ApolloX Captain - Founder of ApolloX
Gabriel - CMC Moderator
- Hi everyone, glad to be here. I am the founder of ApolloX. My background is in the traditional finance industry. I used to be a futures broker in the traditional futures business, then I joined one of the top centralized exchanges for a couple of years before I started ApolloX.
- ApolloX is a DEX for futures trading. We launched about 1.5 years ago. Our TVL is about $42M, the largest among derivatives DEX on BNB Chain. We received investment from Binance Labs and we have 2 versions of our product.
- V1 is order book futures and V2 is our focus for today.
How would you define ApolloX’s business model in terms of futures trading?
- The business model is quite simple. Whether a CEX, DEX, spot or futures exchange, we charge commission fees. That is the revenue source.
- A big difference for a DEX like us is that we distribute revenue to DAO members who hold and stake APX, our native token.
What has the road been like from V1 to V2, and how does V2 work? What are the main differences between V1 and V2 for users?
- We launched V1 quite a long time ago. The product serves one type of users pretty well — those who care about low fees and more trading pairs.
- At the same time, we noticed that there is another type of users, especially DeFi users, who care more about transparency. They want to have full custody of their trades. V2’s trading process is 100% settled on the blockchain so you have 100% custody.
- V2 uses a liquidity pool model. We call it ALP, ApolloX Liquidity Pool. The pool acts as a counterparty to all trading users. As you mentioned, futures is a niche product. It’s not for everyone, although the volume is quite huge.
- But staking is more common for the majority of users. For ALP, users can stake ALP to be the liquidity provider and earn several sources of yield.
- By launching V2, it allows us to serve a much broader user base.
You guys have already made some V2 improvements which really differentiate it from V1. Do you have something next in line you want to improve or implement?
- Launching V2 doesn’t mean we’re abandoning V1. V1 is still a core product for one type of users.
- For V2, we launched about a month ago. We will be launching new trading pairs continuously. Given that it is a pool model, the liquidity is shared among all the trading pairs listed. For each new asset launched, it uses the same liquidity from this pool. That makes it easier for us to launch new assets as long as we have stable price feeds.
- You may notice that we have some forex pairs other than crypto pairs. We can also list other asset classes like indices in the future.
- We’ll also keep improving the UI/UX. We just changed the display of APY on our webpage to better indicate the fee revenue generated from the protocol.
- We also have some risk management enhancements that will be launched soon.
If there are more people using your dApp, how would ApolloX plan to deal with network congestion / a sudden influx of users?
- That would be a sweet burden. The throughput of the blockchain is not as low as we imagine. Take BNB Chain for example: It takes about 3 seconds to generate one block. TPS is about 70 to 80. For each block, it can handle about 200 to 250 transactions.
- But if you look at the numbers, there are only a few thousand transactions a DAY, far below the throughput limit right now. If a sudden influx of users really happens, it’ll probably just take a longer time for the trades to be executed, but currently it’s not a problem.
- If that happens, we will consider supporting Arbitrum or Optimism in the future, or on chains whose TPS is much higher.
V2 is only available on BNB Chain, right? Correct me if I’m wrong. Quick question, how do you guys see the potential of a multichain environment?
- For V2, we only support BNB Chain right now. But for V1, we also support Ethereum and Arbitrum.
- The architecture is different for V1 and V2. It’s easier for us to expand to multichain on V1. But for V2, since it’s a pool model, we got to have separate pools on different chains to expand. The liquidity would probably also be harder to share between blockchains. For V2, it’s not as easy as we would want.
- The ecosystems for different chains are different. Currently, it seems like the perpetual trading ecosystem on Arbitrum is booming as compared to other chains. We are closely monitoring the development of everything happening on Arbitrum.
- There are some new L2s, like zkSync. We are also monitoring them. As a trading dApp, we do have plans to expand to multichain for both V1 and V2 products.
Captain, I’d like to ask you something specifically about V2. What do you think are the highlights of V2 and for people already into futures trading or who want to trade futures on ApolloX, are there any benefits or something tailored for them?
- I can share more on V2 for users who may not know how V2 works.
- As I mentioned, the ALP pool is the counterparty. We have around $10 million sitting in the ALP pool right now. Let’s say you’re a V2 trader and you come to our trading website. When you open the trading page, there are several trading pairs you can choose. The experience will be similar to a centralized exchange.
- What’s different is that you use your wallet to trade. You connect your wallet, you choose your trading pair, let’s say BTC, and you open a $1000 position. After that, you authorize the trade from your wallet.
- Let’s say you hold a long $1000 position. The trade will be settled on BNB Chain. The ALP pool will automatically hold a $1000 short position. So you are trading against the pool.
- For traders, the biggest advantage is self-custody. Like other DeFi dApps, there’s no KYC, no tedious processes, no deposits and withdrawals etc. You trade directly from your wallet, and it is 100% self-custody.
- If you are a staker and you stake in the ALP pool, you’re trading against the traders. There are 3 sources of yield: One is the trading fees. Part of the commission paid by traders will go to the ALP pool. The funding fee and liquidation fee also go into the ALP pool. The second reward would be the APX token rewards that we distribute to ALP holders. Currently, the APY is around 20-30%. This part is actually risk-free. Actually, both the fees and the APX rewards are risk-free.
- The (third and) risk part is the trading PnL. It is a market-making PnL, where there are traders holding long positions or short positions, and the net position is relatively low for ALP as compared to the assets it holds. This PnL from market-making also goes into the ALP pool.
- We do have a net asset value (NAV) chart for users’ reference on our website. It has a quite nice risk-return profile for the product. If you’re a staker, definitely check it out.
Building on top of that: I’d like to ask more details on the Trade Rewards Program and how it works. Also, for users new to the platform, in terms of ALP, keen on listening more about it from you.
- Sure, so ALP stands for ApolloX Liquidity Provider Token. If you want to stake to earn the 3 rewards mentioned, we support quite a few assets to mint the ALP token. Either by stablecoins like USDT, USDC or blue-chip coins like BTC, ETH and BNB.
- Let’s say you use USDT and the NAV of ALP is $1. You can mint 1000 ALP tokens with 1000 USDT or USDC. You can stake the ALP on our website and we will distribute APX, our native token, to you. The APY of the APX rewards is, let's say, 20%, so that means if you stake your ALP for 1 year, you’ll get about $200 worth of APX. That is risk-free.
- The other two rewards; one is the fees as I mentioned. Users trade and pay commission. Part of this commission goes into the ALP pool and that will be reflected by the net asset value of ALP. Let’s say if there are $100 or $200 fees paid annually to your ALP, your $1000 ALP will be worth $1100 or $1200 at the end of the year. This is another part of APY.
- The third part is unpredictable. It is the PnL from market-making where you gain a profit or have a loss by providing liquidity to traders. If you look at the historical data, retail traders (not 100% for sure) tend to lose money. I hate to say that, but if you look at the historical data, ALP usually has positive PnL in a longer period of time. That would be the third source of yield for the ALP token.
Captain, are there any specific topics that you’d like to highlight? You’ve mentioned the TVL and a couple of interesting numbers. I believe people would like to hear about them and realise how big ApolloX really is in 1.5 years of business.
- Well, we’ve seen quite huge volumes. I don’t have the total volume right now, but it should be around $100 billion. We used to get around $100 million in volume a day. But the market cooled down last year as you know, so we are looking at $50 million a day for V1.
- For V2, given that it’s a newly launched product, we just finished our first epoch of Trading Rewards Program. The total volume is $129 million and the total fees that we collected is a bit more than $100,000.
- Actually, I would like to mention our trading rewards program. Basically, we offer a rewards pool on a daily basis, currently it’s 200,000 APX per day which is worth around $10,000 USD.
- Rules are simple. If you trade on V2, you will be eligible to split the pool, which receives trading fees paid by traders.
- We collected $100,000 total fees for the 1st epoch and the ROI is around 74%, which means you will get 74% back of the commissions you paid in APX.
- If you look at yesterday’s number, the ROI is 105%, which means the rewards you get is more than the commission you paid.
- The fees for DEX trading is generally a bit higher compared to CEX. But given the TRP, our fees are actually quite low right now. It’s a good time to try.
What investment value does ApolloX provide? What kind of investment or product can I expect as someone that has never used ApolloX before? What can I do on the ApolloX dApp?
- We serve 2 types of users; one is futures traders, the other is stakers — those who prefer low-risk, high-yield products. They can stake in our ALP pool.
Plans to expand to other blockchains and where do you stand at the moment?
- For V1, we are already supporting BNB Chain, Ethereum and Arbitrum, and the next one would probably be zkSync.
- For V2, we haven't decided yet but probably Arbitrum next.
What is the next big thing for ApolloX? Are you guys aiming for any big developments, releases, updates etc. Give us a hint of what to expect in the future for ApolloX.
- V2 is quite a big thing for us. We’ll focus on it in Q2 this year. We’ll add more trading pairs and keep improving on the UI/UX etc.
- We’ll probably bring a referral system to V2 as well.
In terms of the roadmap for ApolloX V2 and ALP, what are your plans at the moment? And also, let’s say I want to have more information on ApolloX, besides following you guys here on CoinMarketCap Community, where can I get closer to the team and the updates?
- We are one of the most active contributors on CoinMarketCap. We will update all product launches, marketing campaigns on CoinMarketCap.
- You can also join our Telegram community or follow us on Twitter of course.
- We also have a Gitbook page, if you want to know about our tokenomics, our roadmap, we update those on Gitbook.
- As for the roadmap this year — I haven’t mentioned it today — besides the retail business, we also have a 2B arm. We call it DEX Engine. That’s a product where we help other DeFi projects — whether spot swaps, or wallets — to build their own futures platform. For DEX Engine business, we will adjust it from V1 to V2 product. That’s one thing we’re doing.
- We will launch new functions and allow more assets as margin for trading. Currently, for V1 we support quite a lot of assets. For V2, we support USDT and USDC as margin. BNB will be next. I think I’ve mentioned the referral system as well. I think we could have it by the end of Q2.
One last question people have is about APX specifically, in terms of usage/utility. I’d like to put it together with another question, which is about potentially considering other community features such as copy trading for example. Please also share a little bit more about APX specifically.
- For social trading, one beauty of DEX is that every transaction is transparent. This is one thing we are building. We want to build a SDK for either traders or other DeFi project builders.
- For traders, they can use the SDK to place orders or make their trading automated. For other DeFi projects, they can build on this SDK other products like social trading. If you notice an address doing really great trades, then this social trading platform can just follow all the trades of this address and offer this function for their users.
- We save most of the APX for trading rewards. That is an important method we use to acquire new users.
- We believe that it is important to develop the use cases of the token itself. Currently, the two most important use cases are: 1. Using APX to pay commission fees on V1, 2. Stake APX in DAO to both participate in governance and to share revenue distribution.
Captain, any last words before we wrap up this event?
- Thanks everyone for listening. We’re quite proud of what we’ve built, so definitely check us out and I do believe that shifting from CEX to DEX is a trend that makes sense, and more users will care about transparency and self-custody.
Note: This AMA recap has been edited for length and clarity. Listen to the full AMA on CoinMarketCap Community.
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