AMPL
can be certain that AMPL
price reverts to its target over time, they experience unbounded stock volatility similar to that of floating-price tokens.1000 AMPL
from Bob to be paid back at a later date. Bob does not have to worry about the supply changes associated with the 1000 AMPL
Alice borrowed because he is no longer in possession of the 1000 AMPL
he lent. Bob is simply owed 1000 AMPL
at some time in the future. AMPL
has unique behavior on AAVE that is unlike other assets on the platform. Here we cover the AAVE specific considerations around lending and borrowing AMPL
. 2000 AMPL
into an empty pool on AAVE and 0% of the pool is utilized. In this case Alice is still exposed to supply volatility in addition to price volatility because all of the AMPL
in the pool effectively belongs to her. 2000 AMPL
into a pool on AAVE and Bob immediately borrows 2000 AMPL
. That is to say, this time the pool is 100% utilized. In this case Alice is not exposed to supply changes at all because the AMPL is in Bob's possession. She is simply owed 2000 AMPL
+ interest at some time in the future. 2000 AMPL
into a pool of AAVE and Charlie immediately borrows 1000 AMPL
. In this case the pool is 50% utilized and Alice is exposed to 50% of supply changes because half of the pool "belongs" to her and the other half is owed to her with interest at a later time in the future.