No cryptocurrency or token has risen more in the past day or week than Aptos, according to CoinGecko.
The native Aptos blockchain coin, APT, has more than doubled in price in the last seven days and is up 47%, to $18.46, in the last day alone. Since the beginning of the year, Aptos has skyrocketed 350%. Why?
It’s hard to pin down a precise reason, but data shows that about half of the $2 billion APT volume in 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 is almost $0.50 more than what is being sold on Binance and most other exchanges and a sign that at least some of the activity is coming from arbitrage trading. Simply put, arbitrage traders profit from price discrepancies. 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 Prosecutor’s Office opened an investigation into illegal remittances worth 2 billion Korean won generated by arbitrage merchants taking advantage of them.
It is also worth noting that while Aptos is still only the 20th largest DeFi ecosystem, according to DeFi Llama, it has grown significantly in the last month. DeFi volume in Aptos went from $14 million last month to $51 million in January, and the month is not over yet.
Growth in Aptos trading volume on decentralized exchanges. Image: DeFi Flame
Another 10% of the APT volume in the past day came from Binance’s APT and Binance USD (BUSD) trading pair. Binance, the world’s largest cryptocurrency exchange by volume, also recently introduced two APT liquidity pools, which now account for another 18% of APT trading volume.
Liquidity pools fuel peer-to-peer trading of crypto assets. Users are incentivized to “pool” or deposit their tokens so they can be traded with other users. They are essential for decentralized exchanges, such as Uniswap and Curve, to work. But centralized exchanges like Binance use them too.
On January 20, the Binance Liquid Swap platform debuted its APT/Tether and APT/Bitcoin liquidity pools. The platform rewards users with BNB, the exchange’s utility token, for depositing funds into pools.
As of this writing, Binance promises a 92.42% return on APT/USDT and a 99.49% return on APT/BTC liquidity pool deposits. Of that, users would receive 0.71% and 1.07% BNB rewards, respectively, paid hourly.
Aptos has consistently outperformed the market since the beginning of the year. But he got off to a rocky start when his main network released in October.
The project received a lot of criticism for not releasing its tokenomics sooner than it did. Criticism mounted when 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 it was a sign that “the network was down before the projects came online.”
Aptos’ backers include many of the venture capital firms that have become industry mainstays: Andreesen Horowitz, Multicoin Capital, Jump Crypto, Tiger Global Management, Blocktower Capital, and Coinbase Ventures. And in the lead up to its launch, the project closed 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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