Ampleforth Governance Token

About Ampleforth Governance Token

Ampleforth is a unique cryptocurrency protocol that uses supply adjustments to seek to maintain a stable purchasing power. The native token of the Ampleforth platform is AMPL, an elastic supply token. In 2021, the project launched a governance token called FORTH to allow the community to have a voice in governing the protocol. FORTH enables holders to propose and vote on upgrades, parameters changes, and more.

Historical Background of Ampleforth Protocol

The origins of Ampleforth date back to 2018 when the protocol was launched by the Ampleforth Foundation. I was initially intrigued by the concept of a cryptocurrency with an elastic supply that expands and contracts based on demand. This mechanism sets Ampleforth apart from other stablecoins that rely on collateralization.

The goal of Ampleforth is to decouple the unit of account function from the medium of exchange function of money. By adjusting supply in response to changes in demand, AMPL aims to maintain a stable purchasing power over time. This is an interesting experiment in monetary policy for the cryptocurrency space.

How FORTH Works

FORTH is the governance token of the Ampleforth protocol. It allows holders to submit proposals and vote on protocol changes. The more FORTH a user holds, the greater their voting power. Some of the parameters that can be modified include:

• Supply change mechanics
• Oracle selection
• Inflation schedules
• Reward distributions

After a proposal is submitted, all FORTH holders can vote yes or no during a 3 day voting period. If a majority vote yes, the proposal will be implemented. This governance mechanism empowers the community and enables a decentralized evolution of the protocol.

Acquiring and Staking FORTH

There are a few ways to acquire FORTH tokens. The primary method is to stake AMPL tokens and receive FORTH as a reward. AMPLEforth uses a tiered staking structure, with higher tiers earning more FORTH. Users can also buy FORTH on exchanges like Uniswap and FTX.

Staking FORTH unlocks additional benefits. Stakers earn staking rewards in the form of more FORTH. They also gain voting power proportional to their stake, allowing them to have greater influence over the protocol’s governance. Overall, staking FORTH incentivizes long-term participation and alignment with the project’s success.

FORTH Tokenomics

The starting supply of FORTH at genesis was 10 million tokens. Additional FORTH enters circulation through two main methods: staking rewards and community treasury allocations.

30% of all FORTH emissions from staking go to stakers as rewards. The other 70% goes to the community treasury, which funds ongoing development, growth initiatives, and other costs. This split aims to balance lucrative staking yields with adequate protocol funding.

In terms of token distribution, around 25% of FORTH was allocated to seed sale participants. 12% went to the team and advisors. The remaining 63% goes to the community treasury and staking rewards. This distribution prioritizes community ownership and decentralization.

Uses for FORTH

In addition to governance, FORTH has a few other key uses:

• Staking – As mentioned, staking FORTH earns yield on holdings while granting voting power. This incentivizes holding FORTH long-term.
• Bonding – FORTH can be bonded to help bootstrap new collateral types, creating additional use cases for the protocol.
• Dispute Resolution – FORTH will be used to select arbitrators if a dispute arises around a proposal vote. Holders vote to elect trusted arbitrators.
• Protocol Insurance – In the future, FORTH may be leveraged to parameterize protocol insurance funds to protect against black swan events.

Overall, FORTH unlocks utility and influence over the Ampleforth ecosystem for holders.

Impact of FORTH in Decentralized Finance (DeFi)

Decentralized finance (DeFi) has exploded in popularity and growth over the last few years. As the space matures, governance tokens like FORTH are playing an increasingly important role. FORTH allows holders to actively shape the future of DeFi by voting on proposals that upgrade protocols and redistribute treasury funds.

One of the most significant contributions of FORTH is enabling seamless transitions between protocol versions. Traditionally, upgrading DeFi protocols requires a disruptive hard fork that splits the community. FORTH mitigates messy forks by aligning stakeholders and coordinating smooth upgrades endorsed by token holders. This improves continuity and cohesion in the fast-moving DeFi landscape.

In addition, FORTH bolsters sustainability and funding for public goods. Protocol treasuries directed by engaged FORTH voters can subsidize gas fees, fund audits, or grant to promising projects. This treasury management can steer resources to overcome technical limitations holding DeFi back.

Finally, FORTH boosts inclusivity by giving everyday users voting power. DeFi whales and VCs no longer unilaterally dictate developments. Distributed governance puts the community at the heart of decision making.

Overall, FORTH meaningfully impacts DeFi by enabling seamless evolution, funding public goods, and promoting inclusive governance. As adoption grows, FORTH has the potential to radically shape the trajectory of the decentralized financial system.

The Future of FORTH and Ampleforth

FORTH has significant potential as the Ampleforth protocol continues evolving. The team has hinted at integrating advanced Monetary Policy 2.0 mechanics like dynamic oracle selection. FORTH holders will be able to steer these enhancements.

There is also talk of using FORTH for decentralized funding allocation from the community treasury. If implemented, FORTH holders may be able to direct how treasury funds are spent to grow the ecosystem. This would further decentralize the project.

The concept of an elastic supply cryptocurrency guided by community governance is innovative. If executed successfully, Ampleforth could offer meaningful advantages of both stability and decentralization to users worldwide. The growth of FORTH will be key to empowering the community to guide this vision. Its future looks bright as Ampleforth’s governance token.