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ALP Token

ALP (Amped Liquidity Pool) serves as the liquidity provider token for the Amped ecosystem. It represents a share in a single, aggregated liquidity pool that supports all trading on the platform.

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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).

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Key Design Features

  • Single Unified Pool: All trades are backed by one aggregated liquidity pool
  • Multi-Asset Index: Supports a diverse array of collateral assets
  • Counterparty to Traders: The pool acts as the counterparty to all positions
  • Oracle-Driven Pricing: Uses external oracles for accurate, manipulation-resistant pricing

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Acquiring ALP

  1. Visit the Buy page on Amped Finance
  2. Select “Buy” under ALP
  3. Choose your input token from the available index tokens
  4. Enter the desired quantity
  5. Approve and complete the transaction

Your ALP tokens will automatically be staked, initiating:

  • Escrowed AMP (esAMP) rewards accrual
  • ETH rewards accrual

Monitor your rewards on the Earn page.

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Benefits of Holding ALP

Newly minted ALP are automatically staked and provide:

  1. Fee Sharing

    • Participate in 70% of all generated protocol fees
    • Includes swap fees, leverage trading fees, and liquidation fees

  2. Token Rewards

    • Earn escrowed AMP (esAMP) tokens
    • Can be staked for additional rewards
    • Can be vested to AMP over 12 months

  3. Flexible Exit

    • Close positions at any time
    • Withdraw supplied collateral
    • Triggers ALP burn mechanism

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yALP: Auto-Compounding Vault

Amped introduces yALP, a yield-bearing vault that revolutionizes how liquidity providers earn:

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What is yALP?

  • An ERC-4626 compliant tokenized vault
  • Automatically compounds ALP rewards
  • Represents a share of staked and compounding ALP
  • Freely transferable unlike staked ALP

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Key Benefits

  1. Hands-Off Compounding: Vault automatically harvests and reinvests rewards
  2. Gas Efficiency: Consolidates compounding into aggregated transactions
  3. Transferable Liquidity: yALP tokens can be traded or used as collateral
  4. Fair Accounting: Uses pre-deposit calculations to prevent exploitation

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How It Works

  • Deposit ALP → Receive yALP
  • yALP/ALP exchange rate increases over time as rewards compound
  • Withdraw anytime by burning yALP for ALP

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Advanced Liquidity Management

The ALP pool employs sophisticated mechanisms that adapt to market conditions:

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Bull Market Optimization

  • Reduces stablecoin exposure
  • Increases allocation to appreciating assets
  • Allows LPs to benefit from market growth

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Bear Market Protection

  • Increases stablecoin allocation
  • Reduces volatile asset exposure
  • Protects pool from excessive drawdowns

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Dynamic Fee Adjustment

  • Real-time fee adjustments based on asset utilization
  • Higher fees for high-demand assets
  • Lower fees for underutilized assets

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Token Pricing

Price considerations include:

  1. Spreads

    • Index tokens may incur spreads
    • Minting uses lower value of index token
    • Redeeming uses higher value of index token
    • Stablecoin spread extends from oracle price to 1 USD

  2. Pool Balance

    • Price influenced by token spread/weight in pool

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Token Weights

Fees vary based on action impact:

  1. Weight-based Fees

    • Higher fees for increasing dominant assets
    • Lower fees for reducing dominant assets
    • Visible on Dashboard and ALP buy page

  2. Dynamic Adjustment

    • Weights adapt to hedge ALP holders
    • Based on traders’ open positions
    • Example: High ETH weight during long positions

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Price Protection

  1. Long Positions

    • ALP price increases with token prices
    • Stable USD value for long position reserves
    • Profits used to pay traders during price increases

  2. Short Positions

    • Larger stablecoin weights during shorts
    • Synthetic exposure to shorted tokens
    • ALP price moves inversely with shorted assets

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Risk Considerations

  • Value can fluctuate based on protocol performance and market conditions
  • Exposure to impermanent loss
  • Subject to trader PnL (pool pays winning traders, collects from losing traders)
  • Different risk profiles across different network deployments

For more details about the technical implementation and security features, refer to our Whitepaper.