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Vaultka x ApolloX: Discovering ApolloX AMA Recap - Jul. 4, 2023

ApolloX

vaultka

Speakers: 

Valentina — Business Development Manager, ApolloX

Finish - Advisor, Vaultka

 

Introducing ApolloX 

  • Thank you Vaultka for inviting me to share more about perpetual DEX trading.
  • ApolloX is the biggest derivatives DEX on BNB Chain. We have two trading modes — one is the order book model which supports Arbitrum (among other chains). For the on-chain model, we are considering to expand to Arbitrum as well. 
  • We look forward to having a collaboration with Vaultka as well.
  • We are a dynamic team of crypto enthusiasts from traditional financial institutions, tech companies and top crypto exchanges.
  • My name is Valentina and I’m the Business Development Manager from ApolloX. I first got involved in crypto in 2017. At that time, everyone was talking about DeFi infrastructure. In a short 4-5 years, we see Ethereum shift from PoW to PoS. We see L2 and even L3 solutions to solve fundamental blockchain problems. Development is faster than in any other industry.

 

AMA Questions

What was it like back in 2021 when you decided to create ApolloX? What was your purpose?

  • For us, there were a lot of events. Especially in the event of the FTX collapse, we saw that centralised exchanges (CEX) were criticised for their lack of user privacy, high transaction fees and holding too much power. 
  • There’s a common stance that decentralized exchanges (DEX) is the logical solution. DEX allows users to retain control of their private keys and funds, and trade in a permissionless environment for extra privacy. 
  • However, let’s go back to 1-2 years ago. There were a lot of spot DEXs like Uniswap appearing. However, for derivatives, there were not a lot of DEXs in development. That’s why we created ApolloX Finance, and we aimed to make crypto accessible to everyone — not just traders & quants. 
  • Being trustworthy and user-centric are imperative. Our mission is to create a platform that is easy, accessible and open to everybody, regardless of their abilities. 
  • The orderbook mode in ApolloX is quite similar to the CEX experience, but users can trade with a DeFi wallet.

 

What were the differences in chains back then and why did you decide to launch on BNB? What are some benefits of expanding to Arbitrum. 

  • We started around November 2021, we’re around 1.5 years old.
  • At that time, there were no derivatives exchanges building on BNB Chain. We were the first derivatives exchange. In terms of trading volume and active users, we’re currently leading on BNB Chain.
  • Interoperability is very important for DeFi protocols so we are trying to expand to other ecosystems too. Arbitrum has a name for derivatives trading, and the education cost for users on Arbitrum is lower than for other chains.

 

Interesting. If you’re planning to expand to Arbitrum, there’s already a lot of competition there. How does ApolloX Finance differentiate itself from other decentralized exchanges in the market and what benefits will users get?

  • Firstly, we have two trading modes. Users can choose which model they would like to use. 
  • A traditional orderbook model, the trading experience is quite similar to a CEX but with DeFi wallet login. We offer the most trading pairs amongst all futures DEXs. We have about 70 perpetual markets with high leverage up to 200x.
  • We also have on-chain futures without registration or deposits. All transactions are executed on-chain. Those who hold or stake our liquidity provider token ALP can earn trading fee income and staking rewards.
  • We give users the freedom of choice. For those who come from CEX, they can trade in the orderbook mode which has more advanced features. For those new to DeFi, the on-chain mode has a low barrier to entry. 
  • For the fully on-chain perpetuals, we also have forex trading pairs. It is not just limited to crypto.

 

Can you explain the differences between your on-chain mode and how GMX’s works?

  • It’s similar in the sense that GMX has a GLP pool and we have an ALP pool. ALP pool works as the counterparty to all traders in on-chain mode. When traders open a long position, ALP will automatically open a short position. 
  • When users hold ALP and stake, they can earn trading fee income and staking rewards. Currently the APY is around 40-50%. ALP price is affected by the pool’s trading PnL.
  • Incentive-wise, we do have trading rewards for on-chain mode. Traders will automatically earn APX tokens to offset their costs. We have a trading rewards program in its 5th Epoch, and up to $15k APX is distributed daily. It is up to $15k APX rewards because the amount is determined by the daily trading volume. 
  • If traders stake APX in DAO, they can also boost their trading rewards.

 

How does ApolloX Finance tackle common issues faced by decentralized exchanges, 

such as front-running, slippage, and limitations on available assets?

  • We have a special architecture for on-chain futures — dual oracle. We utilize price feeds from both Binance Oracle and Chainlink which will help avoid abnormal price behavior in the event of manipulation or lack of liquidity from the source platforms of either oracle. This mitigates the risk of unexpected liquidations on ApolloX.
  • With this system, we can provide more assets. Trading pairs also share liquidity via the ALP pool. Hence, it is not required to separately add liquidity for each newly listed trading pair. Capital efficiency is maximized and users can open bigger position sizes. This creates higher liquidity.

 

Just a follow up question. You have a more beneficial liquidity model because you don’t have to add an asset for a trading pair like GMX. In your case, you can add as many pairs as you want. 

  • Yes, for BTCUSD and ETHUSD trading pair for example, they share liquidity via the ALP pool. We do not need to separately add liquidity.
  • Users can deposit ALP pool assets into the pool, and the pool will provide liquidity for these pairs under on-chain futures. 

 

Are there any disadvantages to this model?

  • Because this liquidity pool provides liquidity for all pairs, there are many considerations.
  • For example, the major assets for ALP are still stablecoins and price is relatively stable. If we want to add more altcoins other than BTC and ETH, we need to consider the risks of adding more assets arising from the volatility in price as this would affect ALP token’s price.

 

ApolloX offers up to 200x leverage. What’s the idea behind offering such high leverage? How does this influence the pool if someone makes a huge profit or loss?

  • We do have up to 200x leverage, but not all trading pairs have the same maximum leverage.
  • When we decide on maximum leverage, we undergo a risk assessment by our risk team to see whether this trading pair is suitable. 
  • Also, having this leverage doesn’t mean we encourage our users to go high if they cannot take the risks.

 

You’ve explained about some incentives like trading rewards program. Is their impact enough so far or do you plan to add more? Anything on Arbitrum especially?

  • I’ve mentioned ongoing incentives, but we also plan to do campaigns and activities for users. Just last week, we started a new traders campaign.
  • We’ll continuously create campaigns and marketing activities for traders.
  • Our orderbook model supports Arbitrum already, but for on-chain mode, it is under development. So we’ll disclose more when we launch on Arbitrum.

 

You currently have two modes for futures trading. Do you plan to expand on this, maybe options, commodities etc.

  • For orderbook mode, we will focus on crypto pairs for now. For on-chain mode, we already have forex trading pairs. 
  • Other than these two modes, we plan to add a new degen mode for those that like high leverage. 
  • We also plan to add a referral program for on-chain mode to incentivize traders to invite their friends. They can earn attractive referral commission.
  • We do have plans to expand to other chains like Arbitrum. We are also designing and developing our cross-chain solution. We’ll see more in the short term future.

 

You’ve burned about 5,755,000,000 APX. What was the idea behind it? 

  • This was in April 2022 and we announced a huge token burn and the creation of ApolloX DAO to encourage decentralized governance of the platform.
  • When we were trying to create ApolloX DAO, we listened to our community a lot. At that time, we did receive community suggestions to lower the maximum supply of APX tokens. This was one factor.
  • With ApolloX DAO, ApolloX users will continue to help to decide and shape the future of the platform
  • Since then, ApolloX DAO has voted on 17 proposals, including important decisions like removing the 1% APX transaction burn tax. We are thankful to our community for participating.
  • Users can also lock their APX in ApolloX DAO to earn staking rewards! There is currently about 190M locked.

 

You’ve already given us a lot of insights about the future of ApolloX. What are some other plans on ApolloX’s future? 

  • We are not only a trading platform. We also have a DEX solution. 
  • On BNB Chain, if you guys noticed PancakeSwap launching perpetual markets, that is actually done by us. 
  • We provide a solution called ApolloX DEX Engine for those projects who have insufficient resources or focus but who want to launch a perpetual DEX. We can do so in less than a month. 
  • Currently, DEX Engine only supports orderbook perpetuals. But in future we’ll be adding on-chain DEX into DEX Engine. Projects who want to launch on-chain DEX can also use our solution.
  • Within the BNB Chain ecosystem, the leading spot DEXs who launched perpetual DEXs are using our solution. We are also trying to expand the DEX solution to other ecosystems, like Arbitrum and zkSync for example. We already have 1 partner from the Arbitrum ecosystem.

 

I would like to take a question from the audience. In light of the crypto market’s inherently volatile nature, how does ApolloX Finance deals with the sudden price movements that drastically affects yield generation and the execution of yield strategies?

  • For ALP yield, it is mainly related to two factors. The first is the trading volume on on-chain futures. A certain percentage of trading fees on on-chain mode will be injected into the ALP pool.
  • If there’s a volatile market, I believe trading volume will increase as people want to trade in these conditions. In this case, the volume and trading fee revenue will increase. And ALP price will increase.
  • Another factor affecting ALP yield is the token component. Currently, most of the pool is made up of stablecoins, BTC, ETH, BNB and some altcoins. The major percentage are still stablecoins. In this case, when there’s a volatile market condition, the ALP price will be relatively stable. 
  • These factors will help to maintain ALP yield and provide a relatively safe, but passive income for ALP holders and stakers. 
  • We tried to consider all situations when designing ALP. Though yield is a significant factor for the crypto market, the losses can be quite significant as well. So we want to make sure our traders are safe. 

 

What is your overall take on the future of crypto? When do you expect the next bull run?

  • Let me give a disclaimer first that what I’m going to say is purely from my own perspective, not from ApolloX’s perspective.
  • Personally, currently we do see some funds inflow into crypto. However, the funds are not significant. The whole macroeconomic environment is still in a weak stage. For this year, I do not see a huge recovery in terms of the trading market. But I have an expectation that for Q2-Q3 next year, we will see a recovery. 
  • There are some elements we should consider at this stage when TradFi institutions are trying to trade crypto. We know Blackrock and other funds that apply for crypto ETFs to the SEC. This is a signal that a lot of TradFi institutions are trying to enter this new area in a compliant way. If this happens, we will see a lot of funds inflow into crypto and I believe that will be the next bull market. The results of the application will be released in 6 months. Once approved, the BTC ETF will definitely be listed next year. I have a relatively positive expectation on this. 




This AMA recap has been edited for length and clarity. Listen to the full AMA here: https://twitter.com/Vaultkaofficial/status/1676228141570994176 



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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