Coil — Why it is a better Ampleforth
Ampleforth was the first to pioneer the idea of elastic supply. We believe the idea of elastic supply is revolutionary and one of the biggest developments in the crypto space since Bitcoin and Ethereum. Full credit goes to AMPL for bringing the idea of elastic supply to the mainstream, however we saw some potential major flaws, so we created Coil to addresses these issues and to make a better, more decentralized, and more fair elastic supply cryptocurrency.
First, we switched rebase to 23 hours to give everyone around the world a chance to trade or arbitrage around rebase in their peak hrs. AMPL is 24 hours which makes it so some people always rebase at 2 am. In our opinion, why should one part of the world always experience rebases in their peak trading hours. We felt this gave one part of the world an advantage especially to arbitragers and traders. Because of this we updated our rebase to 23 hours, which shifts the rebase time 1 hour earlier each day. What this does it allow the rebase time to rotate around the world so everyone can experience trading and arbitraging around rebase at some point during their peak hours.
Second, AMPL was distributed 10% to public in IEO, but just under 50% to team, advisors, large investors, and venture capitalist firms. Potentially AMPL even was forced to do this because the idea of elastic supply was so revolutionary, no one would accept it without this type of backing. Maybe they needed this to prove legitimacy of this radical idea. Now that the idea is in the open it allows for a more decentralized and fairly distributed elastic supply crypto to take center stage. Regardless of why AMPL did it, this is a critical flaw that is very hard to fix unless you do this from the start. Those large holders now control much of AMPL and can manipulate it and bleed smaller investors out. What Coil did was distribute 47% out initially to the public via 30% in Pre-Release and 17% in initial liquidity locked on Uniswap. We then took ETH from the raised pre-release and locked large liquidity on Uniswap as buy support essentially forming a floor for holders, while we took the time to build our revolutionary Spring(more on this soon).
Locking such a large amount of liquidity prevented us from getting a large initial price pump, but it also allowed us to set a relatively solid price floor. We chose to protect the long term stability by forgoing the large initial price pump, to create a solid base floor of our holders why we built. To many in crypto this made no sense, because everyone just wants the initial price pump, but for us we are building something much bigger and longer term, and we had to make sure the base is solid. This shook out many weak hands that were just in for an initial quick buck, and moved Coil into the hands of true solid network supporters, giving us a solid stable base to grow off of.
Where as AMPL was released as a pyramid upside down with few holding most of the coins making it easy for them to control and manipulate and teeter that pyramid, Coil flipped that around, to put the base on the bottom that is much larger and more stable. Coil also has 20% of total supply allocated to the Ecosystem liquidity. Think of this like a faucet that slowly releases this supply to supports of the ecosystem that provide liquidity. This is a great way to distribute more and more of the network into the supports and good actors hands. Coil is built from the ground up to be more stable and decentralized Ampleforth.
They geyser is another fantastic idea in which AMPL had, but there flaws in this system as well. The geyser incentivizes users to provide liquidity into a pool (equivalent in ETH and AMPL). You are then rewarded from the ecofund by getting a multiplier the longer your provide liquidity. 15 days would be 1.5x, 30 days = 2x, 60 days = 3x as max reward. This is a great reward incentive to get users to add liquidity, but that liquidity is not locked. Remember above, we talked about AMPL’s distribution, well those same “whales” can pull liquidity and manipulate and scare the market causing large volatility. If large amounts of liquidity are added or removed it can have drastic effects on the market, and due to AMPL’s distribution, this is exacerbated as a few of these large holders can control the market and scare and bleed out the little holders until they have very little left.
This is why we designed the Coil Spring like we did. Our Spring fixes this by adding a HEX like CD(certificate of deposit) system on top of AMPL’s geyser. This does a few things. It makes liquidity more predictable where people can adjust and chart it while also making it much harder to manipulate. Just like in the real world, if you opt into a Certificate of Deposit, the longer you lock your funds up the larger the rewards. And just like in the real world if you want to pull those funds out early before the time is expired, you will pay a penalty. What this does, is not only incentivize and pay users to provide liquidity is incentivizes them to keep it there, and do what they say. Users can elect to provide liquidity for 1 day, 5 days, 30 days, or even 90 days. They can choose any amount they want or even break it into multiple periods if they want. The longer they do the more they are rewarded. If however a users chooses 90 days, and pulls out that liquidity after 10 days, they will not only receive no rewards they will also pay a large penalty from their principle. The Spring is designed to reward good network actors while penalizing the bad. This will help fix manipulation and volatility in Ampleforth, while also allowing more data and this liquidity to become more predictable giving users more information to adjust. Coil combines what you see in the real world into crypto, while adopting ideas of HEX and AMPL, which are two of the most successful projects on Uniswap and both hit over 1 billion dollars in marketcap.
Very briefly we can address a few other elastic supply cryptos, but they are all very flawed in our opinion. Rmpl -the team was choosing the random rebase time and rebasing and deciding how much supply to add, so it really wasn’t even truly random to start. The idea of random also while sounding good is flawed for a few reasons. It alienates users -some traders and arbitragers who trade these assets specifically. It is harder for exchanges to deal with. It will never be used in DeFi as collateral, because PREDICTABILITY not random is what is needed if you are a DeFi backbone and collateral asset. On top of this they say this stops whales from manipulation, it does none of the sort, as any bot can be set up to trade balance changes. There really is no good reason for random other than marketing gimmick, as it still does not solve the root issues and just creates newer issues.
Soft Link uses the price of Chainlink as a target and Truampl use their own price as a target which also makes no sense. We already saw Soft Link have to change their target from .1 Link to 1 Link. Anything pegging to itself or other crypto defeats the whole purpose because AMPL and Coil are less correlated to BTC and crypto and have a stable peg OUTSIDE of crypto. So no project pegging its target to itself or any other crypto can ever be used long term as a collateral asset, and is likely just a marketing money grab. You need an outside stable target if you want to be a hedge asset and de-correlate from Bitcoin and other cryptocurrency. This is why Coil is a perfect hedge asset and perfect for DeFi collateral. Targeting to yourself or other cryptos doesn’t make much sense so any coin that does that will have little to no use in the long term.
Xmpl is a cool economic experiment. However it has a total different goal from Coil. Xmpl is deflationary and can never work or be used widely on larger scale. To be used by the masses and as a collateral asset and DeFi backbone, your supply must expand and contract, just like our monetary supply does in the real world. A deflationary environment leads to little growth and will never work on scale.
Rebased seems to have been covering up some things and forking now. How it was able to be arbitraged due to the sync issue does not add up. After rebase you have to sync back to Uniswap. Until this is done by someone no trading happens, so it is not clear how this was arbitraged at least from the info they provided. On top of that Rebased did not fund itself properly, and the only other switch otherwise was to 12hr rebase I believe. Its likely doomed due to funding. In the early days, you need massive funding to incentive liquidity until you grow enough. This is why Coil locked in $510k in ETH, 17% or the supply in initial Coil liquidity, and also have another 20% of the supply as liquidity incentives to grow the market.
In the early days you need to fund liquidity heavily. Liquidity is very important and the engine to drive this as it grows. So we put 37% of coil to liquidity and liquidity incentives and also over half a million in ETH. How we set this up made it much harder for our price to go up from the start, but we were not worried about that. We built Coil for the long term, and doing it the way we did, allowed us to put a solid floor in place while we built the Spring. This allowed us to build a stable base and have larger liquidity to grow off of leading to more stable long term growth. Many of these others were just set up for a quick pump and dump.We shock our supply less the way we did it, creating less volatility. We wanted to make a solid base to build off of, and we do not blindly pay shillers like these others for quick buck. So when you really dig down, you see none of these others are really tackling any of AMPL’s real issues which is making the liquidity more predictable and chartable, which in turn leads to loss volatility and manipulation. They are likely only in this for a quick pump and money grab rather than building something for the longevity of crypto like Coil is.
Coil attacks AMPL’s root problems. We are the only project fixing the root issues of AMPL and we are built for longevity. I am pretty sure we are the only project exploring and trying to make Private DeFi a reality as well. Many of us are deeply tied in the privacy space to multiple projects. We believe DeFi will evolve more and more over time and privacy will be more and more important. Coil sees what is coming and is building to prepare for it. We envision bridging Coil into multiple privacy ecosystems where it will be a base pair, collateral asset, and hedge. Coil will not only disrupt and become a DeFi backbone and collateral asset, but also be a pioneer and key driver of the masses into Private Defi in the future.