Users stake low volatility assets (SPOT:USDC) and receive AMPL. Notably, demand for SPOT increases the value of AMPL, which in turn increases APY for stakers.
1. STAKE low volatility assets: (SPOT:USDC)
2. RECEIVE collateral asset: (AMPL)
AMPL is the underlying collateral asset used to mint SPOT. For this reason, holders of AMPL have upside in the growth of SPOT. To understand the relationship between AMPL and SPOT, please see the Spot Documentation.
FAQ
1. What do I need in order to participate?
The staking assets are SPOT and USDC, so in order to participate, first you'll need to acquire SPOT. We recommend purchasing through Cowswap: https://swap.cow.fi/#/1/swap/USDC/SPOT.
Once you have SPOT and USDC you can stake in any of the active programs above.
2. How long will each phase last?
Each phase lasts 6-months and multiple programs can be concurrently available. New phases unlock based on liquidity and marketcap milestones. When new users contribute to a staking program two things happen:
New Demand for SPOT is realized — Because SPOT is backed by tranched AMPL, new demand for SPOT causes AMPL to expand, increasing the value of the program's AMPL rewards (potentially increasing APY).
AMPL rewards are diluted — The pile of rewards dedicated to a given program distributes to a greater number of stakers (potentially decreasing APY).
Broadly, new phases unlock when 1) APY's fall to a market competitive equilibrium rate and 2) a sufficient amout of expansion to AMPL's marketcap has occurred to support more SPOT minting. When a new phase unlocks, APY's will be elevated again until enough new demand enters to unlock the next phase, repeating the cycle. This ensures that SPOT grows at a healthy rate and APY's remain competitive.
3. Can I move between programs?
Yes, you can move between programs by unstaking from one and depositing into another.
4. How often are the rewards distributed?
Rewards are continuously accruing to your balance based on how long you've been staked. However you will only be able to access the rewards when you unstake.
5. Can you claim the rewards without unstaking?
No you have to unstake in order to claim rewards.
6. How should I think about impermanent loss?
SPOT is a mean-reverting asset that experiences little to no impermanent loss when paired with stables in a constant product AMM pool
The staking vaults are managed UNI v3 pools that utilize knowledge of SPOT’s redeemable value to automatically set concentrated bands around SPOT’s fair-market-value.
7. How does this trigger a flywheel?
There are a number of interesting dynamics that emerge from participation in the boostrap program:
Demand for SPOT → Demand for AMPL — SPOT is backed by senior ampl tranches, for this reason demand SPOT propagates into demand for AMPL. To learn about tranching see the SPOT primer.
AMPL gains → Higher APY's — Demand for AMPL creates higher APY's for SPOT stakers, attracting more demand in a cycle.
SPOT gains utility → Demand for SPOT — SPOT becomes a more liquid store of value and a new generation of users learn that SPOT has high terminal yields. See the Evergreen Cycle.
