Unit of Account

How Does AMPL Hold a Stable Unit of Account?

Despite AMPL's free-floating price, the asset maintains a highly reliable unit of account over the long term. This is possible purely because AMPL can track CPI and algorithmically adjust its supply.

When AMPL was first released in 2019, its original price target was $1. However, because of inflation, AMPL's modern price target is above $1.17.

Thus, AMPL's long-term price action will fluctuate around a rising CPI, all without a price peg or other artificial stability mechanism.

AMPL's historical price history is shown below:

AMPL's Daily Price (Blue) vs. Price Target (Red)

AMPL's long-term price stability becomes visible when compared against the historical price target. While the AMPL token determines its short-term price through the free market, it always returns to its Price Target over time.

This is what makes the Ampleforth Protocol inflation-resistant.

Over time, the price target is a trend line for price fluctuations, providing predictability to AMPL's tokenomics.