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Apollo DAO, The next Decentralized Hedge Fund?

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Apollo DAO, a compound return tool for Terra Eco-automation, is expected to expand to other blockchain ecosystems with the subsequent inclusion of more complex cross-chain strategies, thus exploring becoming a decentralized investment fund.

Decentralized Hedge Fund

Paul Veradittakit, partner at Pantera Capital

Lu Jiangfei

Last month, well-known crypto vc Pantera Capital announced its first investor in Apollo DAO, a new composite returns DeFi protocol on Terra blockchain. We are pleased to work with other strategic investors (e.g., Do Kwon, GSR, etc.) to provide the necessary funding and guidance to help Apollo DAO take the project to the next level.

The DeFi ecosystem on the Terra blockchain has been growing rapidly in recent months. For example, Anchor Protocol, a high-yield savings product launched in April, now has a total lock-up of more than $5 billion. Mirror, a synthetic stock protocol that has locked up more than $1.5 billion in positions; Terra's LUNA token, the ecosystem reserve asset, has a fully diluted market value of more than $40 billion. Just this past October, we introduced readers to Stader Labs.How can retail investors participate in the multibillion-dollar collateral marketA brand new Staking infrastructure building agreement on Terra's blockchain.

While Ethereum remains at the center of DeFi activity, the developers in the Terra ecosystem and the incredible value growth have proven that Terra blockchain is also a successful and staying Layer 1, even if it all seems a bit haphazard.

What is Apollo DAO?

Apollo DAO's goal is to "bring DeFi to the masses," and its first product fits their mission perfectly, this product isBased on the automated revenue synthesizer on Terra blockchain, it aims to make it easier for people to participate in DeFi.

为什么自动复利能给投资者带来价值？想要理解这个问题，我们可能要先从一个例子入手。让我们假设您是 Mirror 协议的流动性提供者，如果您向流动池内提供资金（比如说以 mTSLA 的形式），那么则可以获得 Mirror 协议原生 Token MIR 的 LP 奖励；但是，如果你不想要 MIR Token ，而是想要更多 mTSLA 并将这些资金重新供应到流动性池呢，那么就不得不手动将 MIR 兑换成 mTSLA，此时你可能遭遇滑点、高额 Gas 费用、交易阻塞等各种问题。

Imagine if you executed these trades multiple times in a row in several different liquidity pools. Unless you are an institutional LP or a DeFi whale, you either don't have the bandwidth or patience or capital to back them up -- which is where Apollo DAO's automated synthetic product comes in.

Users can easily view different revenue opportunities and choose to invest in different liquidity pools directly from the front end of the Apollo DAO.By default, these pools canAutomatically recycle your rewards, thus reducing the high network costs and other hassles caused by manually executing transactions.

The Apollo DAO protocol interface is also designed with user friendliness in mind. Few DeFi protocols are as powerful and intuitive as The Apollo DAO (much less in Terra Ecology), and the protocol is even compatible with mobile devices.

Last month, the Apollo DAO protocol was officially released and attracted $200 million in lock-ups in just 24 hours, a clear indication of the strong interest in the crypto community. To date, Apollo DAO is the seventh largest lock-up in the Entire Terra ecosystem.

Does Apollo DAO have native tokens?

APOLLO is the native Token of the APOLLO DAO protocol.

目前，APOLLO Token 有两个关键用途：

1. APOLLO Token holders can gain voting rights on DAO governance decisions, such as adding new vaults, changing performance fees and other protocol parameters;

2. Users can pledge their APOLLO tokens for rewards (in the form of zAPOLLO);

In addition, early vault depositors brought critical liquidity to the Apollo DAO agreement, so they could receive Token allocation rewards.

While APOLLO Token is not yet fully released, community distribution has already begun. At the first Community Farming Event, 3m APOLLO tokens were offered but were already oversubscribed, so the team decided to issue an additional 6m APOLLO tokens for income-farming participants. If you are interested in participating, you can do so athereLearn more.

What was Apollo DAO's War Chest?

The "War Chest" is the core element of the Apollo DAO protocol and a key differentiator from other DeFi protocols.

In short, the war chest isA liquidity pool for Apollo DAO protocol fees that grows in tandem with protocol usage. By default, Apollo DAO's "performance fee" is 20%, but Token holders can change the rate, and the vast majority of the fee (99%) from the agreement goes directly to the War Chest -- another 1% is donated to charity through Angel Protocol.

Once the funds are in the War chest, Token holders can vote on the allocation of funds, which by default is as follows:

, & have spentUST: 50%

, & have spentBETH: 20%

, & have spentAUST: 30%

However, DAO administrators can also use the funds as they wish, such as by choiceEngage in high-yield liquidity mining activities, buy different crypto assets, and even buy back Apollo;Token.

In the future, the War Chest will also participate in the meta-governance of Terra's ecosystem. Since the fund's holdings are mostly Terra's on-chain assets,Apollo DAO could eventually become an important stakeholder and participant in governance decisions, similar to institutional funds,As its development team put it:

"APOLLO Token enables meta-governance by allowing holders to gain voting power and use it to determine how DAO is used.The Apollo agreement will also use this voting power strategically to help shape Terra's ecosystem and then expand to other ecosystems.Because of this voting power, if other protocols want to explore Terra blockchain, Apollo DAO can be their best partner."

More than $2 million is currently locked up in the war chest.

Future Development Direction

While Apollo DAO's flagship product is an automated compound revenue tool, the team already has more ambitious plans for the future.

For example, theyExpansion is planned to support DeFi protocol vaults for other non-Terra blockchains, which may incorporate more complex cross-chain strategies.Of course, this development is also in line with Apollo DAO's mission to expand DeFi's reach and make it more user-friendly and less frictionless.

But what was the ultimate vision of Apollo DAO? In their own words:

"Apollo DAO's long-term vision is to create something akin to a decentralized hedge fund. Initially, we will focus on Terra on-chain assets, but expect to invest in other blockchains soon.The War chest consists of pledged LUNA and aUST, and APOLLO Token holders have the right to decide which Terra chain yield farming opportunities to deploy the funds to and what to do with the rewards."

Without a doubt, the vision of becoming a decentralized hedge fund is what I'm most excited about about the Apollo DAO project.

In fact, we've already seen some good teams exploring the concept of "decentralized investment funds" like BitDAO and Yield Guild Games, and now Apollo DAO (and its Token holders) is trying it out, hoping they'll be successful.