Pantera Capital Partner: Terra Ecological Compound Income Agreement Apollo DAO, the next decentralized hedge fund?


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As a compound income tool for Terra ecological automation, Apollo DAO is expected to expand to other blockchain ecosystems with the subsequent inclusion of more complex cross-chain strategies, so as to explore becoming a decentralized investment fund.

Original Author: Paul Veradittakit, Partner of Pantera Capital Compilation: Lu Jiangfei

Last month, Pantera Capital, a well-known crypto venture capital, announced that it became the first investor in Apollo DAO, which is a new compound income DeFi protocol on the Terra blockchain. We are very happy to work with other strategic investors (such as Do Kwon, GSR, etc.) to provide the necessary funds and guidance for this project, and then help Apollo DAO to a higher level.

In recent months, the DeFi ecosystem on the Terra blockchain has developed rapidly. For example, Anchor Protocol, a high-yield savings product agreement launched in April this year, now has a total lock-up volume of more than 5 billion U.S. dollars; there is also a synthetic stock agreement Mirror, which has a lock-up volume of more than 1.5 billion U.S. dollars; and the Terra ecosystem The fully diluted market value of the reserve asset LUNA Token has exceeded 40 billion U.S. dollars. Just in October, we also introduced to readers Stader Labs (an extended reading “The Staking Market can reach billions of dollars, and the Stader Protocol helps retail investors get the cake “), which is also a brand new staking foundation on the Terra blockchain Facilities construction agreement.

Although Ethereum is still the center of DeFi activities, the developers and amazing value growth in the Terra ecosystem have confirmed that the Terra blockchain is also a successful and enduring Layer 1, although all this seems to be a little accidental.

What is Apollo DAO?

The goal of Apollo DAO is to “bring DeFi to the public”, and its first product is also in line with their mission. This product is based on an automatic synthesizer of revenue on the Terra blockchain, which aims to make it easier for people to participate in DeFi. .

Why can automatic compound interest bring value to investors? To understand this problem, we may start with an example. Let us assume that you are the liquidity provider of the Mirror protocol. If you provide funds to the liquidity pool (for example, in the form of mTSLA), you can get the LP reward of MIR, the native token of the Mirror protocol; however, if you don’t want the MIR generation Currency, but you want more mTSLA and re-supply these funds to the liquidity pool, so you have to manually convert MIR to mTSLA. At this time, you may encounter slippage, high gas fees, transaction congestion, etc. problem.

Imagine if you execute the above transactions multiple times in several different liquidity pools, unless you are an institutional LP or a DeFi whale, you either don’t have enough broadband or patience, or you don’t have enough funds to support it—— And this is precisely where the Apollo DAO automatic synthesis product can play a role.

Users can easily view different income opportunities directly from the front end of Apollo DAO and choose to invest in different liquidity pools . By default, these liquidity pools can automatically recycle profit rewards , thereby reducing the high network fees and other troubles caused by manually executing transactions.

The Apollo DAO protocol also fully considers user-friendliness when designing the interface. Few DeFi protocols are as powerful and intuitive as Apollo DAO (less seen in the Terra ecosystem), and the protocol can even be compatible with mobile devices.

Pantera Capital Partner: Terra Ecological Compound Income Agreement Apollo DAO, the next decentralized hedge fund?

Last month, the Apollo DAO agreement was officially released, and it attracted $200 million in lock-ups in just 24 hours, which undoubtedly shows that the crypto community has a strong interest in the agreement. Up to now, the amount of lock-up of the Apollo DAO protocol ranks seventh in the entire Terra ecosystem.

Does Apollo DAO have native tokens?

APOLLO is the native token of the Apollo DAO protocol.

Currently, APOLLO tokens have two key uses:

  1. APOLLO token holders the right to vote for DAO governance decisions, such as adding a new vault, change the performance fees (performance fee) and other protocol parameters;
  2. Users can stake their APOLLO tokens to get rewards (in the form of zAPOLLO);

In addition, early gold depositors have brought critical liquidity to the Apollo DAO agreement, so they may receive token distribution rewards .

Pantera Capital Partner: Terra Ecological Compound Income Agreement Apollo DAO, the next decentralized hedge fund?

Although the APOLLO token has not yet been fully released, the community distribution work has already been initiated. In the first Community Farming Event event, the contracting parties launched 3 million APOLLO tokens, but they have been oversubscribed. Therefore, the team decided to issue an additional 6 million APOLLO tokens for participants in income farming. If you are interested in participating, you can learn more here .

Pantera Capital Partner: Terra Ecological Compound Income Agreement Apollo DAO, the next decentralized hedge fund?

What is the “War Chest” of Apollo DAO?

“War Chest” is the core element of the Apollo DAO protocol, and it is also an important difference between it and other DeFi protocols.

In short, the “War Treasure Box” is a liquidity pool of Apollo DAO protocol fees, and the size of the liquidity pool keeps growing simultaneously with the scale of protocol usage . By default, Apollo DAO’s “Performance Fee Rate” is 20%, but token holders can change the rate ratio, and most of the fees (99%) obtained by the agreement will be directly used in the “War Treasure Box”— —The other 1% will be donated to charity through Angel Protocol.

Once the funds enter the “War Treasure Box”, token holders can vote on the allocation of funds. By default, the proportion of the allocation of funds is as follows:

  • UST: 50%
  • bETH: 20%
  • aUST: 30%

However, DAO managers can also use these funds in the way they want, for example, they can choose to engage in high-yield liquid mining activities, purchase different encrypted assets, and even buy back APOLLO tokens .

Pantera Capital Partner: Terra Ecological Compound Income Agreement Apollo DAO, the next decentralized hedge fund?

In the future, the “War Treasure Box” will also participate in the “meta governance” of the Terra ecosystem. Since the fund mainly holds assets on the Terra chain, Apollo DAO may eventually become an important stakeholder and participant in governance decisions, similar to an institutional fund , as its development team said:

“APOLLO token allows holders to obtain voting rights and use this to decide how to use DAO, thereby achieving meta-governance. The Apollo protocol will also strategically use this voting power to promote the shaping of a better Terra ecosystem, and then expand to other Ecosystem . Thanks to this voting power, if other protocols want to explore the Terra blockchain, Apollo DAO can be their best partner.”

At this stage, the amount of locked positions in the “War Treasure Box” has exceeded 2 million US dollars.

Future direction

Although the flagship product of Apollo DAO is an automated compound revenue tool, the team already has more ambitious plans for future development.

For example, they are planning to expand to support other non-Terra blockchain DeFi protocol vaults, which may include more complex cross-chain strategies . Of course, such a development plan is also in line with Apollo DAO’s mission to expand the reach of DeFi and make it more user-friendly and less frictional.

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

The long-term vision of Apollo DAO is to create something similar to a decentralized hedge fund. In the initial stage, we will focus on assets on the Terra chain, but we expect to invest in other blockchains soon . The war chest is pledged by It is composed of LUNA and aUST. APOLLO token holders have the right to decide which Terra chain revenue farming opportunities the funds will be deployed to, and they also have the right to decide how to deal with rewards.”

There is no doubt that the vision of becoming a decentralized hedge fund is what makes me most excited about the Apollo DAO project.

In fact, we have seen some excellent teams exploring the concept of “decentralized investment funds”, such as BitDAO and Yield Guild Games, and now Apollo DAO (and its token holders) are also starting to try, hoping they can succeed .

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