voters

77 total
Filter:
VoterChoice% of totalRationale
C10xc17c…64e1For123.3K25.04%—5y ago
C40xc4a9…2935For92.5K18.78%—5y ago
100x10f8…1f92Against90.7K18.41%—5y ago
A30xa3f0…b233For63.6K12.92%—5y ago
5B0x5bc9…d76cFor52.6K10.69%—5y ago
3C0x3cb9…d491For28.9K5.86%—5y ago
8D0x8dcf…e751For18.3K3.72%—5y ago
470x47c1…4770For7.8K1.58%—5y ago
700x704d…a0dfFor5.3K1.08%—5y ago
800x80dc…c146For3.3K0.66%—5y ago
510x510b…9938For1.6K0.31%—5y ago
F50xf569…271bAgainst1.1K0.23%—5y ago
F50xf528…90dfFor1K0.21%—5y ago
320x32a9…fb2cFor530.10.11%—5y ago
A50xa523…29f6For482.60.10%—5y ago
4A0x4ada…1c6bFor3400.07%—5y ago
910x9185…024fAgainst150.40.03%—5y ago
C80xc819…aea2Against140.60.03%—5y ago
130x13c9…cb03For109.50.02%—5y ago
220x22f3…a6e6For81.10.02%—5y ago
D50xd599…c7bfFor790.02%—5y ago
7F0x7f18…caedFor730.01%—5y ago
4F0x4f27…dda2For70.70.01%—5y ago
F10xf191…7914For49.60.01%—5y ago
E50xe585…330eFor48.80.01%—5y ago
AD0xad54…99d1For42.60.01%—5y ago
CA0xca31…367dFor29.90.01%—5y ago
410x4185…26ffAgainst28.40.01%—5y ago
E10xe162…2b5cFor24.80.01%—5y ago
6C0x6c27…f8aaFor22.20.00%—5y ago
7D0x7dd7…49ecFor16.90.00%—5y ago
270x2713…d6e5For15.30.00%—5y ago
860x86d0…3629For14.10.00%—5y ago
8A0x8aba…7940For11.70.00%—5y ago
D00xd0f5…cb91For10.90.00%—5y ago
A90xa970…ef01For10.90.00%—5y ago
DB0xdb71…d1a6For100.00%—5y ago
5F0x5f4f…e88dFor100.00%—5y ago
5B0x5b9b…b585For80.00%—5y ago
230x232c…439cFor6.80.00%—5y ago
FE0xfe66…95cfFor6.20.00%—5y ago
320x32ca…c384For5.90.00%—5y ago
DF0xdf93…d8b0Against5.20.00%—5y ago
250x2536…373dFor5.20.00%—5y ago
070x0716…e1deAgainst5.10.00%—5y ago
9D0x9d94…428eFor50.00%—5y ago
DD0xddfd…6a29For50.00%—5y ago
4C0x4c37…8011For4.50.00%—5y ago
780x7887…44e7For40.00%—5y ago
EA0xea05…faedFor40.00%—5y ago
Showing 50

07Forum

AIForum synthesis by Kvorumclaude-sonnet-5
sentiment · favorablethread · mixed

Arguments for

  • AMPL's rebasing, non-dilutive, algorithmically stable-target design provides a novel uncorrelated collateral and debt-denomination asset that differs meaningfully from stablecoins reliant on centralized/fiat backing.— AMPL_Kirby, BNM, kbambridge, marzipanstar, brandon
  • AMPL 'borrows like a stablecoin but holds like a non-collateralized asset', enabling unique trading strategies such as leveraged positions, rebase arbitrage, and interest-bearing AMPL.— brandon, yawobeng, MRSpock, cloudedlogic, kbambridge
  • Listing AMPL would deepen liquidity, drive new traffic and users to Aave, and strengthen a partnership with a large, active, and technically engaged Ampleforth community.— Jag, asimoes, ScottS, damien, chainone
  • The Ampleforth team has done substantial technical due diligence, including a custom aToken implementation, Chainlink price feeds, audits (Peckshield), and a bug bounty, showing readiness for safe integration.— brandon, Emilio, cloudedlogic
  • Third-party teams (Protofire, Atomica) offered to build liquidation-protection/backstop infrastructure specifically to mitigate AMPL collateral risk, potentially justifying a higher LTV.— margaret_protofire, Elena.Atomica, Elena.Atomica.org
  • AMPL's low correlation to other crypto assets (supported by Gauntlet analysis) makes it a useful diversifying collateral option that could reduce systemic liquidation risk.— kbambridge, brandon, GOATY
  • Reducing DeFi's reliance on centralized, fiat-backed stablecoins with a censorship-resistant, algorithmic alternative is a valuable step forward for the ecosystem.— BNM, kbambridge, marzipanstar, cloudedlogic

Arguments against

  • AMPL is highly centralized, with team/seed holders controlling a very large share of supply, creating risk of insider manipulation, especially combined with leverage on exchanges like FTX.— Coinninlingus
  • The aToken design where only unborrowed AMPL rebases (not borrowed balances) creates an arbitrage dynamic that systematically transfers value from lenders to borrowers, especially harmful during positive rebases.— pakim249
  • Supporting AMPL on Aave V1 is technically difficult since aTokens aren't upgradeable, requiring significant custom engineering and pushing the integration to V2.— Emilio
  • Borrowers face uncertain long-term repayment risk if AMPL's market cap and rebase-driven supply grow dramatically over time, complicating debt planning.— refri
  • Some thread contributions were low-substance hype rather than rigorous analysis, raising concern about the quality of governance discussion.— tonezone

Unresolved concerns

  • Once live, the AMPL pool suffered from severe liquidity problems, trapping unsophisticated lenders who couldn't withdraw despite high APY, raising ethical and reputational concerns for Aave.— Stoto, ethereumin
  • The rebase-driven arbitrage dynamic (only unborrowed AMPL rebases) could leave lenders as unwitting 'bagholders' absorbing negative rebases while missing positive ones.— pakim249
  • How exactly liquidation risk would be managed under volatile rebase conditions, and whether proposed backstop/insurance mechanisms (Protofire/Atomica) would actually be implemented, was left open.— margaret_protofire, Elena.Atomica
  • Concerns about AMPL's concentrated token ownership and potential for manipulation were disputed but never conclusively resolved.— Coinninlingus, damien
  • Confusion among community members about how borrowing, lending, and rebase mechanics interact in practice was only partially clarified through back-and-forth examples.— refri, kbambridge

Notable participants

  • brandonAmpleforth co-founder who authored the proposal and provided ongoing technical and governance updates through to on-chain submission.
  • EmilioAave-side contributor who flagged technical constraints (V1 vs V2) and tracked progress of the AIP.
  • kbambridgeFrequent, detailed advocate who explained AMPL's rebase mechanics and addressed community questions about loan behavior.
  • pakim249Raised a significant technical objection about arbitrage risk to lenders from the aToken rebase design.
  • margaret_protofireProposed a liquidation-protection service to mitigate AMPL collateral risk on behalf of Protofire.
  • CoinninlingusRaised centralization and manipulation concerns about AMPL token distribution, sparking pushback.
  • refriAsked clarifying questions about rebase/loan mechanics, helping surface community confusion.
  • cloudedlogicProduced explanatory content and repeatedly advocated for the proposal, also pushed back against criticism of thread quality.
  • tonezoneCriticized the thread for being hype-driven rather than substantive.
  • StotoReported real-world post-launch liquidity problems affecting lenders, raising reputational concerns.
Generated by Kvorum
model: claude-sonnet-5
provider: anthropic
profile: anthropic-strong-v1
prompt: v1.0
generated: 2mo ago
Open the thread ↗