[APX Finance] LTIPP Application - FINAL

Application Template

SECTION 1: APPLICANT INFORMATION

Provide personal or organizational details, including applicant name, contact information, and any associated organization. This information ensures proper identification and communication throughout the grant process.

Applicant Name: MZ

Project Name: APX Finance

Project Description:

APX Finance (formerly ApolloX Finance) is a perpetual decentralized exchange (DEX). APX version 2 (V2) offers trading of perpetual futures with up to 1001x leverage and liquidity is provided by the ALP pool. LPs can earn yield by minting ALP.

Team Members and Roles:

MZ – CEO; Provides strategic direction and develops high-quality business strategies to scale APX Finance

Katherine – Growth Lead; Leads multi-platform initiatives to advance APX’s branding

Venus - Operations Lead; Manages day-to-day running of the platform

Saturn - Product Lead; Builds and innovates APX’s products

Neptune - Tech Lead; Designs, builds and maintains APX’s systems and trading architecture

Project Links:

Website: https://www.apollox.finance/en/futures/v2/BTCUSD

Twitter: https://twitter.com/APX_Finance

Telegram: Telegram: Contact @apolloxchange

Gitbook: https://apollox-finance.gitbook.io/apollox-finance/

Github: https://github.com/apollox-finance

Dune: https://dune.com/apollox

Contact Information

Point of Contact (note: this should be an individual’s name, not the name of the protocol):

mz_apx

Point of Contact’s TG handle:

Twitter:

https://twitter.com/MZ_APX

Email:

marketing@apollox.com

Do you acknowledge that your team will be subject to a KYC requirement?:

Yes

SECTION 2a: Team and Product Information

Provide details on your team’s past and current experience. Any details relating to past projects, recent achievements and any past experience utilizing incentives. Additionally, please provide further details on the state of your product, audience segments, and how you expect incentives to impact the product’s long-term growth and sustainability.

Team experience (Any relevant experience that may be useful in evaluating ability to ship, or execution with grant incentives. Please provide references knowledgeable about past work, where relevant. If you wish to do so privately, indicate that. [Optional, but recommended]):

MZ: MZ has worn many hats since entering the crypto space in 2016. He was a developer, angel investor and builder of multiple DeFi and GameFi protocols before joining APX.

Katherine: Katherine worked in business marketing across different industries for over 6 years. Prior to joining APX, Katherine also worked for one of the top crypto exchanges.

Venus: Venus has over 5 years of experience in crypto, including a stint at crypto exchange MEXC Global.

Saturn: Previously a quant trader for derivatives at one of the largest hedge funds for many years.

Neptune: An ex-Binance blockchain architect, Neptune draws from extensive experience as a full stack developer and entrepreneurial experience in the design and development of Bitcoin mining chips and mining machines.

What novelty or innovation does your product bring to Arbitrum?

High-leverage trading: APX Finance offers Arbitrum traders perpetual contracts with up to 1001x leverage. Trading pairs BTCUSD and ETHUSD can be traded with 1x to 250x, 500x, 750x or up to 1001x leverage. Other trading pairs have a maximum leverage of 20x, 50x or 75x.

Dynamic Fee Structure: APX Finance employs a dynamic fee structure for high-leverage trading pairs to help traders maximise profits. For BTCUSD and ETHUSD with 500x, 750x or 1001x trading leverage, APX offers 0 slippage, 0 open position fee and a dynamic PnL close position fee. Formula:

where:

  • Pnl is the profit or loss on the position
  • shareRate is the percentage of the notional that is paid in fees (15% as default)
  • Notional is the amount of money that is used to open the position
  • closeMinRate is the minimum closing fee rate, which is the lowest amount that you can pay to close a position (0.03%)

For example, a trader closes a position with a profit of $100, a share rate of 15%, and a notional of $600, then the closing fee rate would be:

Closing fee rate = Max(100 * 15% / 600, 0.03%) = 0.03%

Enhanced risk management for LPs: The ALP liquidity pool is the backbone of APX v2 on-chain perpetual trading. It is designed to balance open interest (OI) in markets and minimise ALP’s risk from holding positions.

ALP utilizes a funding fee model and only holds net positions. When there is more long OI than short OI, longs pay funding fees to both LPs and shorts or vice versa. If long OI and short OI are more balanced, ALP undertakes a smaller amount of positions and risk exposure is lower. As the counterparty of traders, ALP always receives funding fees.

ALP consists of a pool of stablecoins and blue-chip crypto. Having the pool in majority stablecoins also prevents excessive loss during volatile markets.

Algorithm-based contracts (MAD series): The MAD perpetual contract series are high volatility indexes based on an underlying crypto asset. Catering to traders with high risk appetites, they utilize an innovative formula to trace the asset’s price with extreme fluctuation. More here: MAD perpetual contracts - APX Finance

Price prediction bets Dumb Mode: Dumb Mode offers time-bound bets for traders to predict BTC and ETH prices in the next 5 minutes, 10 minutes, 15 minutes or 30 minutes. More here: Dumb Mode - APX Finance

Permissionless DEX Engine: APX Finance’s Permissionless DEX Engine is a free decentralized derivatives trading solution for any business aiming to establish their own perp DEX. It does not require setup permission from APX Finance. The core offering of the Permissionless DEX Engine is the APX on-chain perpetual trading product.

The DEX Engine supports Arbitrum One network. Liquidity is provided by the ALP pool on Arbitrum and partners enjoy up to 20% trading revenue sharing with APX. More here: Permissionless DEX Engine - APX Finance

Is your project composable with other projects on Arbitrum? If so, please explain:

Yes. APX Finance is composable with other projects on Arbitrum; one use case is building LP strategies on top of the ALP pool. For example, APX Finance partnered with Vaultka to launch an ALP leverage strategy. The strategy — named Gin — is a leverage vault offering up to 10x leverage to optimize the return of ALP yield. By depositing USDC.e into Gin, users can amp up their borrowing power to mint and stake more ALP. Leveraging is achieved through zero-interest rate borrowing from Vaultka’s USDC.e Lending Pool.

Do you have any comparable protocols within the Arbitrum ecosystem or other blockchains?

Yes. APX Finance is a LP-based, on-chain perpetual DEX. Comparable protocols on Arbitrum would include GMX and Gains Network.

On BNB Chain, APX Finance is the top perpetual DEX in terms of volume and TVL. APX Finance is also among the top perpetual DEXs on opBNB and Base. A comparable protocol on opBNB is KiloEx.

How do you measure and think about retention internally? (metrics, target KPIs)

We measure the following metrics via our Dune Dashboard.

  • Daily Active User
  • Trading Volume
  • Fee Income
  • No. of Trades
  • Total Value Locked
  • No. of Contracts
  • Open Interest

Relevant usage metrics - Please refer to the OBL relevant metrics chart 2. For your category (DEX, lending, gaming, etc) please provide a list of all respective metrics as well as all metrics in the general section:

General metrics: Daily Active Users, Daily User Growth, Daily Transaction Count, Daily Protocol Fee, Daily Transaction Fee, Daily ARB Expenditure and User Claims, Incentivized User List & Gini Coefficient

Category metrics (perps): TVL, Trading Volume, Open Interest, List of Traders, List of Liquidity Providers, Trader Net P&L Improvement, Funding Rate Stability, Liquidations

You can view metrics here: https://dune.com/apollox-finance/arb-ecosystem-incentive-program

Do you agree to remove team-controlled wallets from all milestone metrics AND exclude team-controlled wallets from any incentives included in your plan: [Yes/No]

Yes

Did you utilize a grants consultant or other third party not named as a grantee to draft this proposal? If so, please disclose the details of that arrangement here, including conflicts of interest (Note: this does NOT disqualify an applicant):

No

SECTION 2b: PROTOCOL DETAILS

Provide details about the Arbitrum protocol requirements relevant to the grant. This information ensures that the applicant is aligned with the technical specifications and commitments of the grant.

Is the protocol native to Arbitrum?: [Yes/No, and provide explanation]

No. APX Finance is native to BNB Chain and later expanded to Arbitrum in August 2023. The expansion was done in partnership with decentralized exchange PancakeSwap via APX’s proprietary SDK broker solution. Trading and LP pool UI on Arbitrum went live on PancakeSwap Perpetual exclusively at launch. On APX Finance’s website, trading UI went live half a month later and the LP pool UI came online two months after.

We aim to achieve our vision of APX as a multichain perpetual trading platform and Arbitrum is our first step. We plan to replicate our success on Arbitrum and become one of the top derivatives protocols on Arbitrum.

On what other networks is the protocol deployed?: [Yes/No, and provide chains]

BNB Chain, opBNB, Base

What date did you deploy on Arbitrum mainnet?: [Date + transaction ID. If not yet live on mainnet, explain why.]

V1:

8 September, 2022

TXID: Arbitrum Transaction Hash (Txhash) Details | Arbiscan

21 February, 2023 (smart contract changed)

TXID: Arbitrum Transaction Hash (Txhash) Details | Arbiscan

V2:

21 August 2023

TXID: Arbitrum Transaction Hash (Txhash) Details | Arbiscan

Do you have a native token?: [Yes/No/Planned, link tokenomics docs]

Yes, APX Finance’s native token is $APX. Tokenomics: Allocation - APX Finance

Past Incentivization: What liquidity mining/incentive programs, if any, have you previously run? Please share results and dashboards, as applicable?

Arbitrum Trading Incentive Program

APX Finance and PancakeSwap Perpetual previously co-hosted an Arbitrum Trading Incentives Program. Each week, the top Arbitrum traders split a prize pool consisting of 25% of trading fee income in USDC. This was equivalent to providing fee rebates for traders.

The prize pool was distributed according to tiers and trading volume. A trading rewards calculation formula was applied to determine the weightage and amount of USDC rewards a user would receive.

Tier and weightage by trading volume:

Tier Description Weight
Diamond Epoch trading amount >=1M USD 5
Gold Epoch trading amount >=500K USD 3
Silver Epoch trading amount >=250K USD 1

Formula:

r = min{R * W/Sum(Wi), R * 20%}

r Amount of USDC reward to be mined by the user for the current epoch
R The reward of the current epoch R=(USDC value of ETH fee + USDC value of DAI fee + USDC value of BTC fee + USDC fee)*0.25, of which 1% Swap fee needs to be deducted when it comes to the settlement, for example: when the weekly ETH fee is 1 and the ETH Price is 2,000, the ETH fee for the USDC value = 1 * 2000 * 0.99
W Weight corresponding to the user’s Tier level
Sum(Wi) Total weight score of all users. Wi represents the weight of any user, and sum(Wi) represents sum weight scores of all users.

Results

A total of $43,500 USDC rewards were distributed during the program’s run. An estimated USD$1,428,933,607 in total trading volume was generated during the period that this program ran.

The reward of 25% trading fee income sharing with top traders is attractive, but the program failed to generate significant trading volume in proportion to the rewards distributed. APX Finance and PancakeSwap Perpetual made the decision to discontinue the Arbitrum Trading Incentives Program in January 2024 in favour of opening APX Finance’s ongoing King of Degens Trading Competition to Arbitrum traders.

Current Incentivization: How are you currently incentivizing your protocol?

Trading: King of Degens Trading Competition (KOD)

Each week, APX Finance rewards top traders with up to US$30,000 APX tokens. Traders who fulfill the weekly trading volume criteria and achieve the highest realized PnL (excluding trading fee) will win rewards. They can trade any perpetual trading pairs (excluding forex) on any supported chain (Arbitrum, BNB Chain, opBNB and Base).

Results

The KOD Competition launched to traders on BNB Chain in November 2023. It opened to traders on Arbitrum in January 2024. While it is difficult to extract the trading volume and fees generated specifically from KOD, we can look at the total trading volume and fees generated during the period.

From 13 November 2023 to 10 March 2024, a total of USD$19.9 billion in trading volume and USD$3.29M in trading fees were generated (across all chains).

While the KOD Competition has proved itself popular among traders:

  • The minimum trading volume requirement is a barrier to entry for beginner perp traders.
  • The competition is open to traders on all supported blockchains.

We believe that an Arbitrum-specific incentive program focused on total trading volume generated rather than PnL, would expand the scope of Arbitrum traders who can participate plus attract traders to Arbitrum.

LPs: ALP yield

APX Finance currently shares 50% of platform fee income with LPs. This cut of fees contributes to ALP net asset value (ALP price increase). At time of writing, APY is at 47%. LPs also earn staking APY in $APX tokens.

Have you received a grant from the DAO, Foundation, or any Arbitrum ecosystem related program? [yes/no, please provide any details around how the funds were allocated and any relevant results/learnings(Note: this does NOT disqualify an applicant)]

No

Protocol Performance: [Detail the past performance of the protocol and relevance, including any key metrics or achievements, dashboards, etc.]

APX is the largest perpetual DEX on BNB Chain in volume and TVL, and among the top protocols in fees (volume, TVL, fees). We’ve achieved over USD$26 billion in total trading volume, >14k traders and $6 million total income on BSC. ALP pool on BSC measures around $19.5 million in TVL.

We believe that APX needs to be multichain. As users increasingly transact on multiple networks, APX plans to support major chains and make the user experience smoother. Hence, Arbitrum, the chain with the most advanced derivatives ecosystem, was our first expansion out of BSC. As of 29 February 2024, these are APX’s statistics on Arbitrum.

Total trading volume: $2.34 billion

Total traders: 1,320

Total income: $307,037

Total trades: 20,155

7D trading volume: $52.56 million

7D traders: 52

7D income: $7,001

Total ALP amount: 863,992

Total ALP value: $955,035

Protocol Roadmap: [Describe relevant roadmap details for your protocol or relevant products to your grant application. Include tangible milestones over the next 12 months.]

By Q2 2024: Product/UI/UX improvements

  • Cross-chain ALP: We will implement a cross-chain solution for the ALP liquidity pool, such that liquidity can be shared between BSC and Arbitrum. TVL on ALP (BSC) currently stands at $19.5 million, while TVL on ALP (ARB) stands at $1.02M. Cross-chain ALP would migrate liquidity over to Arbitrum and increase Arbitrum’s TVL.
  • Merge APX Degen and Classic Modes into a single UI: APX Degen Mode offers high-leverage trading of up to 1001x leverage. Classic Mode offers 1x to 250x leverage. The merge would simplify the trading interface for users to include a slider leverage from 1x to 1001x.

By Q4 2024: APX V3 trading

Following the success of APX V2 which introduced a pool-to-peer liquidity model for fully on-chain perpetual trading, APX will launch V3 trading on Arbitrum. In V2, liquidity for all trading pairs are shared by a single ALP pool.

  • In V3, liquidity for major trading pairs will be shared by the ALP pool. Meanwhile, all other trading pairs e.g. memecoins, smaller altcoins will have their own liquidity pool and token.
  • In addition, users would be able to list any trading pairs they want on APX V3 in a permissionless manner.

Audit History & Security Vendors: [Provide historic audits and audit results. Do you have a bug bounty program? Please provide details around your security implementation including any advisors and vendors.]

APX obtained audit reports from three separate blockchain security firms: Certik, Peckshield and Salus Security. The reports can be found here: Audit Reports - APX Finance

Currently, APX does not have a bug bounty program.

Security Incidents: [Has your protocol ever been exploited? If so, please describe what, when and how for ALL incidents as well as the remedies to solve and mitigate for future incidents]en

A security incident happened to APX version 1 (v1) on 8 June 2022 around 11:30 AM UTC. At the time, APX version 2 had not been launched.

A hacker exploited a flaw in APX v1’s then-Trading Rewards Contract to accumulate 255 signatures. These signatures were then used to withdraw 53M APX tokens from the Withdrawal Contract. No user funds were lost.

APX Finance changed the truth holder of the staking contract in the immediate aftermath, and did a buyback of 12,748,585 APX tokens (worth about US$600k at the time) from secondary markets. The buyback was done to fulfill user withdrawals of APX staking rewards. The remaining loss was made up for via platform trading fees collected.

Mitigating measures after the incident included:

  • Multiple audits from several blockchain security firms (Certik, Peckshield, Salus Security) for APX’s smart contracts
  • Withdrawal limit of US$1M placed on APX’s exchange treasury contract and DAO treasury contract, on an hourly interval.

SECTION 3: GRANT INFORMATION

Detail the requested grant size, provide an overview of the budget breakdown, specify the funding and contract addresses, and describe any matching funds if relevant.

Requested Grant Size: [Enter Amount of ARB Requested]

525,000 ARB

Justification for the size of the grant 6: [Enter explanation. More details are better, including how you arrived at the required funding for individual categories of expenses covered by your grant plan]

We aim to build a truly multichain APX ecosystem and greatly boost TVL and trading volume on Arbitrum. Hence, APX plans to use the majority of the grant as LP and trader incentives. We will also do grant matching with the purpose of encouraging new traders to try APX and boost retention.

APX has a proven track record as the top volume and TVL driver for derivatives on BNB Chain. We believe that our target metrics on Arbitrum are achievable.

  1. Cross-chain ALP & LP incentives (225,000 ARB)

Through implementing cross-chain ALP and introducing 225,000 ARB in LP staking incentives, we expect to increase TVL on Arbitrum.

  • As of 12 March, ALP (Arb) value is $1.02M USD in TVL.
  • We target a 25x increase in TVL, from $1.02M to $24.6M, at the end of 12 weeks.
    • ALP (bsc) will contribute at least $19.5M USD in TVL.
    • We target a 5x increase in TVL for ALP (arb), from $1.02M to $5.1M.

Cross-chain ALP

  • ALP is the main source of liquidity for APX V2. ALP (BSC) has the lion’s share at $19.5 million value locked. In contrast, ALP (Arb) stands at $1.02M value locked. To deepen liquidity for Arbitrum markets on APX and support bigger order sizes for trading, APX will implement cross-chain ALP. Liquidity on BSC will be shared with Arbitrum, increasing TVL.
  • Cross-chain ALP is one step to increase liquidity on Arbitrum, but LP incentives are needed to raise visibility of APX and further boost TVL. At present, LPs earn a 50% cut of platform trading income with no staking incentives. This may not be sufficiently attractive for Arbitrum LPs.

In order to attract new LPs, APX plans to use 225,000 ARB tokens as LP staking incentives. We will provide sweeter yields (to Arbitrum LPs only) via ALP Syrup Pools.

  • With more LPs, APX will contribute greatly to Arbitrum’s TVL and push Arbitrum into the top 3 blockchains by TVL.
  • With higher TVL, ALP can also better support large order volumes from Arbitrum traders. Bigger order sizes attract traders, in turn generating fees and promoting attractive yield for LPs to create a flywheel effect.

LP Staking Incentives

  • APX currently shares 50% of daily platform trading income with LPs, generating a double-digit APY at time of writing. This is attractive considering that ALP on Arbitrum is made up of at least 75% stablecoins (DAI, USDC, USDT).

  • To further incentivize LPs to mint and stake ALP, APX will set up ALP Syrup Pools on PancakeSwap (Arbitrum). APX will provide 75,000 ARB tokens per Syrup Pool, with a 30-day expiration period each.
  • LPs will earn 50% of platform trading fees when they mint ALP, and earn ARB tokens when they stake ALP in the Syrup Pool.

Syrup Pool APR = Annualized rewards (USD) / User funds staked in Syrup Pool (USD) * 100

  • At launch, assuming 10% of existing ALP (arb) value is staked in the Syrup Pool (204,000 ALP), APR is projected to be
    • [((75000/30)*365) / 204,000) * 100] = 447.303%
  • We expect the high APR to attract interest among Arbitrum LPs. Of course, APR will adjust lower as more ALP is staked.

Target metric

We believe that a 25x increase in TVL is reasonable and achievable. ALP (bsc) will contribute at least $19.5M USD in TVL once cross-chain ALP is implemented. LP incentives will increase ALP (arb)’s share of the TVL.

The table below summarizes the TVL of ALP (BSC) over the last year by quarter (rounded to nearest whole number). The average increase quarter-to-quarter averages about $3M. Current incentives on BSC include 50% sharing of platform trading income and staking rewards implemented from the start.

Apr 2023 July 2023 Oct 2023 Jan 2024 Present (Mar 2024)
ALP Value (BSC) 8M 13M 13M 17M 20M

We target a x5 increase in TVL for ALP (arb), around $4.08M. Considering APX’s existing user base and high APR, we expect the LP staking incentives to onboard new LPs from other chains while attracting Arbitrum LPs, hitting our target metrics.

B. Team-based trading challenge (300,000 ARB)

Through implementing a 300,000 ARB Trading Challenge, we expect to increase daily trading volume, daily fees and no. of traders on Arbitrum.

  • Current stats as of 12 March:
    • Daily trading volume: $4.7M USD
    • Daily no. of traders: 6
    • Daily platform income: $682 USD
  • We target a 40x increase by the end of the 12-week period
    • Daily trading volume: $200M USD
    • Daily no. of traders: 240
    • Daily platform income: $27.3k USD

Trading Challenge

APX proposes to use 300,000 ARB tokens to fund an exciting Arbitrum team-based trading challenge. Traders will form teams to compete with one another. They’ll earn rewards while building connections with other traders. The aim is to drive the highest trading volume on Arbitrum.

  • Teams compete to achieve the highest trading volume. There will be a 22,500 ARB prize pool and 2,500 ARB lucky draw each week.

  • To encourage more trading volume, the rewards have to be proportional. Hence, traders’ incentives are determined by their volumes. At the same time, a prize pool ensures that every team gets a share.

  • Weekly lucky draw rewards will be provided in APX tokens.

We believe a trading challenge works better than fee rebates. Comparing APX’s Arbitrum Trading Rewards Challenge (25% platform income sharing with traders as fee rebates) versus the King of Degens (KOD) Trading Competition ($30k in rewards every week), KOD has delivered better ROI. Furthermore, APX’s high-leverage trading pairs (500x - 1001x) have dominated around 80% of trading volume on APX since their launch. A good portion of existing APX traders are ‘degens’ who prefer the thrill of challenges.

Target Metric

For this grant, APX targets a 40x increase in daily trading volume ($200M), daily no. of traders (240) and daily platform fees ($27.3k). We believe this is achievable.

  • We are confident in onboarding active traders from other chains that APX support to Arbitrum. The King of Degens Trading Competition (KOD) is APX’s only existing trading incentives program. It doles out $30k in rewards each week to top traders who hit a minimum USD trading volume requirement (in the hundreds of millions) plus obtain the highest PnL. The top traders in KOD are consistently from BSC. Currently, daily trading volume on BSC (at time of writing on 12 March) is $368M, daily no. of traders is 449, and daily platform income is $56.69k USD.
  • We propose a 300,000 ARB trading challenge with 25,000 ARB weekly prizes ($50k USD).
    • This reward is larger than KOD’s to account for the intense competition with existing Arbitrum derivatives protocols, some of which have abundant trading incentives.
    • A larger reward would more easily attract APX traders from other chains.
    • Furthermore, the proposed trading challenge does not have a minimum trading volume requirement (a barrier to entry for smaller/beginner traders).
  • Secondly, projects like Gains Network show how trading incentives can boost even mature protocols on Arbitrum. Gains Network is distributing 3.825M ARB tokens as trading incentives from the Arbitrum STIP. From January 1 to March 12, Gains Network has seen total trading volume increase by 6.7x, from 77.98M USD to 523.95M USD volume.
  • Most traders on Arbitrum know about Gains Network (and may already use gTrade). APX does not have the same visibility. While we request only a fraction of Gains Network’s amount as trading incentives, our established user base on other chains and increased visibility on Arbitrum will help to achieve our target.

Grant Matching:

APX will do grant matching with 37,500 ARB tokens received from the Arbitrum Airdrop in 2023. The aim is to attract new traders to APX and encourage retention. ARB tokens will be used 2 ways:

a. Welcome bonus on 1001Bot, a Telegram trading bot supporting high-leverage trading on APX

b. Boost ARB holder benefits

Welcome Bonus (22,500 ARB)

We plan to use 22,500 ARB tokens to incentivize daily activity and encourage retention on Arbitrum. This incentive aims to cover traders’ gas fees and nudge them to try perpetual trading on Arbitrum via APX.

  • APX currently provides a daily 0.0025 BNB welcome bonus on the opBNB network. The bonus can be claimed via 1001Bot, a Telegram trading bot designed to support high-leverage trading on APX. The bonus covers traders’ gas fees for their first transaction, and cannot be withdrawn.
  • APX has seen success with this bonus activity in attracting new traders
    • In the 3 months since the bonus’ implementation in mid-December 2023, 2.8k users have claimed their tokens.
    • Total trading volume: $73,57M USD
    • Total users: 42.2k
  • To encourage more trading activity on Arbitrum, APX will extend this bonus to Arbitrum traders. New traders on 1001Bot can claim a 0.125 ARB welcome bonus. Budget: 250 ARB tokens per day, for the first 2000 new users. Total would be 22,500 ARB tokens for 90 days.

ARB Holder Benefits (15,000 ARB)

To further encourage the growth of the Arbitrum ecosystem, APX will allocate more benefits for ARB token holders and stakers.

  • Under ‘Regular Trading Incentives’, traders who hold ARB tokens will enjoy higher weightage for their trading volume.
  • Under ‘ALP Syrup Pool’, LPs who hold ARB tokens and mint and stake ALP can earn more Stake APY.

Grant Breakdown:

Category Percentage / Amount
LP incentives 42.8% / 225,000
Trading incentives 57.2% / 300,000
Welcome bonus 22,500 ARB from APX
ARB holder privileges 15,000 ARB from APX

Funding Address:

0x60EdE4402a34762D608AD9bA7bD3797f5bFE544c

Funding Address Characteristics:

​​3/6 multisig. 3 out of 6 unique signers to execute.

Private keys are securely stored with the signers.

Treasury Address:

0x60EdE4402a34762D608AD9bA7bD3797f5bFE544c

Contract Address:

TBC - APX will create new smart contract(s) to disburse funds from the grant.

SECTION 4: GRANT OBJECTIVES, EXECUTION AND MILESTONES

Clearly outline the primary objectives of the program and the Key Performance Indicators (KPIs), execution strategy, and milestones used to measure success. This helps reviewers understand what the program aims to achieve and how progress will be assessed.

Objectives: [Clearly state the primary objectives of the grant and what you intend to achieve]

  1. Increase Arbitrum’s TVL by migrating ALP pool’s liquidity from BSC and boosting LP yield.
  2. Increase Arbitrum and APX trading volumes, strengthening Arbitrum’s position as the trading hub for decentralized derivatives.

Execution Strategy: [Describe the plan for executing including token distribution method (e.g. farming, staking, bonds, referral program, etc), what you are incentivizing, resources, products, use of funds, and risk management. This includes allocations for specific pools, eligible assets, products, etc.]

Our goal is to build another successful APX ecosystem on Arbitrum and boost TVL and volume, replicating our success on BSC or even surpassing it. To achieve this, our main execution strategy is:

  • Migrate liquidity to Arbitrum via cross-chain ALP pool
  • Boost LP incentives on Arbitrum
  • Introduce a team-based trading challenge for Arbitrum traders
  1. Migrate liquidity to Arbitrum to increase ALP TVL
  • APX plans to leverage a cross-chain solution to migrate ALP (BSC) liquidity to ALP (Arbitrum).
  • After successful implementation, traders and LPs on Arbitrum can benefit from higher TVL.
  1. Boost LP incentives to increase Arbitrum TVL (225,000 ARB)
  • To provide sweeter LP yield and attract more LPs, APX plans to add staking rewards to ALP (Arb).

  • At the start of each 30-day period, APX will set up an ALP Syrup Pool on PancakeSwap (Arbitrum). LPs will be able to mint ALP to earn Fee APY, then stake ALP in the Syrup Pool to earn additional Stake APY.

    • Fee APY consists of 50% of daily platform income. This cut of platform income is automatically funnelled to ALP and increases its net asset value.
    • Stake APY will be funded with ARB tokens. At the start of each 30-day period, APX will fund 75,000 ARB tokens into the Syrup Pool. Those who stake ALP in the Syrup Pool earn ARB.
  1. Trading challenge to increase Arbitrum’s derivatives trading volume (300,000 ARB)
  • We expect to start marketing activities for the Challenge 2-3 weeks prior to its start.
  • During the Challenge, APX will provide regular updates and leaderboard rankings for participants.
  • At the end of each weekly epoch, APX will calculate the proportion of ARB rewards that trading teams are entitled to receive from the weekly 22,500 ARB prize pool, based on their trading volumes for that epoch.
    • Rewards calculation formula: (Team’s volume / Total trading volume) x Rewards pool
    • Assuming a 22,500 ARB tokens prize pool, team A contributed USD$100M in volume, and the total trading volume is USD$1B: Team A gets (100M/1B) * 22,500 = 2,250 ARB tokens.
  • Rewards distribution will happen 1 working day after the end of an epoch. APX will transfer ARB tokens from the contract address into the rewards pool funding address. These tokens will then be sent to the team’s designated wallet according to their prize pool split.

Weekly Draw

  • Each week during the Challenge, trading teams can enter a 2,500 ARB draw to win additional tokens.
  • Rewards distribution will happen 1 working day after the end of a period. APX will transfer the APX tokens from the contract address into the team’s wallet directly.
  1. Grant Matching

ARB Welcome Bonus (22,500 ARB)

  • APX will work with 1001Bot to allocate 500 ARB as welcome bonuses for the first 2000 new traders on Arbitrum, per day, during the 12-week period.
    • 1001Bot is a Telegram trading bot designed to support high-leverage trading on APX.
    • APX already provides 0.0025 BNB as a daily welcome bonus on the opBNB network. The bonus covers traders’ gas fees for their first transaction, and cannot be withdrawn.
    • To encourage trading activity on Arbitrum, this bonus will be extended to Arbitrum traders. Each new trader can claim 0.25 ARB.
  • To claim, traders can access 1001Bot on Telegram, select Arbitrum network and easily claim their bonus in one click. The bonus will be sent to traders’ wallets in 1001Bot directly.

ARB holder privileges (15,000 ARB)

  • APX will set aside 15,000 ARB to reward ARB holders.

What mechanisms within the incentive design will you implement to incentivize “stickiness” whether it be users, liquidity or some other targeted metric? [Provide relevant design and implementation details]

To further incentivize “stickiness” and encourage the growth of the Arbitrum ecosystem, APX will allocate more benefits for ARB token holders.

  • Under ‘Regular Trading Incentives’, traders who hold ARB tokens will enjoy higher weightage for their trading volume.
  • Under ‘ALP Syrup Pool’, LPs who hold ARB tokens and mint and stake ALP can earn more Stake APY.

Incentives pull new traders/LPs in, so to speak. To encourage long-term stickiness, rather than overly focusing on retention, we believe that building a community that enjoys using APX is more effective. In fact, strong product fundamentals that resonate with the community is why APX has been able to thrive on BNB Chain.

Hence, APX will continuously engage with the community for feedback to improve the user experience. We will also hold community events to surprise and connect with users.

Specify the KPIs that will be used to measure success in achieving the grant objectives and designate a source of truth for governance to use to verify accuracy. [Please also justify why these specific KPIs will indicate that the grant has met its objective. Distribution of the grant itself should not be one of the KPIs.]

TVL (Source)

  • Providing enhanced LP yields via ALP Syrup Pools is one main execution strategy. Hence, TVL would be the most direct measurement for our TVL objective.

Trading volume (Source)

  • As we aim to increase trading volumes for both APX and Arbitrum, total trading volume generated from the proposed Trading Challenge would reflect the objective’s success.

No of unique addresses interacting with APX (Source)

  • The number of unique addresses paints a picture of how many new traders/LPs APX attracts during the incentive period.

No. of transactions / on-chain activities (Source)

  • This KPI will measure the daily activity of traders/LPs and reflect a measure of APX’s ability to retain users.

To verify accuracy, refer to APX’s Dune dashboards (1, 2) or reach out to MZ.

Grant Timeline and Milestones: [Describe the timeline for the grant, including ideal milestones with respective KPIs. Include at least one milestone that shows progress en route to a final outcome. Please justify the feasibility of these milestones.]

Timeline Milestone
Month 1 TVL milestone: 5 million
Month 2 Daily trading vol: 50 million

TVL milestone: 10 million|
|Month 3|TVL milestone: : 20 million

Daily trading vol milestone: 200 million|

The grant will be distributed during the 12-week incentive period.

  • LP incentives: 75,000 ARB tokens will be channeled into an ALP Syrup Pool at the start of each month. This will continue over the incentive period, for 3 months. The total amount is 225,000 ARB.
  • Trading incentives: 22,500 ARB tokens will be distributed to participants in the proposed Trading Challenge each week. 2,500 ARB tokens will be available as rewards for weekly lucky draws. The total amount over 12 weeks will be 300,000 ARB.

Grant matching

  • ARB welcome bonus: 250 ARB tokens will be allocated for new Arbitrum traders on 1001Bot daily. The welcome bonus will be available to claim daily for the entire 12 weeks.
  • ARB holder benefits: 15,000 ARB tokens will be reserved for ARB holder privileges.

How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem? [Clearly explain how the inputs of your program justify the expected benefits to the DAO. Be very clear and tangible, and you must back up your claims with data]

If successful, the grant would onboard new traders and LPs to trade and provide liquidity on Arbitrum via APX. As the largest perpetual DEX on BNB Chain and among the top protocols in fees (TVL, fees), APX has an established user base with users who increasingly transact on multiple chains.

That said, industry heavyweights like GMX and Gains Network are already well-established on Arbitrum. If usage is confined to a couple of platforms, this stifles innovation and competition for better user benefits as a monopoly occurs. Traders may also want to try APX but are hesitant to do so without sufficient incentives.

During STIP, many grantees saw their metrics improve as incentives became the main driver for new users on their platforms. APX hopes to replicate this effect to draw new traders and LPs to Arbitrum. Adding on mechanisms for “stickiness” and a strong product, APX is confident in retaining these users to transact on Arbitrum.

A portion of the grant will also be used to bootstrap new protocols who want to build on APX or ALP. This would be solely applicable to builders on Arbitrum.

Do you accept the funding of your grant streamed linearly for the duration of your grant proposal, and that the multisig holds the power to halt your stream? [Yes/No]
Yes

SECTION 5: Data and Reporting

OpenBlock Labs has developed a comprehensive data and reporting checklist for tracking essential metrics across participating protocols. Teams must adhere to the specifications outlined in the provided link here: Onboarding Checklist from OBL 4. Along with this list, please answer the following:

Is your team prepared to comply with OBL’s data requirements for the entire life of the program and three months following and then handoff to the Arbitrum DAO? Are there any special requests/considerations that should be considered?
Yes.

Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread that reference your OBL dashboard? [Please describe your strategy and capabilities for data/reporting]
Yes. We will continuously update our Dune Dashboard and submit bi-weekly updates on the APX Arbitrum Forum thread.

First Offense: *In the event that a project does not provide a bi-weekly update, they will be reminded by an involved party (council, advisor, or program manager). Upon this reminder, the project is given 72 hours to complete the requirement or their funding will be halted.

Second Offense: Discussion with an involved party (advisor, pm, council member) that will lead to understanding if funds should keep flowing or not.

Third Offense: Funding is halted permanently

Does your team agree to provide a final closeout report not later than two weeks from the ending date of your program? This report should include summaries of work completed, final cost structure, whether any funds were returned, and any lessons the grantee feels came out of this grant. Where applicable, be sure to include final estimates of acquisition costs of any users, developers, or assets onboarded to Arbitrum chains. (NOTE: No future grants from this program can be given until a closeout report is provided.)
Yes

Does your team acknowledge that failure to comply with any of the above requests can result in the halting of the program’s funding stream?: [Y/N]
Yes

1 Like

Hello @ApolloX,

Thank you for your application! Your advisor will be Castle Capital @Atomist.

Please join the LTIPP discord and ping your advisor in the general chat so they can create a new channel and start communicating with you.

1 Like

a nice addition to arbitrum let’s see what they can do

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Hi @Matt_StableLab , we have finalised our application proposal. Please check.

Hi @cliffton.eth , we have finalised our proposal last Friday, but seems like the title is not changed yet. Could you please help to change our draft title to FINAL? Thank you very much.

Hey there this proposal has been updated to show that it is FINAL. All the best!

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ITU Blockchain, has carefully examined APX Finance’s plan to increase liquidity on Arbitrum and decided to support this initiative.

The potential and opportunities offered by the plan are quite impressive. In particular, the idea of bringing together liquidity from Binance Smart Chain (BSC) and Arbitrum networks and providing access to new markets seems to be an important step for the platform’s expansion. In this context, the strengths of the plan include the interest and potential for success of the APX Finance protocol on BSC, a clear implementation strategy, and the team’s deep knowledge of blockchain technology.