APEX Stands Out As One Of The Hottest DeFi Tokens To Watch
APEX, the native token of the perpetual trading-focused decentralized exchange platform ApeX Pro, is well-positioned to amass significant gains in the next 12 to 18 months.
Sparked by the bullish sentiment around Bitcoin, the so-called “Alts” market looks poised to embark on a strong bull run of its own throughout the remainder of this year, and possibly well into the next, and APEX could be one of its biggest movers.
There are several solid reasons to be optimistic about APEX, with one of the obvious ones being its current low market capitalization, which sits at just $183.6 million according to CoinMarketCap. That’s some way behind the market caps of APEX’s biggest DEX rivals. For instance, UNI, the native token of Uniswap, boasts an $8.62 billion market cap, while Pancakeswap’s CAKE stands at $1.04 billion, and dYdX’s DYDX currently sits at $1.9 billion.
DYDX itself was the subject of a recent study by the respected crypto hedge fund Pantera Capital and is forecast to triple its market cap and hit a value of over $10 billion in the next year.
Given that ApeX Pro is a very close competitor to dYdX in the decentralized perpetual trading market, and that APEX boasts many of the same fundamentals that make DYDX such an attractive token, it’s reasonable to assume that it also has the potential to generate similar traction. Many analysts believe the same, with CoinCodex projecting a very bullish outlook for APEX.
What is ApeX Pro?
Let’s start with the basics. ApeX Pro is a noncustodial trading platform for permissionless, cross-margined perpetual contracts that will eventually integrate a novel social trading framework. It’s designed to deliver unlimited access to the perpetual swap market using an order book model, and built on an architecture that ensures high-speed, efficient swaps, strong security, and utmost transparency on every trade.
According to its Litepaper, Apex Pro leverages StarkWare’s Layer 2 scalability engine, StarkEx, to ensure rapid trading performance and a streamlined user experience. One of its main goals is to foster a social trading framework that benefits both pro and novice traders alike, providing an additional passive income stream for successful traders while enabling those with less experience to follow and learn from their behavior.
When it integrates social trading, which is expected to arrive sometime this year, ApeX Pro says it will provide an accelerated trading performance with deeper liquidity, preserving the privacy and security that only exists in decentralized environments.
The platform integrates with popular crypto wallets including MetaMask, Trust Wallet, Wallet Connect, Bybit and OKX and it also supports popular blockchains such as Ethereum, Avalanched, Binance Smart Chain and Optimism, as well as Ethereum Layer-2s such as Arbitrum and Polygon. This extensive support means users can deposit funds via their favorite wallet from any supported chain.
ApeX Pro is unique among perpetual DEX platforms for its use of a Soulbound Token or SBT to drive social trading. Known as ApeSoul, ApeX’s SBT is used to determine the status of traders using its platform. Traditionally in copy trading, platforms like to highlight their most seasoned and profitable traders to less experienced individuals and make it possible to observe and copy these experts. Because ApeX Pro doesn’t do KYC checks, it uses SBTs as a way to verify its traders’ performance.
The SBT, which is a non-transferable NFT, will keep track of the trading records of each anonymous trader using its platform. Because it’s non-transferable, the user cannot sell their SBT, although the platform issuer can revoke it. Users can simply check the ApeSoul SBT to verify the performance of each trader, and this guarantees the integrity of ApeX Pro’s social trading model.
Reasons To Be Bullish On APEX
DEX Market Traction
The growth of DEX platforms as safer and more trustworthy trading venues compared to highly centralized CEX platforms has been accelerating ever since late 2022. It was back then that FTX, formerly the crypto world’s second-biggest exchange by trading volume, went from hero to zero in a matter of days, with billions of dollars worth of user’s funds disappearing into a black hole.
That, combined with similar events earlier in the year, caused trust in CEXs to hit a low point, and many crypto investors responded by ditching them in favor of DEXs. Trading volumes of DEX platforms rapidly spiked as users headed for safer venues. The single biggest advantage of any DEX platform is it allows users to retain full control over their funds, so even if the platform disappears, their assets will be safe.
There remains a significant gap between CEXs and DEXs in terms of market share. According to The Block, DEXs accounted for 7.1% of all spot trading volume in February 2024, up from just 0.16% in February 2020. Most experts believe this trend will continue to gather momentum.
Potential In Perpetuals
Meanwhile, the perpetuals trading market is also growing rapidly, which bodes well for ApeX Pro. Also known as the futures market, perpetuals enable higher capital efficiency for traders due to access to leverage. Pantera Capital points out that perpetual DEXs account for just 3% of CEX trading volumes, which suggests enormous growth potential.
In addition, institutional investors are the most active crypto perpetuals traders, accounting for something like 80% of all trading volume. That too, bodes well, as institutional interest in crypto is rising dramatically in the wake of the U.S. SEC’s decision to approve spot Bitcoin ETFs, which is one of the primary factors driving the current bullish market sentiment.
APEX Analysis
dYdX is currently ranked as the top perpetuals DEX platform according to Coingecko, yet ApeX Pro is one of its closest competitors. At the time of writing, dYdX had a 24-hour open market interest of $486 million and a 24-hour trading volume of $864.2 million, but Apex Pro is not that far behind, with numbers of $103.4 million and $416.9 million, respectively, showing that it’s a viable alternative for traders.
ApeX Pro’s social trading framework will help to set it apart from dYdX, and with the growing interest in perpetuals trading, it seems safe to assume that newer traders especially, will find that aspect of its platform more appealing, giving it a significant boost once it launches. What’s more, the tokenomics behind ApeX Pro’s and dYdX’s tokens are somewhat similar, with both having a maximum supply capped at a billion. APEX’s current circulating supply stands at just 850 million, but it will reduce to just 500 million by the end of the year. That will bring it into line with DYDX, which currently has a circulating supply of 464.6 million. When we consider that APEX’s price stood at $3.34 at the time of writing, versus DYDX at $4.10, the reduction in circulating supply could become a substantial price driver if demand increases.
Another good sign is APEX’s performance over the last year compared to that of DYDX. APEX has gained a staggering 976.45% in the last 12 months, compared to a gain of just 71.19% for DYDX. While some might conclude that this means DYDX has more room for growth, the tokenomics and market caps don’t really point to such a conclusion. Rather, we should remember that ApeX Pro has emerged from nowhere since its launch in 2021, gaining considerably more traction than dYdX, which launched back in 2019.
Token Value
Pantera Capital justifies its bullish forecast for DYDX by explaining that until recently, it lacked much utility, with no fee-sharing mechanism, meaning token holders could not use the asset to earn a passive income through staking.
That changed with the launch of dYdX v4, which brought the platform into line with most other DEXs by distributing protocol fees to token holders. Previously, revenue from protocol fees went to a company called dYdX Trading, which operates parts of the dYdX platform. With dYdX v4, those fees are now distributed to users who stake DYDX tokens.
Utility is important for investors because tokens are scrutinized carefully for their potential value accrual. Many crypto investors see tokens as a way of gaining exposure to high-growth companies that pay out a big dividend, and that is exactly what ApeX Pro provides with the ApeX Pro Staking Program.
By staking APEX tokens, platform users can partake in revenue sharing, earning yield each week in the shape of USDC. To participate, users simply stake their APEX or derivative esAPEX tokens in designated pools, which enables them to earn a share of the platform’s revenue derived from trading fees. Uniquely, ApeX Pro allows users to optimize their staking yield through various incentives, with higher rewards paid depending on the amount of APEX staked, the duration and timing of the stake, plus their overall trading activity on ApeX Pro. Those who execute a higher number of traders per epoch can significantly amplify their USDC earnings from staking. ApeX Pro users will receive one esAPEX token for each APEX token they stake, which can be restaked to earn yet more rewards.
Ensuring Long-Term Sustainability
One factor holding back APEX until recently may have been the upcoming unlock of APEX tokens that were allocated to early investors and the core team at the time of its token generation event in April 2022. The unlock was originally scheduled for April 2023, but the community voted to delay it by one year due to the poor market conditions at that time.
The APEX community is now approaching the revised unlock date of April 2024 and the team behind the protocol is taking steps to ensure the stability of APEX through a new proposal.
In its proposal for a sustainable token unlock, ApeX’s team has designed a strategic approach that will see it implement a Bonding Curve Locking and Sales Pool, or esAPEX12 pool on the Mantle Network. Under this proposal, all of the APEX tokens released to core team members and investors will simultaneously be invested and locked into the new pool, where they will generate esAPEX12 tokens that can be sold via the same pool.
It’s a complex strategy that’s designed to prevent unwelcome price pressure. Typically, when projects unlock their tokens for early investors and team members, the sudden increase in supply results in many more being dumped onto the market, with an inevitable negative price impact that’s in nobody’s interests. ApeX Pro aims to prevent this by incentivizing investors and team members to continue holding.
The APEX tokens unlocked as per the release schedule will be locked in the new pool for a mandatory 12-month period, and users will instead receive esAPEX12 LP tokens based that represent these tokens, together with their rights to earn income generated by the esAPEX12 pool. Third parties will be able to purchase locked esAPEX12 at a fixed price, namely 60% of the three-day moving average of the APEX token spot price, while team members and investors will be able to claim harvested USDT from the tool, based on their proportion of LP tokens. The monthly availability of esAPEX12 for sale will not exceed the planned unlock quota, to ensure supply stability. Finally, esAPEX12 holders will receive their promised APEX tokens one year later, via a dedicated dApp.
The proposal, which is subject to approval from all investors, is designed to balance APEX liquidity and price stability while ensuring investors are still rewarded for their early backing of the project.
Caution Is Advised
With ApeX Pro taking solid steps to protect the value and stability of the APEX token, combined with the solid market fundamentals and tokenomics structure, and the overall bullish nature of crypto in general, it looks like one of the most promising DeFi token investments. The ApeX Pro platform has been growing fast and is emerging as a viable alternative to more established DEXs and CEXs. Its potential is further elevated due to the rising popularity of perpetuals and increased knowledge of the risks apparent with any custodial exchange platform.
As always, there are risks associated with investing in APEX, just as there are with any digital asset. Some of the biggest risks include the possibility of regulatory crackdowns on DEX platforms that could have a negative impact on APEX’s price. Also, if the wider crypto market experiences a downturn, the bearish outlook would surely affect APEX. Other risks include slower than forecast growth in DEX and perpetual market trading volumes, as well as competition from rival platforms.
Crypto market analysis will always be a guessing game, but investors can do their research to make an educated assessment about where the market is headed. For now, at least, the prospects for the broader crypto industry are very bullish indeed. Within the industry, APEX stands out as a token built on a fast-growing platform with solid foundations, with good utility and a smart team leading the way.