The ApeX Protocol Project
ApeX is a decentralized, non-custodial, permissionless, censorship-resistant perpetual derivative protocol that enables the introduction of perpetual swap markets for any token pairs. It allows users to relegate crypto derivatives on the Ethereum blockchain with no intermediaries involved while maintaining total control over their private keys.
ApeX protocol is incubated by Davion Labs, a blockchain-impact and crypto incubator that focuses on solving most of the challenges and market opportunities in the Web3 revolution.
As Davion Labs’ first project, ApeX is a censorship-resistant and permission-less protocol that leverages the elastic automated market makers to facilitate the creation of perpetual swap markets for token pairs.
Dragonfly Capital Partners, a cross-border investment firm that aids the most promising opportunities in the DeFi and DEX economy is one of the investors of the ApeX Protocol. Other global investors which led the seed funding round include; Miranda ventures, Tiger Global, Jump Trading, Kronos, CyberX and M77 Ventures, and they all emphasized the value propositions that have been procured before ApeX’s emergence in the current DeFi market.
ApeX Mission & Philosophy
ApeX aims to empower traders around the world by enabling open and transparent financial tools that can help preserve and grow their wealth. We aim to drive financial inclusion and make crypto derivatives trading more accessible so that everyone can truly own their trades and be part of the exchange itself.
The ApeX protocol operates on three core philosophies:
1. Fully Permissionless: Open networks that are available to everyone to participate in the consensus process, which is used to validate on-chain transactions. On ApeX, anyone can create any market and trade any assets.
2. Liquidity in Perpetuity: Liquidity is a core part of the infrastructure; users do not have to trust the institution to execute trades, all that is required is to trust the code will execute as written, hence worry no more about rug pulls.
3. Full-Spectrum Asset Support: Liquidity providers can provide liquidity in any asset, which helps create a market for niche investment strategies.
ApeX Protocol features
ApeX is a decentralized, non-custodial, permission-less, censorship-resistant perpetual derivative protocol that enables the introduction of perpetual swap markets for any token pairs.
Key features of the ApeX Protocol include:
1. Permission-less cryptocurrency perpetual contract trading with leverage
Just like traditional futures contracts, perpetual contracts are similar and there is no expiration. Perpetual Contracts is similar to a margin-based spot market where you can trade close to the underlying reference index price.
A good number of DeFi projects that perpetual contracts for traders include dYdX, Injective, Perpetual Protocol, etc.
ApeX trading features:
- Coin-collateralized Leverage Trading
Leveraging increases your buying/selling power to enable you to trade with more capital than what you have in your wallet. Currently, most DEX platforms offer USDC-collateralized contracts but ApeX will also offer USDC-collateralized contracts.
We aim to focus on coin-collateralized contracts that once dominated the crypto market.
No doubt stablecoins are fundamentally a less volatile cryptocurrency with a greater potential unlike other types of currencies people already use every day. Stablecoins has enabled investors to generate yield on their crypto assets in the DeFi market while lessening the adverse effects of market volatility.
USDC, for instance, is one of the most popular lending assets on platforms although stablecoins still face challenges such as external audits and regulations, while algorithm-based stablecoins haven’t yet entered the mainstream. ApeX expects to provide users with coin-collateralized products for leveraged trading using only the base assets.
In addition, liquidity provision usually requires treasury allocation in project native token and quote taken from the protocol team, the decentralized autonomous organization (DAO), or the asset issuer, which may cause a heavy financial burden to the project.
ApeX aims to resolve this pain point by establishing a platform where the protocol team and DAO can provide liquidity using only the project native token while facilitating trades and other application scenarios.
- Rebase mechanism:
Rebase means there’s either an increase or decrease in the total supply of a token and this includes all holders and Liquidity Providers. It is done to adjust the token price, without affecting the value of anyone’s share of coins. Rebase either increases or decreases in supply works with a mechanism that regulates the supply algorithmically.
On ApeX, leverage the rebase mechanism for price anchoring and adjust price differences with just one click. ApeX proposes a rebasing mechanism.
The “rebase” mechanism serves as a hard-peg and is designed in a way that the virtual QUOTE asset balance can be adjusted according to price fluctuations. Once triggered, eAMMs will dynamically issue or destroy tokens so that the prices of perpetual contracts would closely track the underlying spot DEX markets.
The rebase mechanism will be triggered when the spot price of the ApeX pool deviates more than 5% from the index prices on other DEX pools. The eAMMs will dynamically issue and destroy virtual QUOTE assets accordingly.
- Protocol Incentivization:
ApeX offers incentive programs to encourage early adopters and spur organic growth of the protocol.
Users and participants will be incentivized as follows:
- Liquidity providers on non-PCV pools: Enjoy liquidity mining rewards from swap fees and associated leveraged trading fees (spreads, funding fees & liquidation fees).
- Liquidity providers on PCV pools: Users will be able to purchase the governance token, ApeX, at a discount.
- Referral incentives: Users will also be incentivized when they refer ApeX to their friends. Under the ApeX referral program, users stand to earn referral fees of up to 30% of referral transaction volume.
- Staking: ApeX token holders and ETH pool, APEX-ETH liquidity providers will be rewarded with ApeX tokens through staking based on a formula rewarding a combination of amount and lock time. Staked ApeX tokens will also provide greater value capture and voting power.
30% of the trading fees on the ApeX protocol will be allocated based on a weighted average to all users who’ve successfully staked $APEX.
- Trading and other activities: Users who trade on the ApeX protocol will be rewarded with the ApeX token through trading rewards, retroactive mining rewards, and other trading activities.
2. Elastic Automated Market Maker (eAMM)
An automated market maker (AMM) is a decentralized exchange protocol that relies on a mathematical formula to price assets. Instead of an order book that traditional exchange uses, here, assets are valued according to a pricing algorithm.
AMMs have significantly carved out their niche in the DeFi space because of how simple and easy they are to use. Making it this way in a decentralizing market is intrinsic to the vision of crypto.
On ApeX, the AMM model and the Constant Product Formula are the core of price discovery. However, ApeX uses a novel approach known as the Elastic AMM (eAMM), modeled after algorithmic stablecoin protocols’ efforts to keep it pegged by using on-chain algorithms that increase or decrease supply according to market conditions.
The team provides a spot-like trading experience and significantly improves capital efficiency by allowing single-asset provision as the BASE Asset while synthesizing the QUOTE asset.
3. Protocol Controlled Value
Traditionally, DeFi protocols employ a user-owned Total Value Locked (TVL) model, in which liquidity providers deposit an equal amount of two tokens to form a market.
Total value locked (TVL) means the overall value of crypto assets that are deposited in a decentralized finance (DeFi) protocol. It is a key metric for measuring interest in that particular sector of the crypto industry.
TVL can be determined in the following ways:
- Liquidity pools
Note: TVL only means the current value of the deposits themselves, not the yield that these deposits are expected to earn.
Protocol Controlled Value (PCV) categorizes the Total Value Locked (TVL) which represents all assets that cannot be redeemed by users. A good example of PCV is DAO treasuries.
A Protocol Controlled Value (PCV) model aims to solve these problems peculiarly. PCV was inspired by the Total Value Locked (TVL) model, whereby all assets locked in smart contracts are ultimately owned by the protocol and not redeemable by users. This guarantees that the liquidity of each perpetual contract market and users can be at ease knowing that no liquidity provider can pull out the protocol-owned liquidity.
ApeX uses the PCV model to retain liquidity in perpetuity to solve the ‘mercenary capital’ issue. Additionally, ApeX also supports user-owned TVL liquidity for users who prefer the traditional DeFi TVL model.
Additionally, ApeX also supports user-owned TVL liquidity for users who prefer the traditional DeFi TVL model.
ApeX protocol has a maximum supply of 1,000,000,000. The token serves the following utilities:
Governance: As a token holder you have the right to submit and vote on protocol governance proposals.
Protocol Incentivization: As a user of the protocol, you can earn ApeX tokens via participation rewards and liquidity mining on the ApeX protocol.
Staking: Users can stake ApeX tokens to earn rewards in ApeX tokens.
About ApeX NFTs
ApeX protocol successfully launched its beta version on the Arbitrum mainnet on February 28, 2022, and released a total number of 4,580 pieces of its original series of NFTs with special attributes to the public on March 8, 2022 and sold out March 11, 2022.
ApeX NFT has the subscription interest of the protocol’s governance token, as well as the proof of equity interest of its VIPs in ApeX’s future loyalty program. Apart from trading and token equity attributes, ApeX NFTs are very valuable as art collection pieces.
The public sale of the ApeX NFT has paved the way for the ApeX protocol to communicate and build its brand value and culture to audiences in the Web 3.0 space.
A total of 20 ApeX OG NFTs were sold in the form of whitelist invitations, and owners of these 20 ApeX OG collections are well-known leaders, senior researchers, and investors of DeFi projects. The remaining 4,560 ApeX Predators NFTs were sold to the public on ApeX’s official website on March 8, bringing early adopters to the protocol and building the community together.
The ApeX team will be rolling out a wide variety of marketing activities so stay glued to the space.
ApeX Loyalty program and fee schedule:
NFT holders will get eligibility to enjoy a tiered transaction fee discount.
All trades occurring on the ApeX protocol will incur a 0.1% transaction fee at the very beginning. Tiered Fee schedule will be released according to the business performance in the future.
ApeX Referral Program;
The ApeX protocol will release the referral program as user incentives, any eligible referrer can enjoy 10% lifetime cash back on referee’s derivatives trading fees and 3% transaction fee cash back on their own derivatives trading when the number of referees reaches the threshold. All referees can enjoy 3% transaction fee cash back on their own derivatives trading.
More detailed rules about the referral program will be released soon.
In summary, on ApeX you can:
1. Trade any $Web3, $DeFi, $meme, and/or $Game tokens on the derivatives market with 10X leverage.
2. Elastic Automated Market Maker (eAMM) and Protocol Controlled Value are the core features that differentiate ApeX protocol from others in the market.
3. Leverage the rebase mechanism for price anchoring and adjust price differences with just one click.
4. Become the market maker on ApeX protocol for your preferred tokens and grab very attractive bonus rewards via liquidity provision.
5. Purchase ApeX’s governance token and stake to earn a high APR.
6. 30% of the trading fees on the ApeX protocol will be allocated based on a weighted average to all users who’ve successfully staked $APEX.
7. loyalty program and tiered fee schedule will be launched as long-term user incentives.
8. Referral and ambassador programs launched as incentives for partners in the market to build up the apex ecosystem.