ALP

ALP (Amped liquidity pool) serves as liquidity provider token for the Amped ecosystem.

Overview:

ALP constitutes an index of assets employed in swaps and leveraged trading on Amped. It’s minted by using any index asset and can be redeemed by burning for any index asset. The minting and redemption prices are determined by the formula (total value of assets in the index, including profits and losses of open positions) / (ALP supply). Acquiring ALP:

ALP tokens are available for purchase through the Buy page. Any of the ALP index tokens listed on the Amped Dashboard can be utilized to acquire ALP.

Go on Buy page, then select buy under ALP

On the new page select the token you want to use (1) to provide liquidity and buy ALP then add the desired quantity (2)

Then click on buy (3) follow instruction on your wallet for approve your token expense and buying your ALP share

and it’s all !

Upon purchase, your ALP tokens will automatically be staked, initiating the accrual of Escrowed AMP and ETH rewards. You can monitor your rewards on the Earn page.

Selling ALP:

To sell ALP tokens, navigate to the ALP page and select sell.

Holding ALP :

Newly minted ALP are automatically staked and provide earnings to user:

Participate in 70% of all generated protocol fees.

Earn escrowed AMP (esAMP) tokens. These can be staked for rewards or vested to gain other AMP over a 12-month vesting period.

A user can close the position and withdraw supplied collateral at any moment, which triggers a ALP burn mechanism. That is the case with a non-inflationary tokenomics model since incentives do not directly yield newly minted $AMP.

Token Pricing:

Certain of the indexed tokens may incur a spread; the minting of ALP is based on the lower value of the index token, while redeeming ALP relies on the higher value of the index token.

For stablecoin, the spread extends from the oracle price feed of the stablecoin to 1 USD.

The price of ALP is influenced by the spread of tokens price/weight in the pool.

Token Weights:

Fees for minting ALP, burning ALP, or executing transactoin vary depending on whether the action enhances or reduce the balance of assets. For instance, if ETH is the asset with the largest weighting in the alp pool actions that increase the percentage of ETH in the index incur higher fees, whereas actions reducing the amount of ETH have lower fees.

You can show token weights on the Dashboard and on ALP buy page.

Token weights adapt to hedge ALP holders based on traders' open positions. For instance, if many traders are long on ETH, ETH receives a higher token weight; conversely, if traders are short, stablecoins gain a higher token weight.

If token prices rise, the ALP price increases as well, regardless of the number of open long positions. The reserve portion for long positions remains relatively stable in USD value, using profits to pay traders during price increases and maintaining the USD value during decreases.

When traders are short and stablecoins have larger weights, ALP holders gain synthetic exposure to the tokens being shorted. For instance, if ETH is being shorted, the ALP price decreases with ETH price decrease and increases with ETH price increase, compensating for short position losses.