APEX and BitDAO Proposal
This proposal is authored by Mariam and Lo@n of the ApeX Team.
Background
ApeX Protocol is a multichain decentralized derivatives protocol, designed to address flaws in existing decentralized exchanges (DEXs) such as high gas fees and poor order execution, and is dedicated to realizing the Web 3.0 vision — shaping a free and open ecosystem for all users to grow their wealth in a safe and trusted environment, where they can participate within an interconnected community. The core team truly believes in the rights that all participants building the global economy have, to manage, protect, and leverage their wealth fairly, transparently, and accessibly and is anchored to create a decentralized trading network to help both traditional and crypto asset investors take back control of the way they handle their investments, trade data, and capital appreciation.
The protocol is incubated and supported by Davion Labs (a crypto impact incubator founded by Bybit) and backed by prominent global investors such as Dragonfly Capital, Jump Trading, Kronos, M77 Ventures, Mirana Ventures, Tiger Global, Cobo, and CyberX.
Earlier this year, ApeX Protocol launched on Arbitrum with ApeX eAMM product - a decentralized trading platform that facilitates the creation of perpetual contracts for any token pair. With ApeX eAMM, users can trade crypto derivatives directly on the Ethereum blockchain without any intermediaries. The protocol offers unlimited flexibility as users can create markets on any underlying asset while maintaining control of their private keys.
ApeX Protocol’s newest product offering, ApeX Pro is a permissionless and non-custodial DEX, powered by StarkWare’s Layer 2 scalability engine StarkEx, that operates on an orderbook model delivering cross-margined perpetual contracts to its community under a new framework. It is primed to deliver limitless access to the perpetual swaps market, as it remains committed to the promises of not just speed and efficiency, but also security with transparency on traders’ preferred derivatives trading assets. ApeX Pro allows traders to engage in improved trading experience through:
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High Performance: Integration of StarkWare’s Layer 2 scalability engine StarkEx to provide higher liquidity and lower costs for trades. Best trade-off between performance + decentralization.
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Multi-Chain Support: Open to tokens from the Ethereum network and also EVM-compatible chains; cross-chain deposits and withdrawals are supported on ApeX Pro.
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Lower Fees & Greater Leverage With Instant Settlement: Amplified earnings are now possible as trades can be executed immediately with leverage, at the lowest costs with lesser starting capital
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Maximum Security & Preserving Privacy: On-chain data availability and integrity can be ensured with StarkWare’s Layer 2 scalability engine and Validium
ApeX Pro brings traders the security, efficiency, and usability of centralized exchanges, fortified with the transparency, self-custody and privacy of decentralized platforms.
Current Status
Following two (2) months of beta testing, ApeX Protocol is officially launching ApeX Pro on mainnet on Nov. 21, 2022 along with its year-long Trade-to-Earn program, which allows participants to enjoy weekly trading rewards while they carry on their regular trading activities. More on Trade-to-Earn event here.
Proposal
Current Deal
ApeX Protocol proposes the following terms:
- Token swap of $2M USDC for 11M $APEX governance tokens
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BitDAO will commit not to sell the $APEX tokens for 2 years;
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The USDC may be used immediately for $APEX liquidity or Trade-to-Earn programme;
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Additionally, should any extenuating circumstances arise, BitDAO retains the rights to undo the token swap within 2 years timeframe (pending BitDAO proposal).
| BitDAO Swaps | Apex Swaps | ||
|---|---|---|---|
| $USDC | $APEX | ||
| Swap Units | 2,000,000 | 11,000,000 | |
| Current Price | $1.00 | $0.30 | |
| TWAP Price | $0.40 | Discount | |
| Current Value | $2,000,000 | $3,300,000 | 39% |
| TWAP Value | $2,000,000 | $4,433,000 | 55% |
| Lockup | None | 2 year hold |
Note: The TWAP price (2022/11/02-2022/11/15) of $APEX on Coingecko is 0.4028
- Commitment from ApeX Protocol to prioritize the ApeX Pro deployment on the upcoming BitDAO Infrastructure Project (BitNetwork).
Future Cooperations
As part of future cooperations, ApeX Protocol intends to explore greater cooperation with BitDAO through:
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Undertaking additional token swaps; and/or
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Creating additional use cases for $BIT in the ApeX ecosystem; and/or
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Adopting $BIT as the native token (similar to the spirit of the BitDAO Infra Project), if cooperation between the protocols becomes extremely synergistic.
Analysis and Commentary
Benefits to BitDAO
The proposed cooperation is set to bring BitDAO community an array of benefits, including but not limited to:
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Receiving a significant, special discounted price to $APEX governance token’s market value.
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Increasing an active user base of BitNetwork once the protocol gets deployed on it, given a large total addressable market size of a derivatives DEX market.
The proposed structure represents a low risk initiative model to BitDAO ecosystem that commences with a small initial deal, but holds great potential, bringing greater cooperation opportunities and multiplied perks to both parties in the future.
On top of the above, in line with the existing partnership, BitDAO demonstrates its strong support towards DeFi and decentralized applications (dApps), including derivatives DEXes.
Market and Category Analysis
Due to current market dynamics, there has been an increased interest for on-chain financial products. Decentralized Exchanges (DEXes) represent the cornerstone of Decentralized Finance (DeFi), where users deposits are fully verifiable, and participants have full custody of their assets.
Running without the need for an intermediary to facilitate the transfer and custody of funds, DEXes represent permissionless, non-custodial trading ecosystem which substitute intermediaries with blockchain-based smart contracts and facilitate the exchange and flow of capital.
Current leaders in the DEX derivatives space are GMX and dYdX with their token market caps as follows:
| DEX | Price | Circ Supply | Total Supply | Circ Mcap | Total Supply Mcap |
|---|---|---|---|---|---|
| APEX | $0.29 | 24,109,166 | 1,000,000,000 | $6,991,658 | $290,000,000 |
| GMX | $39.84 | 8,215,288 | 13,250,000 | $327,297,074 | $527,880,000 |
| dYdX | $2.19 | 135,503,280 | 1,000,000,000 | $296,752,183 | $2,190,000,000 |
| Note: based on CoinGecko Analytics as of 22/11/14 |
Competitive Analysis
ApeX Pro
ApeX Pro is a permissionless, non-custodial trading platform that delivers cross-margined perpetual contracts under a new trading framework. It is primed to deliver limitless access to the perpetual swaps market with its order book model, as it remains committed to the promises of not just speed and efficiency, but also security with transparency on traders’ assets.
With the integration of StarkWare’s Layer 2 scalability engine StarkEx and Validium, ApeX Pro offers cross-margined perpetual contracts with multi-chain support, low fees, deep liquidity and maximum security.
GMX
GMX is a decentralized spot and perpetual exchange that supports low swap fees and zero price impact trades. Trading on GMX is supported by a unique multi-asset pool that earns liquidity providers fees from market making, swap fees and leverage trading.
In the existing market conditions, AMM infrastructures are unlikely to provide stronger price execution as opposed to the order book model.
dYdX
dYdX is a first decentralized exchange that runs on Starkware’s layer 2 scalability engine StarkEx. It provides fast, zero cost transactions for placing bids on an orderbook and enables leveraged trading on Bitcoin, Ethereum and various altcoins with 10-20x leverage. Recently, the dYdX team has announced moving to Cosmos-based blockchain for its v4 to better optimize decentralization and the platform trading flow.
ApeX Tokenomics
Price and Total Supply
As of 22/11/17, $APEX token is trading at ~$0.31 with 24M circulating supply and 1B token total supply.
Utility
$APEX is the native token of ApeX Protocol and serves the following utilities:
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Governance: Token holders can submit and vote on protocol governance proposals
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Protocol Incentivization: Users can earn $APEX tokens through participation rewards and liquidity mining on the ApeX protocol
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Staking: Users can stake $APEX tokens to earn more rewards in APEX and share protocol fees.
A maximum supply of 1 billion $APEX tokens is available. Of this amount, 23% is allocated to the core team and early investors with a one-year cliff starting from the token generation event, followed by a two-year linear vesting period. The remaining 77% goes to the wider ApeX DAO and will largely be used for participation rewards, ecosystem building, and liquidity bootstrapping.
Currently available for trading on crypto exchange Bybit and DeFi protocol Uniswap.
Distribution and Vesting Schedules
Note: the distribution table demonstrated above represents the current plan and is subject to change. ApeX core team will inform the BitDAO community of any changes regarding the token distribution and vesting schedule updates and will seek their feedback.
As the protocol is still in bootstrapping phase, prior to establishing and fully transitioning to a DAO, the core team reserves the rights to make any relevant modifications or alterations with existing tokenomics structure and parameters, especially if driven by deeper cooperation with BitDAO.
Historical Token Activities
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Private token sale with the allocation of 8% of total token supply.
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Token generation event on Bybit Launchpad with the allocation of 1% of total token supply.
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Beta trade and liquidity mining on ApeX eAMM.
ApeX Pro Trade-to-Earn Program
Trade-to-Earn is a recurring year-long trading event split into weekly epochs where traders on ApeX Pro earn easy rewards — distributed in the new $BANA token.
About $BANA
$BANA is ApeX Pro’s reward token distributed via weekly Trade-to-Earn events, minted with a total of 25,000,000 $APEX that is locked over a minimum period of 12 months.
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Available once mainnet launches and ApeX Pro’s Trade-to-Earn event begins
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Allocated based on a combination of fees, open interests and the $BANA-USDC LP Token balance during a single period
$BANA becomes valuable reward for traders as the program participants can either hold more $BANA to multiply their $BANA earnings, sell $BANA back to BBP or convert $BANA back to $APEX pro-rata after a certain period of time. As a $BANA holder a trader can:
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Swap $BANA for USDC via the $BANA-USDC pool at any time.
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Add $BANA to the $BANA-USDC Pool and receive LP Tokens (the more LP tokens one holds, the more $BANA one can accumulate).
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Hold $BANA until the T2E concludes and redeem $APEX pro-rata (the more $BANA is burnt, the higher the redeem rate is).
Followup Activities
In order to better educate the wider BitDAO ecosystem about ApeX Protocol and explain the details of ApeX’s proposal, there will be a series of events undertaken by both parties that includes but is not limited to:
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AMA with BitDAO community about ApeX Protocol and proposed token swap deal;
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Twitter Space fireside chat with BitDAO in the format of “ApeX DEX Talks” discussing DEX trading and ApeX’s Trade-to-Earn program in further details.
This proposal is up for a vote on the BitDAO Snapshot Space