The Stabilize Protocol is a decentralized finance application designed to help keep stablecoins, ETH and BTC proxy tokens’ prices stable by using active strategies that arbitrage across multiple exchanges. Users earn from price fluctuations between tokens. The protocol can be utilized on both Ethereum and Binance smart chain networks.
Only available for Stabilize ETH, the Stabilize development team will soon release a novel, unique to Ampleforth, strategy that will help stabilize the price of AMPL to its peg while partially protecting depositors from negative rebases during contraction phases.
What is Ampleforth?
Ampleforth is an algorithmic stablecoin that makes changes in its supply based on changes in demand to push its token price to a target price. These supply changes occur once daily and are called rebases. If the price is above the target price, the supply will expand to cater to the increased demand. If the price is below the target price, the supply will contract as it is greater than the demand for the token.
What makes Ampleforth different than many other algorithmic stablecoins is that the supply changes affect each AMPL holder automatically. An increase in 1% of the total supply will cause an individual’s wallet to increase 1% in balance and the same vice-versa. A decrease of 5% in the supply will decrease each wallet by 5% in balance.
The Stabilize Strategy
This unique strategy will take advantage of the rebase mechanism in expansion to build up the collateral asset, USDC, so that when AMPL is in contraction, it will use the collateral asset to build up supply of AMPL. This will have two effects, offsetting the amount of AMPL lost by contraction and boosting the price of AMPL so that it gets closer to its peg.
Because of AMPL’s unique tokenomics, there is a potential for partial loss on deposit amount, which is unlike our other strategies. This means, you may deposit 10 AMPL into the strategy and withdraw with 8 if you withdraw during a long contraction period. Nevertheless, we expect over a long period of time, this strategy will outperform holding AMPL in your wallet or even in the geysers.
Due to the protective nature of this strategy, there will be a withdraw fee with a minimum percent of 0.5%. If AMPL strays away from its peg, that withdraw fee increases to the rebase percent.
Like all single deposit strategies, users can only deposit one asset but when a user withdraws, the token deposited will be the one withdrawn first followed by the collateral asset.
Join our community to learn more
Visit the website to get started using the Stabilize protocol, follow us on Twitter and join the community on Telegram to find out when this new strategy will be released!