How to Sell Amp

How to Sell Amp

The Bullish Hypothesis of Amp

When deciding whether to invest in Amp in 2022 and beyond, one of the most important factors to consider is if the technology of the blockchain protocol, if it is a currency, has the potential for enormous utility and scalability. Key factors that can attract the interest of both retail and institutional investors are utility and scalability.

In order to speed up transactions in cryptocurrency networks, including the two largest in the world, Bitcoin and Ethereum, AMP, the native cryptocurrency of the Amp blockchain, is a collateralized token.

How has the pace of transactions been increased? Users of Amp can utilise their Amp tokens as collateral in cryptocurrency network transactions. The collateral use becomes complicated at this point.

If it takes too long for the transactions to process using AMP tokens, they can be liquidated to pay the fees and send the money to the recipient. But what about the transaction’s actual dollar amount? Is it also feasible to pay the full transaction cost, including the extra fees?

It is theoretically feasible. I’d say it’s doable, but only in very little doses. Consider the price of Bitcoin (BTC-USD), which is now at $44,000 as of March 2. More than 1.5 million Amp tokens are needed to send a Bitcoin as payment. That is a significant sum.

Is it not a great utility that Amp says it intends to “take money into the 21st century” by offering “immediate, verifiable assurance for any real-world application”? By employing smart contract features for collateral, you may decentralise risk even further.

The Negative Hypothesis

There is no need for collateral or to expedite the process if there isn’t a pressing need to make a digital transfer. The greatest benefit of Amp is essentially lost.

Amp appears to be charging an unreasonable premium for the collateral service it provides, with a market value of over $1.18 billion.

In the actual world, quick and easy transfers are highly desired, but I’m not sure if Amp can serve as everyone’s collateral.

the conclusion

Even though not all financial transactions require collateral, the cryptocurrency sector is full of tales of fraud and money laundering problems that could eventually prompt a global regulation.

Amp offers two inventions that will revolutionise digital transfers. partitions for tokens and collateral management.

Similar to escrow accounts in conventional banking, collateral managers can be tailored to specific requirements and used as collateral to support applications.

Token partitions are sophisticated rules that are applied to several areas connected by the same digital address and can carry out operations like “staking” tokens to earn money without actually transferring them to a smart contract.

These two aspects are, in my opinion, novel because they are the first of their kind in relation to any cryptocurrency.

Collateral for payment networks, for individuals, and for DeFi platforms are examples of real-world uses for Amp.

Stavros Georgiadis, CFA, has no positions (directly or indirectly) in any of the securities referenced in this article as of the date of publishing. The InvestorPlace.com Publishing Guidelines apply to the author’s opinions as expressed in this post.

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