Author: ApeX Protocol

Introduction to ApeX Protocol

ApeX Protocol is a decentralized multi-chain derivatives trading platform incubated by Davion Labs under Bybit. Davion Labs, as an incubator focused on the blockchain and cryptocurrency space, has been dedicated to discovering high-quality projects in the Web3 field. In addition, ApeX has received investments and support from many well-known investment institutions, including Dragonfly Capital, Mirana Ventures, Tiger Global, Jump Trading, Kronos, CyberX, and M77 Ventures.

ZK-based Multi-chain Order Book DEX

As a DEX, ApeX Pro provides a perpetual contract trading model based on an order book, achieving an efficient trading experience for users. At the same time, traders' assets are fully on-chain, and traders control their private keys. ApeX ensures the security of user assets through a non-custodial asset model. Additionally, relying on ZK Rollup for scalability and security, ApeX achieves off-chain and on-chain data consistency and complete verification, ensuring the security and privacy of user transactions, making it a complete multi-chain application product in the ZK space. Compared to similar products like dYdX and GMX, ApeX has added mechanisms such as mining rewards buyback and referral rewards, as well as offering more favorable trading fees, indicating significant growth potential.

APEX Token and Mining Token BANA

The APEX token is the governance token of the ApeX protocol, with a total supply of 1 billion. Of this, 23% of the tokens are allocated to the core team and early investors, while the remaining 77% is used for participation rewards in platform development, ecosystem building, and liquidity incentives. APEX holders have the right to participate in platform governance and share in the protocol's incentives.

BANA is the reward token for ApeX Pro, earned through trading mining (with a weekly mining cycle). During the trading mining activity, a total of 25 million APEX tokens are locked and minted into BANA, with a lock-up period of 12 months (during the lock-up period, BANA can be traded for USDC but cannot be exchanged for APEX). Currently, traders can choose to add BANA-USDC pool LP to increase trading mining rewards. After the mining ends this November, the platform will exchange BANA for APEX at the redeem rate after the buyback and destruction of BANA.

Introduction to APEX Token Staking

Stake tokens to directly participate in platform dividends

ApeX Pro recently launched the Staking feature, where 5% of the fees generated by ApeX Pro will be allocated to Staking participants (this will increase to 30% in the future). Users can stake APEX/esAPEX tokens to directly earn USDC. Current official data shows that the APR for staking in the first week reached as high as 40%.

Compared to similar products, dYdX has a market cap of $350 million, GMX has a market cap of $500 million, while APEX's market cap is currently only around $10 million. However, DYDX does not have a staking mechanism, and GMX allocates 30% of platform revenue to Staking participants. ApeX, through the token staking model, binds more project revenue to token holders.

Core value proposition of the ApeX staking plan:

• No restrictions. Users can start and cancel staking at any time. Of course, the longer the staking time, the greater the returns, allowing each ApeX player to plan and customize their investment strategy based on their preferences on ApeX Pro.

• Suitable for all types of traders. Simply staking esAPEX and/or APEX tokens can earn rewards.
• Staking rewards not only consider the staked assets, but users' trading activities will also increase their earnings. The staking reward formula takes into account the "t2e" activity score, bringing additional earnings to staked users.

According to its design principles, the APEX staking reward calculation formula can be broken down into three parts:

Staking Amount

The amount of APEX or esAPEX that users stake is the parameter with the greatest weight in calculating staking rewards and is also part of the cost of participating in staking activities.

Staking Duration

This part is simply understood as the cumulative staking duration (in days) divided by 365, which is the user's staking time score. It continuously accumulates as the staking time increases, reaching a maximum value of 2 after two years of staking.

Trading Score

The average T2E Score obtained by the user in the last four mining cycles is the Average T2E Score. Therefore, the higher the T2E score, the higher this part of the staking score. It is worth noting that once the average mining score exceeds 500, the trading score factor triggers a cap of 2, no longer affecting staking rewards.

When calculating the total staking factor, the three parts are summed:

Since the staking duration can only be obtained through time accumulation, staking users who want to improve their yield (to obtain a larger share of staking rewards) can increase their trading score to gain more earnings.

For example, a staking user in the image below raised their average t2e score to 500 (fixed), thus increasing their staking yield by 200%. The staking pool APR is 40% (current reward amount / total value of staked APEX and esAPEX * 52), but their personal APR is 120%, demonstrating the effect of increasing the t2e score.

User Staking APEX Yield Data

User Staking APEX Score Data

In-depth Analysis of APEX Token Staking

Currently, the total number of APEX and esAPEX staked is 4.3 million, valued at $1.29 million, representing the initial stage of the Staking plan. Compared to existing Staking plans in the market, participants can enjoy rewards from staked tokens, while ApeX's unique calculation method linking staking rewards to trading mining performance creates a flywheel effect, allowing participants to gain additional benefits:

Trading Costs Close to Zero

According to existing data, users participating in ApeX Pro's trading mining can receive a minimum of 45% rewards from trading fees, which can be seen as a trading rebate. The common trading rebate rate in the market is around 40%, while in ApeX Pro, it can be returned at a minimum of 45%.

If a small amount of LP is formed when the BANA price is low, with an investment of about $200, the mining reward can account for up to 70% of trading fees, which is a rare rebate rate in the market, significantly reducing trading costs.

The launch of the Staking plan allows users to earn trading rewards while also receiving additional staking rewards, making the total rewards nearly cover their trading costs. Currently, no derivatives platform in the entire cryptocurrency market allows all users' total trading costs to approach zero, and derivatives trading users are extremely sensitive to trading costs, further enhancing ApeX Pro's appeal to contract traders.

USDC Rewards Are More Stable

Staking rewards for various tokens are usually either the same type of staked token or a separately issued reward token, which often has price instability or the common issue of being passively locked for the medium to long term. Additionally, the release of staking rewards may put extra selling pressure on the native token, leading to a decline in token prices and a continuous decrease in APR, causing the value of staked tokens to drop, users to leave, and tokens to be sold, forming a "negative cycle" of price.

To avoid the common issues present in current market Staking plans, the ApeX ecosystem distributes rewards in the form of USDC, which is the most reputable stablecoin in the cryptocurrency market. Participants do not need to worry about staking rewards fluctuating with token prices, thus avoiding the risk of the staking plan causing token prices to fall into a "negative spiral."

APEX Lock-up Effect

The current circulation of APEX tokens is 70 million, with 4.3 million already locked in the Staking plan, resulting in a lock-up rate of 6.15%. Compared to the market average of around 15-25%, this level is relatively low, mainly because the Staking plan has just begun, so there is significant room for growth in this ratio.

Currently, the price of APEX tokens is $0.31. If the aforementioned staking rate increases to 15%, there will be 6.3 million circulating APEX (currently valued at $1.89 million) locked into the staking plan. Combined with the trading data of APEX on Bybit over the past month, this will likely drive the price up to above $0.6 (typically, the market order book's sell orders * 10 is the actual expenditure for buyers to push the price to a certain level).

Thus, the Staking plan not only has a lock-up effect on the circulation of APEX but also significantly promotes the price of APEX tokens as the plan progresses.

Flywheel Effect Highlighted

As mentioned earlier, the connection between the staking plan and trading mining stems from a design detail of trading mining: after the 52nd week of trading mining, BANA can be exchanged for APEX at the end-of-term redeem rate (since BANA will be bought back and destroyed, the redeem rate will be greater than the initial 0.001, currently at 0.00105), regardless of the price of APEX at that time. Therefore, trading mining participants have a "real" reference for mining earnings:

• When the BANA price is lower than APEX price * redeem rate, choose to hold BANA, waiting for the price to re-link before selling or waiting for the redemption window;
• When the BANA price is higher than APEX price * redeem rate, directly sell APEX for excess profits;

Thus, the price of APEX tokens is the foundational value of the entire ApeX ecosystem, and the launch of the Staking plan creates a "flywheel effect" for the entire ecosystem.

Illustration of the ApeX Ecosystem Flywheel Effect

The rise in APEX prices increases the value of BANA, which in turn raises the trading mining rewards. As trading mining rewards increase, the yield for mining participants will attract new users to join the trading mining activities, subsequently increasing the fee income of the ApeX Pro platform. The platform's 5% of fees will be distributed to Staking participants, and the APR for Staking rewards will also increase, attracting more users to join the Staking plan, leading to a continuous decrease in the circulating APEX. At the same time, the buying behavior of Staking participants further pushes up the price of APEX tokens, completing a full cycle of the ecosystem flywheel.

In summary, ApeX's Staking plan not only adopts the advantages of existing staking plans in the market but also makes significant innovations based on its focus on derivatives trading, activating the entire ecosystem's value effect with what seems to be an independent Staking plan. With the support of the flywheel effect, the investment value of the ApeX ecosystem is further highlighted.