Strategies explained

more explanations will be added soon :)

Stabilize (ETH)

zs-AMPL

Our latest, and maybe the most sophisticated strategy, is the Ampleforth strategy which is available on Ethereum. The main advantage the strat offers compared to holding ampl is that users can participate in the expansion and are protected from the contraction (both partly), by swing trading ampl via a sophisticated rebase token trading algorithm.

Medium post: https://stabilize.medium.com/ampleforth-is-coming-soon-to-stabilize-eth-576e94edd9e3

The strategy takes advantage of the natural swings and the market psychology of rebase token prices, to swing trade between AMPL and USDC, and to stabilize AMPL towards it`s target price. It sells AMPL above it`s target price for USDC, and buys the AMPL back when it`s price is below the target price. But the code does it in a very sophisticated way to hold as much AMPL as possible during the expansion circles, by trading according to the general price trend:

The contract sells above peg nothing or only a small % from the AMPL supply change when the price is rising (in comparison to the last rebase), and rapidly increases the % sold relative to the AMPL supply change when the price is stagnating or declining. This should give overall greater returns and outperform holding AMPL , since we sell less at the beginning of a hype cycle when the price is still rising and the pooled AMPL funds benefit from the expansion. This trading approach not only respects the rebase narrative the users are used to and want to participate in, but is also the most profitable way to swing trade AMPL in a fully automatic way.

Below peg, the contract doesn`t buy back as long the price is declining, so that the collected USDC is spared for later. It starts buying when the price trend is positive, and increases the buyback batches relative to the contraction percentage when the price trend shows strength, to focus on serious price trends. The strategy basically waits until the market turns, and supports the market in pushing up the price as a side effect; and it buys most when the price is low, and the price trend is strong upwards. This also protects a part of the user funds from contractions, since we buy back into AMPL with USDC mostly at a later stage, and not so much (or nothing) when AMPL goes into contraction.

This strat is the only one where Stabilize takes a withdrawal fee, which is equal to the last rebase percentage (but min 0.5%). We decided to do this to prevent gaming the strat. 80% of these fees stay in the strat as ampl, 20% get converted to weth and is sent out to stakers and treasury.