Inflation is the riddle that money never quite solves. In a space where “stable” often means “centralized,” crypto’s latest craze-RWA and institutional DeFi-has been vacuuming up stablecoin deposits to chase yield, while retail arrives late to the party at sky-high valuations. But what if a fully decentralized protocol could offer competitive yields on top of stable assets and still let everyday users get in early?
In this post, we explore those questions through the lens of a conversation with Evan Kuo, co-founder of Ampleforth. Kuo traces a path from the early DeFi summer-when Ampleforth helped pioneer liquidity mining and introduced a decentralized unit of account-to SPOT, a “flatcoin” designed as a low-volatility store of value. Along the way, he lays out a broader vision: reorganizing volatility, separating senior and junior risk, and inching closer to a form of money that is stable, durable, and decentralized.
We’ll unpack the institutional tilt of today’s RWA boom, why many tokens debut at lofty valuations, and how Ampleforth’s architecture aims to rebalance that dynamic. We’ll also look at the short-term opportunity Kuo sees for Ampleforth relative to today’s DeFi giants, and the long-term blueprint behind SPOT’s attempt to resist inflation without sacrificing decentralization.
If you’ve wondered whether crypto can build a better money-not just a faster one-this is a grounded tour through the trade-offs, mechanisms, and ambitions behind that pursuit.
Breaking the institutional moat in RWA yield open access, transparent onchain returns, retail friendly deposits, and fair launch valuation discipline
Today’s “RWA yield” buzz has been captured by centralized gatekeepers that vacuum up massive stablecoin deposits, post headline rates, and float tokens at sky‑high, often multi‑billion, valuations before retail can even touch the ground floor. Evan Kuo’s journey from AMPL-a decentralized unit of account born in DeFi Summer’s early liquidity mining-to SPOT, a low‑volatility store of value created by reorganizing volatility into senior and junior tranches, sketches a different route: protocol-native, transparent, and open by construction. Instead of ceding advantage to whitelists and custodians, this approach aims to scale to “institutional DeFi” size while preserving permissionless participation and market-discovered pricing.
- Open access deposits: Non-custodial, permissionless, crypto-native from day one.
- Transparent onchain returns: Risk and reward routed through auditable contracts, not opaque term sheets.
- Retail‑friendly participation: A culture informed by early liquidity mining-let users in early, not last.
- Fair‑launch valuation discipline: Growth earned through adoption, not pre-minted billion‑dollar caps.
By starting with a decentralized unit of account and evolving into a flatcoin that dampens volatility via tranche mechanics, the stack makes room for yield on top of stable assets without the institutional moat: pricing is set onchain, participation is broad, and the economic rules are visible to all. In short, the same ethos that made AMPL a DeFi Summer pioneer-permissionless liquidity and transparent incentives-now underpins a path that can meet the scale of institutional DeFi while keeping the doors open for everyday crypto participants.
| Attribute | Status Quo (Centralized RWA) | AMPL → SPOT Path |
|---|---|---|
| Access | Gated/whitelisted | Permissionless |
| Returns | Off‑chain & opaque | Onchain & auditable |
| Early entry | Institution‑only | Retail + crypto‑native |
| Valuation | Pre‑priced in billions | Market‑discovered |
| Risk handling | Custody/issuer‑centric | Protocolized tranching |
From AMPL to SPOT channeling volatility into senior and junior tranches to achieve a low volatility flatcoin and clear guidance on choosing tranche exposure and use cases
Starting from a crypto-native unit of account, the AMPL design let contracts be denominated on-chain while embracing supply-driven variability. The breakthrough came when that variability was purposefully channeled: by reorganizing AMPL’s volatility into senior and junior tranches, the system isolates a low-volatility store of value-SPOT-without depending on custodial balance sheets. Instead of mimicking the centralized, deposit-heavy playbook of institutional DeFi, this path keeps the mechanism decentralized and transparent: the junior side absorbs shocks, the senior side inherits stability, and the emergent flatcoin profile is built from cryptonative mechanics rather than off-chain guarantees.
Choosing your exposure becomes a matter of aligning risk appetite with role. If you want a durable, low-volatility asset for denominating agreements and preserving purchasing power on-chain, senior exposure is the natural fit. If you’re comfortable taking on variability to support the system and seek amplified outcomes tied to volatility absorption, junior exposure can make sense. In practice, the pairing creates a spectrum: the senior tranche serves as the flatcoin core, while the junior tranche functions as the volatility sink-use one for stability-first utility, the other for risk-bearing participation.
- Choose Senior when you value stability, need a unit for pricing on-chain activity, or manage treasuries with low drift tolerance.
- Choose Junior when you can shoulder swings, want to backstop and bootstrap growth, or aim to capture variance-driven upside.
| Tranche | Risk | Who It Suits | Use Cases |
|---|---|---|---|
| Senior | Low | Stability seekers | Flatcoin holdings, on-chain pricing, treasuries |
| Junior | Higher | Risk-tolerant participants | Volatility absorption, system growth, tactical exposure |
Short term playbook for crypto native participation prioritize liquidity mining and Uniswap pools, track depth and slippage, prefer audited contracts and dynamic caps, and size positions to risk
Institutional DeFi and RWA are soaking up stablecoin deposits, but that scale comes with centralized gatekeeping and frothy token valuations. The near-term edge for crypto natives is to lean into what already worked during DeFi summer: be early to liquidity mining and Uniswap pools where incentives and organic usage intersect. Ampleforth’s history of pioneering LM on Uniswap, and the evolution toward SPOT (a low-volatility store-of-value built by reorganizing volatility into senior/junior tranches), sets a template for retail to participate before the downstream rush. Focus on liquid venues, watch execution quality, and treat every pool and tranche as a distinct risk surface.
- Prioritize liquidity mining where usage is real, not just emissions; AMPL and SPOT pairings mirror prior Uniswap success.
- Track depth and slippage to avoid adverse execution; shallow pools magnify volatility and fees.
- Prefer audited contracts and dynamic caps that pace growth and resist mercenary capital surges.
- Size positions to risk: senior-like exposure (SPOT) for stability, junior-like or AMPL exposure for volatility and upside.
- Stay fully on-chain to align with the project’s decentralization ethos and keep custody friction low.
| What to track | Why it matters | Where to check |
|---|---|---|
| Pool depth & slippage | Execution quality and exit safety | Uniswap analytics |
| TVL and fee APR | Real demand vs. emissions | Pool dashboards |
| Audits & upgradability | Code risk and governance control | Docs/repos |
| Caps & utilization | Growth pacing and congestion | Protocol UI |
| Tranche mechanics | Volatility routing (senior/junior) | Whitepaper |
Treat this as a sprint while the market digests a “perfect money” path: a decentralized unit of account (AMPL) enabling contracts on-chain, and a flat, low-volatility asset (SPOT) that can scale without centralized rails. In practice, that means entering incentivized Uniswap pools early, laddering entries, and letting the market validate traction before concentrating size. Keep a neutral bias: chase sustainable yield over flashy APYs, and let the protocol’s design-tranching volatility, on-chain distribution, and transparent parameters-do the heavy lifting.
- Enter gradually and rebalance on volume spikes.
- Compound fees rather than chasing headline APY.
- Monitor governance for cap changes and parameter shifts.
- Exit rules pre-defined: widen spreads = lighten size.
Blueprint for an inflation resilient decentralized money stability through elastic supply, strong decentralization, credible governance, and research grounded design with a simple diligence checklist
Designing money that can outlast inflation starts with a clear separation of functions and a bias toward decentralization. In practice, that means starting from a decentralized unit of account (as Ampleforth did) so onchain contracts can be denominated natively, then reorganizing volatility into senior and junior tranches to surface a low-volatility store of value (the SPOT flatcoin) without leaning on custodians. This path was informed by hard lessons about what can and cannot be done on decentralized systems, and by engaging credible academic advisors (e.g., from Stanford’s Hoover Institution) to ground the mechanism design. The result is a blueprint that resists the institutional DeFi playbook-where centralized entities gatekeep early deposits and valuations-by maximizing openness and research-first iteration.
- Elastic supply: Employ supply-adjusting or tranche-based mechanisms to absorb shocks while preserving the unit of account.
- Strong decentralization: Keep access permissionless so retail can participate early; avoid reliance on custodial RWA pipelines.
- Credible governance: Anchor rules in transparent, onchain processes and invite scrutiny from independent economic researchers.
- Research‑grounded design: Evolve from hypotheses (AMPL) to implementations (SPOT) with empirical feedback from real usage.
Use the following diligence checklist before trusting any “inflation‑resilient” money. The goal is to distinguish open, credibly neutral protocols from high‑valuation, institution‑gated wrappers on yield. Favor systems that demonstrate decentralization in practice, publish clear mechanism rationales, and show a lineage of research-driven iterations instead of marketing promises.
- Access: Can non‑institutional users participate from the start, or is early growth gated?
- Mechanism clarity: Is volatility handled transparently (e.g., via tranching) rather than hidden behind opaque pegs?
- Custody risk: Does stability depend on off‑chain entities, or on fully onchain logic?
- Governance credibility: Are there independent economic advisors and public rules, not discretionary committees?
- Track record: Has the team shipped through prior cycles (e.g., DeFi summer) and iterated based on outcomes?
| Pillar | AMPL/SPOT Tactic | Red Flag |
|---|---|---|
| Elastic supply | Unit of account + volatility tranching | Static pegs backed by custodians |
| Decentralization | Permissionless, retail can enter early | Institution‑only early deposits |
| Governance | Research‑anchored, transparent rules | Opaque committees, discretionary pauses |
| Research | Iterative path: AMPL → SPOT flatcoin | One‑off whitepaper, no field testing |
Future Outlook
If the past few cycles taught us anything, it’s that “perfect money” isn’t a single coin waiting to be discovered, but a set of design choices we test in the wild. In this conversation, Evan Kuo traces a path from Ampleforth’s early experiment as a decentralized unit of account to SPOT’s attempt at a low‑volatility store of value-reorganizing risk into senior and junior tranches, courting yield without ceding control, and asking whether retail can participate before institutions set the terms.
The promise is clear: match the scale of institutional DeFi without the centralized choke points that define it today. The open questions are just as important: Can flatcoin designs stay resilient in stress? Who ultimately bears tail risk in a tranching model? How do yields endure without hidden dependencies, and can governance remain credibly neutral as adoption grows?
Whether you’re skeptical or intrigued, this is the kind of work that moves the conversation forward. If you want to dig deeper, watch the full interview, read the docs, and pressure‑test the assumptions yourself. Perfect money may not arrive all at once-it might be engineered, iterated, and earned, one design constraint at a time.