DeFi
Bybit Learn
Bybit Learn
Intermediate
Apr 19, 2022

ApeX Protocol (APEX): Revolutionizing DEXs with an Elastic AMM Model

Familiar with decentralized exchanges (DEXs) like PancakeSwap and Uniswap? While they're widely used and trusted by most members in the DeFi community, these DEXs can suffer from high gas fees and poor order execution. This is because these automated market makers (AMM) lack interoperability and fail to leverage data among one another. The end result is impermanent loss – an unavoidable problem in the AMM scene.

Fortunately, ambitious projects like ApeX Protocol evolve upon existing liquidity models by adding the aspect of elasticity. This Elastic Automated Market Maker (eAMM) approach offers a whole new trading experience as capital efficiency is significantly improved and each transaction feels like a spot trade. Keen on finding out more about ApeX Protocol and the $APEX tokens that are native to it? Read on as we cover the ins-and-outs of ApeX Protocol and why it stands out from other up and coming decentralized trading platforms. We’ll also run through how $APEX tokens present a solid opportunity for speculative investors to get in early on the potential of ApeX Protocol.

What Is ApeX Protocol?

ApeX Protocol is a decentralized and noncustodial derivatives protocol that facilitates the creation of perpetual swap markets for any token pair. Users can trade crypto derivatives directly on the Ethereum blockchain without any intermediaries while enjoying unlimited flexibility. This is because users can create markets on any underlying asset while maintaining control of their private keys.

ApeX protocol is a project incubated by Davion Labs. Since launching on the Arbitrum mainnet on February 28, 2022, ApeX Protocol has garnered a huge amount of attention. With the overarching goal of making financial instruments like perpetual contracts more transparent to the average investor, ApeX Protocol addresses the noticeable gap in the crypto derivatives market. It’s no wonder big names like Dragonfly Capital Partners and Tiger Global have entered during the seed round funding and are backing this DeFi project.

With ApeX Protocol, users can do the following:

  • Trade any Web 3.0, DeFi, Meme or GameFi tokens on the derivatives market with 10X leverage.
  • Create liquidity pools and add liquidity to any pairs.
  • Purchase $APEX token with decent price via Bond program and stake to earn a high APR.
  • Stake to earn $APEX government token and transaction fee rewards.
  • Trade NFTs & join ApeX NFT games.

As previously mentioned, ApeX Protocol stands out because of its unique approach to AMMs. Much like other AMMs, ApeX Protocol relies on the Constant Product Formula for price discovery. The elastic aspect comes from its various on-chain algorithms that are used to moderate the supply of liquidity according to market conditions. Through a series of rebasing mechanisms and funding fee differences, ApeX Protocol achieves a dynamic price peg that’s similar to what you’ll see in algorithmic stablecoins. For a more comprehensive deep-dive on the topic of price pegging and anchoring, check out the official ApeX Protocol Gitbook.

On top of this eAMM model, ApeX Protocol also utilizes a Protocol Controlled Value (PCV) model instead of the usual Total Value Locked (TVL) model you’ll spot among popular DeFI exchanges. While TVL-based DeFi protocols attract enormous amounts of liquidity because of the lucrative token distribution rewards and high yields, this is unsustainable in the long run. As the yields normalize over time, liquidity decreases as yield farmers withdraw their funds and seek the next high yield option. The PCV model resolves this by ensuring all locked assets in smart contracts are owned by the protocol and not redeemable by users. In doing so, perpetual contract liquidity is retained as liquidity providers are unable to remove liquidity en masse.

What Are $APEX Tokens?

$APEX is the native token of ApeX Protocol and gives users the ability to determine the future of ApeX protocol while enjoying various benefits. The utility of APEX tokens include:

  • Governance Influence: Long-term $APEX token holders are entitled to suggest and vote on future governance proposals that decide the future direction of ApeX Protocol.

  • Protocol Incentivization: $APEX tokens are given out as rewards as users participate, add liquidity to pools, trade actively and refer like-minded DeFi enthusiasts under the ApeX referral program.

  • Staking: Users can stake $APEX tokens to earn rewards in $APEX tokens.

APEX Tokenomics

All in all, there’s a maximum supply of one billion APEX tokens available. Of this amount, 23% are 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% will be allocated to the DAO and will largely be used for participation rewards, ecosystem fostering and liquidity bootstrapping. From this allocation, we can imply that the team is focused on exponential growth for ApeX Protocol as the APEX tokens help in getting more users onboard the platform.

Eager $APEX token investors can check out the Bybit Launchpool, where up to ten million APEX tokens can be earned through staking BitDAO (BIT) tokens or taking part in the APEX token lottery with USDT after signing up on Bybit.

Are $APEX Tokens a Good Investment?

By serving the niche of leveraged derivatives and doing so with a foolproof set of features that ensure proper price anchoring, ApeX Protocol and $APEX tokens have the potential to change the way investors perceive AMMs and the risks associated with using them. This is even more likely considering how ApeX Protocol is backed by a sizable number of credible investors and the plans in store for the platform.

These plans include fully fleshing out the staking features and bonding program in place so users have more ways to interact with ApeX Protocol and invest their money. This incentivizes users to use ApeX Protocol and enjoy the loyalty rewards and tiered fee structure perks that come with holding onto their $APEX tokens. 

Additionally, ApeX Protocol is also working on multi-chain deployment. This will help the interoperability aspect and greatly boosts communication between blockchains so interactions will be swifter and transactions can process faster.

Lastly, $APEX token investors will also want to keep an eye out for ApeX Predator NFTs. These 4,560 unique NFTs with special attributes sold out within three days of launching on March 8, 2022 and hold plenty of potential as ApeX Protocol ramps up its features. The perks of obtaining one includes access to the upcoming ApeX NFT Games, a lifetime 8% transaction fee discount and much more.

The Bottom Line

ApeX Protocol’s focus on being fully permissionless, providing liquidity in perpetuity and offering full-spectrum asset support ultimately makes it a gleaming prospect in the DeFi space. This is doubly so if you’re bullish on the future of AMMs and how they’re set to replace traditional trading platforms. With plenty of plans in the pipeline, ApeX Protocol’s vision of financial inclusion and accessible crypto derivative trading might be realized sooner than you think with each goal that the innovative team achieves.