Free Energy and Risk Minimization by AMPL-SPOT System
@AmpleforthOrg @ButtonDeFi recently launched spot.cash.
The censorship-resistant AMPL-SPOT system minimizes Risk, transparently. The system inputs a reliable price index (2019 CPI adjusted USD) to output an inflation-resistant store of value. Such a theoretical solution grounded in game theory was proposed by the Nobel Prize winning mathematician John Nash.
This system can be built only in Decentralized Finance (DeFi) because it requires the Trust and transparency of Smart Contracts. The system is the first of its kind and addresses all of the following:
Thread content highlights:
AMPL is a modular building block like UNIX
Modularity enables the stratification of Risk via Rebase and Tranche
“Risk” is contextualized within a Bayesian/ML framework as Free Energy
From an Active Inference perspective, the system can be understood to minimize its Surprise about the future “price” of Inflation by computing a derivative designed to stabilize this price