# How does AmpUSD work?

Introducing AmpUSD

An Unprecedented Stablecoin - AmpUSD is the first stablecoin ever to be backed by AMPL & SPOT - A truly unique form of collateral.

<figure><img src="/files/TU4M6rkA1eSZ7k2COWay" alt=""><figcaption></figcaption></figure>

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**What is AmpUSD?**

AmpUSD is a synthetic dollar, part of a collateralized debt position (CDP), backed by Ampleforth's AMPL and SPOT — a low-volatility commodity money token, also known as a “flatcoin.” SPOT is designed to adjust its value to track inflation.

For more information on SPOT, check out the [SPOT Primer](https://www.spot.cash/primer/).

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**How does AmpUSD work?**

Users can deposit AMPL or SPOT as collateral into the protocol and mint AmpUSD against it. What sets AmpUSD apart is that users can customize their loan-to-value (LTV) ratio and interest rate, offering a high degree of user flexibility.

As SPOT is designed to increase in value over time by tracking inflation, the value of the collateral typically rises, reducing the LTV without needing additional collateral. This allows users to either “set it and forget it” or borrow more AmpUSD as needed.

Adopting the SPOT mechanism within AmpUSD's infrastructure facilitates a stablecoin that is permissionless, decentralized, and fully customizable, all while outpacing inflation. Asymmetry aren’t the only ones that share this philosophy:

<figure><img src="https://cdn-images-1.medium.com/max/1600/0*axeX6BZyJ9AYRueY" alt=""><figcaption></figcaption></figure>


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