maybe people need a reminder: Brian Armstrong called « flatcoins the next iteration of stablecoins » he said they’re a better form of money for crypto and that’s why Coinbase 🛡️ backed $SPOT with $1M last year ! but most people still don’t know what $SPOT is… or why... it matters so much this thread explains it simply.show more

normal stablecoins (like USDC or USDT) are copies of the US dollar they hold real dollars in a bank to back each token but if the dollar loses value over time those stablecoins lose value too. $SPOT is different it’s not backed by dollars it’s backed by a crypto called $AMPL form @AmpleforthOrg

$SPOT doesn’t copy fiat it follows the cost of living …things like food, rent, energy that’s why it’s called a flatcoin flatcoins were first talked about in 2021 by @balajis (ex-coinbase) and sam Kazemian (frax founder) they imagined a token that stays stable not by copying fiat but by tracking prices people actually care about…rent, food, energy, etc. build a stable asset that stays flat in real terms even if fiat money keeps losing value

$SPOT is that idea made real built on top of $AMPL $AMPL is a special token its supply changes every day to stay close to the value of a 2019 dollar (CPI-adjusted) but $AMPL can be a bit wild it rebases up and down depending on demand so how do you make it stable?

that’s where $SPOT comes in $SPOT is made by splitting $AMPL into two parts: - Sr (senior) = stable and safe - Jr (junior) = risky and volatile $SPOT is backed only by the safe part (Sr) for every 1 $SPOT you create you need 3 $AMPL in total - 1 $AMPL goes into the Sr (the stable backing) - 2 $AMPL go into Jr (they absorb the risk) this is how $SPOT stays low-volatility without needing a peg this system works all onchain it’s transparent, automatic, and doesn’t rely on banks

you can hold $SPOT and know it won’t be affected by inflation like fiat-backed coins as more people mint $SPOT more $AMPL is needed to create the Sr and Jr parts this creates a loop: more demand for $SPOT = more demand for $AMPL and that gives $AMPL real utility but here’s a question: what happens when the Sr tranches get old? that’s where the rotation vault helps

every week, it refreshes the backing of $SPOT by removing old tranches and adding new ones here’s how it works: 1) the vault removes old Sr tranches 2) it splits new $AMPL into fresh Sr and Jr 3) the new Sr replaces the old ones in $SPOT 4) the new Jr is saved and matures over time this keeps $SPOT fresh and stable, always you don’t need to manage anything it’s automatic it happens every week it’s onchain and transparent this is what makes $SPOT different from other “stablecoins” it’s money that doesn’t decay

you don’t need to do anything it happens automatically every 7 days onchain even in the worst-case scenario if no one rotates $SPOT just becomes as volatile as $AMPL it doesn’t break now let’s talk about fees to keep the system balanced the protocol uses dynamic rotation fees sometimes you pay to rotate sometimes you get paid sometimes it’s free how does it work? – if more people want volatility (stAMPL), they pay fees that fee is earned by $SPOT holders – if more people want stability (SPOT), they get paid the protocol rewards stakers who rotate – if demand is balanced → no fee at all

this is similar to funding rates in trading it makes sure there’s always a healthy balance between safe money and leveraged money capital flows from one side to the other — without liquidations in bullish markets, people want leverage → they pay to access $stAMPL in bearish times, people want safety → they get paid to support $SPOT the system adjusts to market demand quietly, efficiently

and that’s what makes $SPOT so powerful it’s not just stable it’s smart it adapts coinbase saw this early they knew the world needs better money and they backed $SPOT with $1M

now it’s up to the rest of us to understand it this is not financial advice just something you should look into because in a world where money keeps losing value $SPOT is a serious attempt to fix that and it’s still early

in a cycle full of noise $SPOT is one of the quietest but clearest signals go to read the docs look at the mechanism and think long-term because when the dust settles people won’t be chasing yield—they’ll be chasing money that lasts and this might be it👀

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