Apricot - Let Common Users Earn Liquidation Rewards Passively
Apricot is a lending and leveraged yield farming protocol on Solana, which was launched on October 9 and has not issued any token yet. It offers three products: Apricot Lend, X-Farm, and Apricot Assist. As of December 30, 2021, Apricot's total deposit volume is around $280.39m, the total borrowing volume is around $89.02m, and the coverage ratio is about 314.97%.
Apricot Lend is a decentralized money market similar to Compound. The protocol enables users to deposit assets to earn interest or deposit to borrow.
The market features a low liquidation penalty ranging from 0.5% to 1%. The table below shows the penalties for each asset on the testnet (for reference only).
Apricot Rescue is a special liquidation mechanism of Apricot. More specifically, Apricot guarantees that all satisfied positions will be liquidated within two hours. Usually, the liquidation process is triggered by arbitrageurs in the market. In terms of Apricot, if the arbitrageurs do not clear the position in time, the platform will do the liquidation by itself.
As Apricot grows to a sufficient scale, it plans to introduce a bad debt processing token called COT. When there is a bad debt that cannot be processed in time, the platform would purchase the collateralized assets at a discounted price and issue COT, thus, the value of COT is backed by these collaterals. In other words, holding COT enables normal users to enjoy the profit of liquidation which is mainly controlled by the professional arbitrageurs in other lending markets.
X-Farm is a leveraged yield farming product based on Apricot Lend, in which users can deposit assets as collateral to borrow funds and then participate in yield farming. First, users can earn the interest rate and yield farming rewards at the same time. Second, users can borrow up to 3x of the collateral to add leverage on its yield farming position. For example, user A deposits $1000 SOL on Apricot as collateral to borrow $1500 USDC and $1500USDT. Next, uses the entirely borrowed tokens to participate in yield farming.
Compared with conventional leveraged yield farming, X-Farm does not require users to supply the underlying assets (USDT/USDC in the previous example). And there is no need to trade one token for another, which avoids slippage loss. Further, users can even deposit LP tokens as collateral to borrow funds.
Apricot Assist is designed to provide automated self-deleveraging service for users. When users' collateral ratio hits a preset volume(Trigger Level), the system will redeem part of the LP tokens to repay users' debt. And the process will stop when users' collateral ratio goes back to a preset target ratio(Target Level).
Following the previous example, user A sets his/her Trigger Level at 95% and Target Level at 90%. Once the collateral ratio hits 95%, the system will redeem X amount of USDT-USDC LP tokens back to USDT and USDC, and repay the corresponding debt to get back to 90% (collateral ratio).
The protocol will charge 20% of the borrowing interest rate and 20% of the farming earnings (performance fee) as protocol fees. Besides, when a user borrows a token for which they already have a deposit position, there will be a one-time charge fee (0.075%).
Apart from COT, there is a tradable platform token, APT, that is used for community governance, user incentives, reserves, and collateralized mining. COT holders can also participate in the community governance, and have greater voting weight than APT holders.
The total supply of APT is 1 billion, and the vesting plan for APT is shown below.
- Apricot completed its seed round of financing in June 2021 with an amount of $800,000. Investors include Chris McCann (an early seed investor of Solana and FTX), Genblock Capital, NGC Ventures, DFG, CMS Holdings, CryptoJ Capital, Coinsights Ventures , Double Peak Group, LD Capital, etc.
- In August 2021, Apricot announced the completion of $4 million. Investors include Delphi Ventures, Lemniscap, Solana Capital, Komorebi DAO, SkyVision Capital, Advanced Blockchain AG, Bixin, CryptoJ, Ledger Prime, Struck Capital Crypto, Valhalla Capital, a41 Ventures , MXC, Gate, GSR, Solar Eco Fund, Coinsight Ventures, Global Coin Ventures, Smrti Lab, Darren Lau, Zhuoxun Yin, Jeff Kuan (Terra), Matt Cantieri (Anchor Protocol), Nick Tong (Perpetual Protocol), etc.