According to CoinGecko, no cryptocurrency or token has risen more than Aptos in the past few days or weeks.
The Aptos blockchain’s native coin, APT, has more than doubled in price over the past seven days, up 47% to $18.46 in the past day alone. Since the beginning of the year, Aptos is up 350%. Why?
It’s difficult to pinpoint an exact reason, but data shows that about half of APT’s $2 billion volume over the past day came from the South Korean won trading pair on Singapore-based exchange UpBit, according to CoinGecko. At the time of writing, APT was priced at $18.63 on UpBit.
That’s almost $0.50 more than it’s selling on Binance and most other exchanges, and a sign that at least some of the activity is coming from arbitrage trades. Simply put, arbitrage traders benefit from price differentials. They buy at the lowest price available and sell at the highest price they can get.
South Korean exchanges so frequently list crypto assets at higher prices than their global counterparts that the difference has been dubbed the “kimchi premium.” Just last year, the Seoul Central District Attorney’s Office opened an investigation into illegal remittances worth 2 billion Korean won generated by arbitrage traders who profited from it.
It’s also worth noting that while Aptos is still only the 20th largest DeFi ecosystem, it has grown significantly over the past month, according to DeFi Llama. DeFi volume on Aptos surged from $14 million last month to $51 million in January — and the month isn’t even over yet.
Growth in Aptos trading volume on decentralized exchanges. Image: DeFi Llama
Another 10% of the past day’s APT volume came from Binance’s APT and Binance USD (BUSD) trading pair. Binance, the world’s largest crypto exchange by volume, also recently launched two APT liquidity pools, which now account for another 18% of APT’s trading volume.
Liquidity pools encourage peer-to-peer trading of crypto assets. Users are encouraged to “pool” or escrow their tokens so that they can be exchanged with other users. They are essential for decentralized exchanges like Uniswap and Curve to work. But centralized exchanges like Binance also use them.
On Jan. 20, the Binance Liquid Swap platform unveiled its APT/Tether and APT/Bitcoin liquidity pools. The platform rewards users with BNB, the exchange’s utility token, for depositing funds into the pools.
At the time of writing, Binance is promising a 92.42% return on APT/USDT and 99.49% return on APT/BTC liquidity pool deposits. Of this, users would receive 0.71% and 1.07% BNB rewards, respectively, paid out on an hourly basis.
Aptos has consistently outperformed the market since the beginning of the year. But it got off to a rocky start when it was main net started in October.
The project received a lot of backlash for not releasing its tokenomics earlier than it did. Criticism mounted as the blockchain, which promised speeds of up to 150,000 transactions per second, showed speeds of 4 transactions per second after its big debut.
At the time, Aptos co-founder Mo Shaikh said on Twitter that this was a sign that “the network is idle before projects come online”.
Aptos backers include many of the venture capital firms that have become mainstays of the industry: Andreesen Horowitz, Multicoin Capital, Jump Crypto, Tiger Global Management, Blocktower Capital, and Coinbase Ventures. And leading up to its launch, the project completed a $200 million strategic round and a $150 million Series A round.
That list also includes two companies that have since filed for bankruptcy: hedge fund Three Arrows Capital and FTX Ventures, the venture arm of Sam Bankman-Fried’s crypto empire.
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