Elastic Finance makes its case in the DeFi discussion


The DeFi frenzy has been making the headlines in the last few months, as crypto exchanges rush to list popular tokens within the decentralized finance sphere. However, another concept called “Elastic Finance” has emerged, which could be the next generation of financial platforms that can use unique supply elastic assets, said an expert.

During an interview with Cointelegraph, digital asset protocol firm Ampleforth Foundation CEO Evan Kuo said that Elastic Finance began with its own token, AMPL, a rules-based elastic digital currency that automatically translates price volatility into supply volatility.

He said elastic finance represents the category of assets featuring AMPL’s rebasing function, and the ecosystem of platforms that support elastic tokens. Kuo pointed out which problems elastic finance and AMPL address to solve within the current DeFi environment:

“This operationalizes, in a way, the long-standing thesis by Nobel laureate James M. Buchanan that rule-bound “predictability”—–as opposed to human discretion—–might allow for more effective financial institutions. Further analysis had led us to hypothesize that these rule-bound supply changes might lower the correlation of the AMPL market capitalization with those of BTC and ETH.”

Kuo believes that nowadays, assets based on the concept of elastic finance could “reduce risk of auto liquidation in systems that utilize baskets of collateral assets,” and can be used for debt contract denomination.

Features that could be highlighted from elastic finance assets include being non-collateralized, having a non-fixed supply, a price target, and an automatic supply rebasing. Continue Reading

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When I came up with Ethereum, my first first thought was, 'Okay, this thing is too good to be true.' As it turned out, the core Ethereum idea was good - fundamentally, completely sound