CaptainX - Founder of ApolloX
Kevin - Partner Growth Manager, BNB Chain
Introduction about ApolloX
ApolloX is a DEX futures platform. We have more than 70 trading pairs and we are probably the largest DEX futures platform on BNB Chain, both in terms of volume and active addresses.
Part I: ALP Sharing
Captain, can you give us a quick overview of what ALP pool is and why it is important for the evolution of ApolloX?
Sure! We are very excited to share with everyone about ALP. Basically ALP is the platform’s liquidity provider token representing a basket of assets. Currently it’s BUSD and USDT, and we will add other tokens soon. The ALP liquidity pool supplies liquidity for ALP-PERP markets and it acts as the counterparty for all trades of BUSD trading pairs newly listed in Lite Mode.
With this product, as Kevin mentioned, first of all it’s an on-chain product. It’s one direction that we’re constantly choosing. Also, it’s actually more like a staking product rather than a trading product. We see quite strong demand for the ALP minting. With this product, we can serve staking users, which has a larger user base compared to trading users.
Just out of curiosity, what is the current APY of the pool?
It’s around 50%.
And I think it’s actually even a bit higher. Obviously as more capital comes into the pool, the APY decreases. But still standing at a nice percentage, and since it’s stablecoins, there is no delta risk that the user needs to take on.
Yeah. So one of the sources of yield comes from APX, our platform token. As Kevin mentioned, currently the rewards are rather high. Since the trading volume against the pool right now is at a low level, the risks are rather small. It’s a good time to join in.
Got it. So I just want to dive deeper into how the ALP pool works, and what are the different sources of yield for the stakers and the pros and cons, risks and rewards. What are the factors someone who might be thinking about staking in the ALP pool should consider?
We accept both BUSD and USDT. There is no difference on which token you would like to use to mint ALP. Users can mint ALP starting from $1. Whoever stakes ALP participate in market making of ALP-PERP. Currently there are 2 sources of yield. One is the APX token rewards. These rewards are derived from adjustments in the APX allocation from the Trading Rewards Program. There is no additional APX allocation.
The major source of yield comes from market making. PnL of traders will be credited to the net asset value (NAV) of the ALP token. There will be another factor - the price movement of non stable assets if we add more tokens into the pool.
On that note, the pool will eventually support more than stablecoins, right? As a holder of say BNB, will I eventually be able to stake in the pool?
Well, BNB will definitely be the next one added to the pool. But we’ll probably have a limit for BNB on the launch day to see whether there is strong demand for that. We’ll probably limit it to <20% of the total pool value.
Once we have non-stables in the pool, I would imagine there will be possibilities for structured products or delta-neutral strategies or both, that could be built on top of it. Is that the plan?
Exactly. Well, it depends on the market conditions but I believe these kinds of projects will be possible. If there is a bull market, users would probably take some risk to have more exposure to non stable tokens. But if the market fluctuates or the bear market comes again, users would probably seek higher yield.
Makes sense. That’s what I’m excited about. Not just the perpetuals exchange which serves as a base, but also having it as the foundation or supporting block for other infrastructure and products, to build an entire ecosystem around it. With the move to on-chain, other DeFi protocols would be able to build on top of the success of ApolloX. [In future], there could be protocols that leverage the yield coming from ApolloX, they are also depositing funds into the trading pools for better execution and higher trading volume, which creates more fees for stakers. Maybe someone in the audience, if you’re a builder, this could be something interesting to work on.
Definitely, that’s the exciting part of DeFi. We welcome every project that has interest in us and wants to build on top of ALP. Please reach out to us and we’d love to provide all the support we can.
That’s great to hear. Something I just thought of, which many in the audience may not know, is that there are many avenues where people can trade, and that is actually powered by ApolloX. Aside from the ApolloX website itself, PancakeSwap and other exchanges are powered by ApolloX in the backend. Two questions:
- Are there other platforms integrated with ApolloX in the same way PancakeSwap is?
- With the launch of ALP Pool, does it affect that in any way like opening up new collaborations with platforms?
Well, we do have a business arm we call DEX Engine. As you mentioned, PancakeSwap is working with us. We have around 30 DEX partners including BabySwap, ApeSwap and several wallets and others.
We will launch ALP trading pairs with our partners. We just launched the ALP pairs on PancakeSwap today. For the staking function of the ALP pool, we need to discuss with our partners if they would like to onboard that.
Very exciting. That’s the beauty of DeFi. Projects can leverage the success of others and build a more robust ecosystem. I want to call attention to the pinned post in the Twitter Space which goes over some roadmaps for DeFi and GameFi projects on BNB Chain. A couple of them mentioned they’ll be integrating with ApolloX.
ApolloX, being one of the leaders in the space, is making lots of changes. Kudos to you guys for always pushing despite being in a bear market. So we talked about the APY of the ALP pool. Once the initial wave is over and we get back to a steady state of growth, what can we expect regarding the rate of new stakers into the pool, APX emissions, trading fees… What can we expect that rate to become?
I think it’ll be a bit hard to say. The market will decide. If the yield is high, it should attract more TVL. So the yield will decrease and the market will hit a balance. But compared to current products in the market, 10-20% will be my guess. I’d like to remind the audience that this yield is not risk-free. The premium here is the market price for taking the risk.
Got it. Obviously any returns above risk-free have risks you are taking on, and there’s smart contract risks, market risks etc. So good to weigh the returns against the risks and understand what risks you are taking on. Protecting your principal should always be your no. 1 goal.
Yup, basically if you look at the mechanism of ALP, the major risk for ALP pool comes from the positions it holds. Since ALP acts as the central counterparty, it holds the net position between the long and short traders. We publish these figures on our website. If you look at the positions now, it is very small, like 1-2% of the current TVL. As I mentioned, the current APY is quite high, around 50%. It’s not symmetrical currently, so the return is quite good and the risk is low. Again, good time to join in.
Yes, definitely, being early is important. What is interesting is, even though you are getting into this opportunity early, with ApolloX it’s not a new project. Typically a new product comes from a new project, so you’re taking on risks like the credibility of its team etc. In this case, the pool is new, but the team has been here for a long time and has delivered. Pretty cool.
Another thing is about trading fees. What are the current trading fees on ApolloX and for the ALP pool? How does it compare relative to the market?
It’s around the market level. The transaction fee for minting ALP is 0.1%. The fee for selling is 0.15%. If you trade ALP-PERP pairs, the fee is similar to other ApolloX pairs, which is 0.07%.
Very cool. Something that came to mind: For example for GMX, there was talk about one part of risk being what if someone drains the pool. What are your thoughts? If someone takes on a huge position, what is the influence on the pool?
As we mentioned, the risk comes from the positions held by the pool. Since the pool is new and we want to be cautious in the beginning, we set up a strict net position holding of 1 million for the pool. Right now, we have more than 3 million in the pool, about 30% of the pool. So we are very cautious and we will monitor the market condition and adjust it from time to time.
So kind of limiting the position size that can be taken in proportion to the risk management appropriate for the pool to take on. That’s good. The pool serves as the counterparty, and is against the PnL of the traders so if traders win, the pool loses. If traders lose, the pool wins and the stakers win. Got it. So the next thing is right now, what pairs are being traded against the ALP pool? I know before the ALP pool, there was an order matching engine in place. What is the division between the two in terms of trading pairs?
For the pool, the nominated assets are BUSD. We used to only have USDT pairs, currently we have 8 BUSD pairs trading against the ALP pool. BTC, ETH, BNB, APT, SOL, DOGE, MATIC and AVAX. We’ll have more in the future. Besides crypto, we’re thinking of adding other assets. Probably will launch the next product this week. We will launch an AI crypto index covering the hottest AI crypto projects in the market. We are also considering launching traditional financial assets as well.
Wow, okay that is really cool. Just to confirm, you’re saying the AI crypto index is launching next week?
Probably this week. Generally we only make announcements after listing, but it should be in the next couple of days.
Awesome, this is alpha guys. This is breaking news. You also mentioned that you guys are looking at non-crypto products? Can you elaborate, like which assets, what timeline?
We’re thinking of launching the first TradFi asset in a month’s time. If you look at the mechanism, the pool acts as a central counterparty. As long as you have a stable price index feed, you can launch any asset with strong risk management. We’ll test the waters in that field.
Is there any indication if it’ll be more equities-related, fixed income-related, FX, commodities or try out and see?
We’re thinking that FX will go first.
Very cool. I’d like to put up a poll. If there is a specific pair the audience would like. Meanwhile, for the ALP pool, what are the major plans you have in terms of marketing or other things in the works for 2023?
Well, for the ALP product specifically, ideally we want to grow staking and trading at the same time. Hopefully there will be a positive cycle. More trading, more profits for the pool. We’ll try to achieve a larger TVL. Currently, staking seems stronger. We’d like to grow the trading part and we’ll have campaigns like trading fee discounts to boost trading. And in the long run, we also seek to bring the trading process to the blockchain.
Got it. As Captain was answering that, I put up a quick poll on which FX pair you guys would like to trade the most. Euro dollar, Pound dollar, Japanese yen dollar, and if there are other pairs you would like to trade, please put them into the comments.
Ok, we’ve learned quite a lot about the ALP pool. As someone who is listening and wants to participate, how should they do it?
On the staking part, we’ve already analyzed the risks and returns profile. On the trading side, we are running a zero-fee trading campaign for ALP-PERP. I didn’t mention that currently the slippage is also zero. That is meaningful for traders who want to execute tens or hundreds of thousands in their orders with zero slippage, and zero fees in this period.
Amazing. With that said, let’s open up for questions. I’ll start to pull people from the audience.
Part II: Community Q&A
Question from @halfpizza0: Hello. I want to know is there any minimum or maximum amount of APX required for staking [in DAO] and are there any risks of staking on your platform? And I would like to know the lock-up period for it. Thank you.
In DAO, there is no limit for minimum or maximum tokens to stake. By default, we offer four time dimensions: 1 month, 6 months, a year and 4 years. Your rewards in DAO staking - we call it Power - is determined by two factors: how much APX you stake and how long you stake. It is a linear function. The more APX staked, the longer you stake, you get more Power. The rewards are distributed according to the Power.
Question from @Gimbaa2: My question is regarding the security of your project. You’ll agree with me security is vital, I want to know what are your safety measures and have you guys done any audits. Thank you very much.
First of all the code, or the contracts, are audited. We are audited by Certik. Secondly, given the hacking events [in the industry] recently, we’ve done another round of security checks. We will enable our contract to be upgraded on-chain. We have a cool-off period for the upgrade so the contract won’t be exploited, especially in the DAO. No one can upgrade the contract and get all the staking assets in the DAO. Hope that answers your question.
Question from @UniaswapO: What are the marketing plans you have to attract more investors?
We have two sets of campaigns. One is the global campaign on our website. We have a zero-fee trading campaign for ALP pairs. We usually run 1 campaign every week. We also have community campaigns both in our communities and with the KOLs we work together with. We’ll have 2-3 community campaigns every week. If you want to follow our campaigns, do follow us on Twitter or join our community.
Question from @Debenz_Guy: My question is do you have any ambassador program. If yes, how can I join? Thank you.
We do have a Champs Program. You can send an email to email@example.com and our marketing colleagues will contact you from there. For everyone in the audience, if you want to be a Champ, feel free to send us an email. We welcome everyone to join.
Question from @meenerls: How do you manage your project when the market is in a complete bear market?
Well, the nature of a futures platform is such that the business is less affected by the bear market because users can go long or short on a futures market. In the spot market, you can only long. You cannot make money in a bear market. But for the futures market, although the volume is still much lesser compared to the bull market last year, we do see the volume shrinking less as compared to the spot market. And the market seems to be recovering in the past few weeks, so hopefully the bear market is gone soon!
Question from @delioriz: I want to know about your business model for the long term.
We do believe our business model is sustainable. Futures trading is probably one of the most profitable businesses in the crypto industry. For the new ALP product, although most of the yield comes from token rewards, it’s not additional allocation. It is derived from the existing trading rewards program. We won’t add more token rewards but will boost trading volume so that the yield would come from the market making profit and thus would be sustainable in the long run.
Question from @Geomatician10: My question is after making lots of profit, how easy is it to withdraw from your exchange and what is the time limit before I receive my funds?
We don’t have a withdrawal limit. As long as you have the funds in your account, you can withdraw all as you wish. It’ll probably take a minute or two depending on the blockchain, so it should be very fast.
Question from @CryptoGagaYT: My question is about your deposit process. For a new user, it’s complicated. What will you do to make it simple and more user-friendly? The deposit method is not like other exchanges.
I think that’s because of how it’s set up. The current process is you connect your wallet to the contract and make the deposit before you can trade. First of all, like other DEXes, we want users to use their own wallets to trade. Secondly, we want to provide high throughput and help users save on trading fees. That is why the trading process currently is off-chain, and thus there is a deposit process. But it shouldn’t be too complicated.
Kevin: On that note, now that the ALP pool is the first step to moving things on-chain, are there plans to have the trading portion of it be on-chain as well so there would be no need for a deposit process?
Yes, we have plans for that. We are working on it.
Question from @_itsmeReg: Can you list the outstanding characteristics that make your project different from competitors and what competitive advantages does your platform have you feel most confident about?
First of all, we encourage everyone to test us out. You can rank projects on whether it’s user-friendly, very smooth to use. It’s easy to tell. We are very confident about our project in this regard. What sets us apart: We have the most trading pairs among all the DEXes. The trading experience is very smooth. It’s just like a CEX, it’s very fast, and it's very user-friendly. We do more things like always doing campaigns to attract users. We also keep listing new products and assets to give our users more trading options.
Question from @bitcatshow: We all know this project is heavily supported by BNB Chain. You guys also received an investment from Binance Labs. As a community, what can we do to accelerate this project and get it listed on Binance exchange. Should we promote actively on Twitter or anything you suggest?
That’s a very good question. Binance is very strict on listing and we are definitely interested in it. I think they do look at activity in the community as well as on socials. If any users or anyone in the audience wants to help us with that, we are very grateful. Definitely mentioning us or interacting with us on social media or joining our communities and being active, I believe would help.
Question from @UObeha: Do you have a plan for community events or trading contests in the near future? Or commodities even.
I guess the answer is maybe. As I mentioned, we will launch a new asset class. It depends on our marketing team, if they see a fit, we’ll probably launch a competition on the new asset class.
Question from @bullish_Pizza: Security is important for a project. Can we get information about your security system?
I think we’ve answered that previously. We’ve done something after all these hacking has happened. Kevin can probably add on this. On the BNB Chain side, they’ve also done lots. We set up a war room with BNB Chain. Whether they or we find something, we communicate. The Chain team, I do believe they have a strong security team. They help projects both locate the issue and help on that.
Kevin: On that note before we go, let’s look at the results of the poll. Seems like it’s pretty divided between euro, pound and yen, with yen having marginally more, which I’m surprised by. I thought euro would have 80% of the votes. With that said, Captain, any last parting words for the audience?
It’s an honour to be here and thanks everyone for joining. Thanks Kevin for hosting this. I think we’ve discussed a lot about ALP, so I’d like to encourage everyone to try it out.
Awesome, thank you. Thank you guys for tuning in.
This AMA has been edited for length and clarity. Listen to the full AMA here: https://twitter.com/i/spaces/1jMKgLAAoRPGL
Risk Reminder: Crypto trading carries a risk. All trading activities are done at your discretion and at your own risk. The information here should not be regarded as financial or investment advice from ApolloX. ApolloX will not be liable for any loss that might arise from your use of any financial product.
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