ApeSwap Review

What is ApeSwap?

ApeSwap is a decentralized exchange focused on offering a premier trading experience. Users of the exchange can also pool liquidity and earn the project’s native cryptocurrency – BANANA through yield farming. The BANANA tokens can be staked to earn other tokens and unlock more features of the platform. Currently, the DEX allows its users to swap between 150+ tokens both on BNB Smart Chain and Polygon.

ApeSwap has created two NFT collections – Non-Fungible Apes and Non-Fungible Bananas. The first one consists of 1000 unique digital images of apes, each of which is created by hashing a string to randomly generate a set of six characteristics – base, face, frame, mouth, eyes, and top. The second collection was created to give the wider community of the platform the possibility to own an official ApeSwap NFT.

How does ApeSwap work?

Naturally, the platform’s main product is the swap feature, which the team claims is the most efficient way to trade tokens. In addition to token swaps, users adding liquidity to the DEX earn LP tokens and can hold them to earn trading fee rewards or stake them in yield farms. 

ApeSwap provides fundraising capabilities to projects through two types of ICOs called IAO or  Initial Ape Offerings. The first one is the official IAO, projects allowed to be featured in this program are carefully selected by ApeSwap, and receive marketing support from the platform, as well as access to the BNB raised to kickstart their growth on BNB Smart Chain. In order to participate in the program, and bring liquidity to a newly launched token, the customer needs to have BNB or GNANA, which will be traded during the IAO, for the token being launched. Following the fundraising, the project receives the raised BNB, whereas ApeSwap converts the raised GNANA to BANANA and burns it after that.

The second IAO program is called Self-Serve IAO available to anyone. Projects participating in it are not officially endorsed by ApeSwap, meaning they don’t go through the same vetting process that Official IAO program members do. It is advisable to do your own research if you are willing to participate in such IAO.

How to use ApeSwap?

By interacting with the ApeSwap app, users can buy, swap, stake, add liquidity, lend and borrow, participate in ICOs of new projects, and margin trade. Other protocols can list their tokens on the exchange, create staking pools and yield farms, as well as raise capital through ICOs. 

Using the protocol requires a crypto wallet to be connected to the platform, ApeSwap wallet support currently includes MetaMask, TrustWallet, TokenPocket, SafePal Wallet, and others, the full list can be found on their website once the button “connect” on the top right corner is pressed.

ApeSwap fees include a 0.20% trading fee each time users swap tokens, out of it 0.05% goes to the Treasury, and the remaining 0.15% gets distributed proportionally to all holders of the applicable LP token. Holding BANANA or GNANA is incentivized with each trade on the DEX as a portion of Treasury funds are used to buy back and burn BANANA.

ApeSwap farming features include staking pools which can allow any partnering project to bootstrap adoption by distributing their tokens to BANANA and GNANA token holders. In order to be eligible for this distribution, users need to stake their BANANA or GNANA tokens in the aforementioned pools.

ApeSwap yield farms are intended to primarily incentivize users to provide liquidity, by rewarding them with BANANA tokens. There is also a Vault contract, allowing clients to automate the process of yield farming. The auto compounding vaults provide means for staked tokens to be used to generate farm profits and then be used to buy more staked tokens and grow the user’s staked balance, at the cost of a 1% performance fee. ApeSwap also utilizes burning vaults, which use a high percentage of farming profits to buy BANANA and burn it. The burning vaults are open for use by any member of the community; however, they are primarily intended to be funded by the DEX fees. 

The BANANA and GNANA tokens

The two tokens utilized by the ApeSwap ecosystem are BANANA and GNANA. Each of them has its own specific purpose. BANANA tokens are primarily intended to incentivize users to add liquidity to the platform. GNANA is used as a way to reward the most committed users through access to governance and exclusive benefits.

BANANA can be staked or used to acquire GNANA, or swap to any of the platforms’ supported tokens (of which there are more than 150). The BANANA coin can also be used in the company’s lending network to earn interest. Being the primary native token of the ecosystem, BANANA earns LP tokens to liquidity providers which can be used in the Yield Farms on the platform. There is no hard cap on the supply of the token, making it an inflationary token.

GNANA can only be acquired by converting BANANA, however this incur a 28% burn fee in addition to a 2% reflect fee, resulting in 30% cost for the conversion. This is considered beneficial to ApeSwap’s ecosystem, as the protocol uses the GNANA burn fees to buy back and burn BANANA, reducing its supply. In order to make up for the high fees, the ApeSwap team has made the price of GNANA valued at 1.389x compared to BANANA.

GNANA is a reflect token with 2% transfer fee, meaning each time GNANA is moved from wallet to wallet, staked in a pool, or transferred, 2% of the amount is distributed proportionally to all users holding GNANA in their wallets. The token is backed by BANANA and can always be swapped for it, however if that is done, the price difference will be realized. The sold GNANA is returned to the treasury fund. New GNANA is minted only if the treasury lacks the supply to fulfill sell requests in its existing funds.

The GNANA token can be used to vote on governance proposals, as long as the token is held in a wallet and not staked, for example. Staked GNANA can earn BANANA or other partner tokens. GNANA holders can participate in special IAOs separate from the standard BNB allocations.

Is ApeSwap safe?

The ApeSwap team is keeping its identity private but has gone public with nicknames related to the ApeSwap lore. The five co-founders include ApeGuru – a full stack developer, claiming to be an expert, and ApeTastic who claims to be an expert smart contract developer. Harambe Nakamoto works on Tokenomics, Analytics, and Engineering. DK is responsible for business development and marketing, while Obie Dobo is the community manager. The core team includes 15 more developers and there are five members of the community team.

ApeSwap audits can be found in the protocol dashboard on this webpage.

Partners 

The full list of partnerships established by ApeSwap is referred to as the ApeSwap Jungle and can be found on the company’s official documentation, here, it includes companies such as FRAX, Animoca Brands, KardiaChain, LunarCrush, and many more. The team advises users to proceed with caution when a project claims they are collaborating with the DEX, and to double-check the project’s official social media channels to confirm the claims if in doubt. 

In order to partner with the exchange, a form needs to be filled out, available on the ApeSwap website. Following it, there is due diligence with the team, a requirement to add liquidity to the DEX and list a token on the exchange. Once the token gets listed, crypto projects gain access to benefits such as advice and guidance from the team by getting the tools needed to realize the customer’s full potential. Listed partner tokens also get exposure to the company’s unique 1.5M userbase. 

What's next?

The team will release an updated roadmap after the middle of February 2022 as announced in their Discord channel.

Links

https://vote.apeswap.finance/#/

https://info.apeswap.finance/home