Static Supply

The simplest trade on AMPL is when the system is not adjusting supply (i.e., during neutral rebases). This is where traditional trading methodologies are most effective, with price being the only dimension.

To clarify, the neutral zone denotes the area between the expansion threshold and contraction threshold (+/- 5% of the price target). When the price deviates anywhere outside this zone, the protocol issues a rebase.

An example of AMPL’s price versus the neutral zone is shown below:

The majority of AMPL's price history occurs outside the neutral zone.

There are only two possibilities for traders holding AMPL during neutral rebases:

1. Price is appreciating, but supply is stagnant (demand rising)

2. Price is depreciating, but supply is stagnant (demand falling)

These scenarios describe AMPL during a Neutral Rebase cycle when the price is within the neutral zone, meaning supply is unchanged.

Neutral rebases offer traders their simplest entry into AMPL, as they eliminate the added volatility surrounding the rebase event. The rebase occurs once daily at the exact same time (2 a.m. UTC).

This means that the rebase is a known variable, creating greater volatility leading up to the rebase event as network ownership is traded on the open market as AMPL (+/- the expected value change post-rebase).

Although more predictable, AMPL historically does not experience neutral rebases for extended periods of time.

An examination of AMPL’s complete rebase history shows that neutral rebases are generally temporary as demand’s increased direct impacts swing the price one way or the other (See Figure 1).