The market capitalization of AMPL, the native token of Ampleforth protocol, has declined by over 60% in the last three days.

From about $719 million on Monday, the AMPL market cap went down to as low as $262 million today before recovering slightly to $323.8 million at the time of writing. AMPL is a price-elastic token, meaning its supply adjusts in response to demand, and thus, affects its market cap.

When the price of 1 AMPL is above $1, the token's supply is increased until the desired price equilibrium of $1 is reached. If the price of AMPL goes below $1, the supply is decreased until the price parity has been restored.

The price of AMPL token has gone down by about 50% in the last 24 hours to currently trade at around $0.86. This resulted in deflated supply and affected AMPL's …