ApeSwap is a decentralized exchange on BNB Chain with a mission to “provide accessible financial opportunities for the (crypto) masses through transparency, security, and support.” ApeSwap wants to decentralize traditional finance and create a “fair global economy” with its “sustainable, community-driven DAO.” In practice, this means ApeSwap provides DeFi
tools like token swaps
, margin trading
, providing liquidity
, and IDO
ApeSwap strives to provide accessible, secure, and transparent DeFi tools for everyone and promises to commit to that through its DAO
governance. It also boasts impressive partnerships with several prestigious DeFi projects like FRAX
, and KAI
, and Animoca Brands, an NFT venture capital fund. In total, AweSwap has over 200 partnerships with launchpads, incubators, NFT marketplaces, DeFi protocols, and GameFi
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ApeSwap offers several DeFi functions on its decentralized exchange.
Users can buy its BANANA
and GNANA tokens by connecting their crypto wallet
to the exchange and swapping
another token for them. Furthermore, ApeSwap offers token swaps between other BEP-20
tokens and has generated over $16 billion in total trade volume and over $200 million in TVL
Another function is providing liquidity. For instance, users can connect their wallets to the ApeSwap DEX and add liquidity to a liquidity pair on the exchange. They receive LP tokens in return, which they can stake to receive a share of the BANANA emissions as a reward. Users can also stake their BANANA in the ApeSwap burning vaults and increase their share of the total BANANA supply. Currently, ApeSwap offers a 69% APY on staked BANANA and 87% APY on the BANANA-BUSD liquidity pair.
There is a variety of different trading pairs that users can yield farm on. Its BANANA farms have special farm multipliers that manage the emitted banana distributed to the farms. Farms with higher multipliers offer higher BANANA rewards, thereby incentivizing users to provide more liquidity to these pairs. By staking LP tokens in yield farms, users earn a share of the trading fees and BANANA regards. Furthermore, its Jungle Farms allow partner projects to incentivize their own liquidity by paying out their tokens. Instead of receiving BANANA, yield farmers receive the partner token.
Users and protocols can also fundraise through ApeSwap. ApeSwap offers Treasury Bills and Initial Ape Offerings (IAOs) as fundraising mechanisms.
IAOs can be either official or self-serve IAOs. In official IAOs, ApeSwap audits projects from a list of official IAO partner applicants and provides them with marketing support and access to the raised BNB. Users can participate by using BNB or GNANA, which leverages the higher purchasing power of the GNANA token to reward its holders. Self-serve IAOs allow crypto projects to set up a funding campaign themselves and bootstrap their own liquidity on the ApeSwap DEX. However, these IAOs are not endorsed by ApeSwap and do not receive marketing support from the platform.
Treasury Bills are a new initiative to ensure the long-term health of ApeSwap and are the exchange’s first yield-generating NFT product. Users can provide liquidity and receive BANANA Bills or Jungle Bills in return. This creates protocol-owned liquidity for ApeSwap in the same way Olympus DAO
generates liquidity through its bonds. BANANA bills offer the native BANANA token at a discount, while Jungle Bills offer partner tokens and provide those protocols with their own protocol-owned liquidity.
Finally, users can lend and borrow through the ApeSwap Lending Network.
By borrowing, investors can access the value of their assets while retaining custody of them. The available amount for borrowing depends on a token’s collateral factor. For example, WBTC has a collateral factor of 70%, meaning users can borrow up to 70% against the value of their WBTC. When lending, users will receive a supply APY in the deposited currency (ETH if they lend ETH) and a distribution APY
in BANANA tokens.
ApeSwap has become one of the top 5 DEXes on the BNB Chain, thanks to several unique features.
ApeSwap describes itself as the “most connected and most supportive DEX in crypto.” Its 200+ partners come from different sectors of the blockchain industry, such as NFT, GameFi, DeFi, bridging, launchpads, incubators, and more. ApeSwap lists all of its partners in its ApeSwap Jungle
. This allows ApeSwap to provide marketing as a service to other protocols and position itself as a DeFi hub with all necessary solutions users need.
Variety of Use Cases
ApeSwap offers all standard functions of a decentralized exchange, such as staking, yield farming, lending and borrowing, token swaps, and more. However, it goes beyond that and provides both investors and protocols with valuable services. For instance, its Treasury Bills allow ApeSwap and other protocols to generate their own protocol-owned liquidity. Another example is its Initial Ape Offerings, which function as a launchpad. On the one hand, they enable users to invest in promising new protocols and, on the other hand, provide protocols with a way of bootstrapping liquidity and benefiting from ApeSwap’s marketing capabilities.
ApeSwap is governed as a DAO and strives to be transparent about its revenue creation and utilization. It displays protocol revenue and burn mechanics on its Financials
and reserve governance for its most essential long-term community members - GNANA holders. ApeSwap plans to provide further details on its governance priorities and processes throughout 2022.
The total supply
of BANANA is unlimited. ApeSwap emits 316,800 BANANA per day at the moment, which are distributed as follows:
- Yield Farms (BNB Chain): 39.5%
- BANANA Pool: 22.7%
- Lending Network (Ola): 9.09%
- Yield Farms (Polygon): 9.09%
- Bonds: 9.09%
- Dev Wallet: 6.36%
- Burned: 2.73%
- $GNANA Pool: 1.36%
GNANA is the governance token
of ApeSwap that can be used to vote on proposals, or that can be staked to earn more GNANA. BANANA can be used for staking and lending on the platform. It can also be swapped for other tokens, and investors can buy ApeSwap’s second token, GNANA, with it. GNANA holders also receive exclusive access to token allocations for Initial Ape Offerings. GNANA raised from an IAO is converted to BANANA, which is then burned.
Other burn mechanisms for BANANA include:
- Quarterly buyback and burn: 50% of trading fees are used to buy back and burn BANANA
- Weekly burns on Thursdays
- Partner projects burning BANANA
- GNANA reflect fees are used to burn BANANA
- 10% of fees collected through Burning Vaults are used for buying stablecoins and leaving them in vaults permanently. Rewards earned from these vaults are used to buy back and burn $BANANA.
ApeSwap (BANANA) is currently trading at around $0.3134 as of April 29, 2022, down from its all-time high of $11.8 set in May 2021. Its 24-hour trading volume on exchanges is around $1 million, and its fully diluted market cap is around $33 million.
ApeSwap is a solid decentralized exchange with a broad partner portfolio and several interesting functions. Its new Treasury Bills are a useful addition to its services and should provide ApeSwap with additional revenue from other protocols.
However, the price of BANANA has been on a steady downtrend since its all-time high, losing more than 97.36% of its value. This is undoubtedly due to its uncapped supply, making the token inflationary despite ApeSwap's deflationary mechanisms. The exchange should thus look to add additional deflationary mechanisms and potentially limit the supply of BANANA if it wants to reverse the price downtrend.
Due to the changing macro conditions and the unlimited supply of the BANANA token, a price prediction is almost impossible. However, if the token supply were to change, that should positively impact the token's price.
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