Hello, Satoshi clubbers Another AMA took place in Satoshi Club and we would like to introduce to you the AMA session with our friends from APOLLO Protocol and our guest was Ashwin Somasundaram, CEO/Founder of Apollo Protocol . The AMA took place on 16 February.
The AMA session was divided into 3 parts with a total crypto reward pool of 1000$
In this AMA Recap, we will try to summarise the most interesting points for you.
Part 1?—?introduction and questions from the Telegram&WebSite
Mary | Satoshi Club:
Hello Satoshi Club! We are happy to announce our AMA session with Apollo Protocol! Welcome to Satoshi Club
D. | Satoshi Club:
@ApolloCEO hello! welcome to Satoshi Club!
Ashwin Somasundaram:
Thanks for having me! It is an honor to be here
Mary | Satoshi Club:
Tell us please about your way to crypto and about Apollo Protocol more
Ashwin Somasundaram:
So my name is Ashwin Somasundaram, I am the CEO/Founder of Apollo Protocol. I have a nontraditional background as an Assistant Professor of Medicine, Medical Oncologist by practice, and physician-scientist focused on systems biology and tumor immunology. I have a longstanding interest in blockchain adoption for fundraising and healthcare integration. I have been involved with systems based model development and advocacy for other projects in the space. We wanted to build a volatility solution and this led to the conception of Apollo Protocol which evolved into what we are going to discuss today.
Mary | Satoshi Club:
From medicine to crypto
Ashwin Somasundaram:
Blockchain technology is really a passion project stemming from my systems/computational research background
The long term vision of Apollo and our lending platform DELPHI is to have branches that aid in decentralized charity and healthcare integration.
Mary | Satoshi Club:
Understand you
when did you get an idea to create Apollo Protocol?
Ashwin Somasundaram:
But to get there we need a better volatility solution in the space…
We have been working on Apollo for under a year but we have had many iterations of it. The space is constantly evolving and we are at I believe version 4 by the time we launch. Fortunately nothing is wasted and the existing projects/codebases can be utilized in the future for other platforms and ideas. However we have BRILLIANT advisors in the algo-stablecoin and defi lending space.
Mary | Satoshi Club:
4th, incredible, it should be perfect version
Ashwin Somasundaram:
We hope so, but even now we are constantly perfecting it
Fortunately it is self-governing and our amazing community will also help guide us post-launch!
Mary | Satoshi Club:
Can you name them?
Ashwin Somasundaram:
I cannot name all of them given some of them have conflicts of interest but let us say they have been heavily involved with each of the major algo-stablecoins and proto-seigniorage tokens. Beyond that we have Jeff from trustswap and Nick Fett from Tellor and the wonderful folks at Zokyo who have been in the space since 2013. There are many more we cannot name at this time
However, everyone should feel free to look at our backers on our website and that will provide some additional insight.
Mary | Satoshi Club:
Yes, Jeff and Nick are great guys! You should be happy to have them
Ashwin Somasundaram:
Our new updated website will be up today
Mary | Satoshi Club:
If i will ask to describe Apollo Protocol in one sentence what it should be?
Ashwin Somasundaram:
It has been under construction for our dashboard so the current site is a placeholder and needs some updates
Long term: a decentralized bank.
Short term: the gold standard of a stablecoin.
Mary | Satoshi Club:
Thank you, Ashwin for your intro! Do you want to add something or we can go to the questions from our community?
Ashwin Somasundaram:
The statement I made describing it is ambitious to say the least, but without context that is the purpose
Mary | Satoshi Club:
Sure, you have a lot to tell us!
Ashwin Somasundaram:
I usually spend this time doing a history lesson on what flaws exist in the space and how we address each of them. In lieu of that I would simply say that Apollo protocol is not a single token that solves all the issues of USDT, DAI, USDC, AMPL, ESD, etc. but an interconnected ecosystem that is fully collateralized, incentivized, decentralized as a stablecoin. From there I am happy to go into questions
Mary | Satoshi Club:
Thanks! We will have a long discussion from here
a lot of questions incoming!
D. | Satoshi Club:
Q1 from Telegram user @Gutike95
If there really is a solid stable currency like the Theter (usdt), why develop another decentralized stable currency? What are the problems that Theter has that Apollo solves?
Ashwin Somasundaram:
Excellent question! USDT has had multiple issues with being SEVERELY undercollateralized. Some reports say up to 73%. It is essentially backed by nothing. Therefore there is an inherent flaw to that system, a lack of transparency and trust that is growing. There is also a lack of incentive. How many people are buying tether to invest? How many people can buy a home with tether or are obtaining a mortgage or financing an auto-loan?
Mary | Satoshi Club:
Really? Not sure that a lot
Ashwin Somasundaram:
Why has DeFi not fully adopted USDT for real world applications. These are issues plaguing stablecoins and DeFi that still need to be addressed and should have ideally been solved by the giants in the space by now. A big barrier is regulation and legitimization of the space.
Mary | Satoshi Club:
That’s true
And you will solve it?
Ashwin Somasundaram:
We have done everything in our power to ensure we have a protocol that would be most appealing for SEC approval and registration, along with the roadmap to obtain a bank charter (12–20 mill USD necessary) followed by a mortgage lending license or partner. This long term goal of real world lending seen with USD fiat bank vaults that will collateralize our 1:1 stablecoin will provide long-term investment and real world use case.
D. | Satoshi Club:
No one, but people used to use Tether, don’t you think that it will be tough to ‘sell’ them another stable? they will use it until it fall
Ashwin Somasundaram:
To get there we use our Apollo Growth coin (AOX) as a vehicle for growth that has both an initial hedge against inflation as a synthetic asset and as a future collateralized real world hedge fund as our stablecoin is more established.
Mary | Satoshi Club:
When approximately do you expect to get SEC approval and registration?
Ashwin Somasundaram:
Absolutely, it will be tough until people see the usecase, Apollo protocol is a proof-of-concept that if proven correct disrupts the entire space. USDT would be irrelevant if any other stablecoin has growth incentive (people buy it and see returns) while also having a faithful and collateralized peg.
It takes 3 months minimum and we have been ensuring that the protocol is compliant with the registration process. This is why we ensured such a lean raise and so much decentralization.
Mary | Satoshi Club:
Got it! Hope everything will be approved!
Ashwin Somasundaram:
The SEC approves of DAOs and forced decentralization, small raises without excess that does not abuse investors.
Beyond that we will also need to ensure we can transition from USDC (likely the best centralized stablecoin in our opinion) to true USD fiat vaults to fully collateralize our stable coin.
Mary | Satoshi Club:
You know for me this two words SEC and decentralization in one sentence always sounds like a nonsense, but i understand that we need something legal
Ashwin Somasundaram:
Precisely
Legitimization and regulatory approval of defi is still missing and will be necessary before we obtain real world adoption and surprisingly this requires grass roots small projects to achieve which is counter-intuitive in my opinion. However, if we can even establish the model as successful as a proof-of-concept, then this has high disruptive potential.
Mary | Satoshi Club:
Q2 from Telegram user @RosemaryBianco How does Apollo achieve “stability through exponential growth”? How do they grow exponentially? Do they really achieve adequate stability?
Ashwin Somasundaram:
Brilliant question! We have a growth coin known as Apollo Growth (AOX) that is a weighted basket of assets based upon volatility (our good friends at MAHADAO have ARTH similar to this) however it utilizes no collateral in the beginning and introduces it as the project grows until it is fully collateralized (this is similar but not the same mechanics as the brilliant project FRAX). Eventually this seigniorage token becomes the “on-ramp” for growth in the ecosystem and absorbs volatility as well while feeding into the vault that collateralizes the Apollo stable coin (AOY). An apt analogy is that the high-risk/reward scenarios of Apollo Growth feed act as a casino short term and collateralized world wealth index hedge fund long term all while feeding into our decentralized bank that is Apollo Stable. It would be as if a bank and a hedge fund are owned by the same entity and create positive feedback loops with each others usecases.
Mary | Satoshi Club:
Where this mechanism described fully? Do you have any articles?
Ashwin Somasundaram:
There is the Apollo Shares token that acts as governance and a stock share to invest in the ecosystem as a whole as it grows as AOX/Apollo Growth has high growth potential but a SIGNIFICANT amount of expected volatility.
We certainly do! We will also have a simple video outlining this being release TODAY! It will be in our announcements channel.(https://t.me/ApolloAnnc)?—?These files are more detailed than the article and the video but are helpful. And of course we are available in our telegram (https://t.me/ApolloProtocol) 24/7 to answer questions
Mary | Satoshi Club:
Q3 from Telegram user @sirdefi Apollo Protocol has 3 tokens: one that holds the maximum stable, the other to absorb all the volatility of the market, and the third token acts as an intermediary. Can you please explain to us how each one works? Mostly I would like to know how they relate to each other to fulfill the goal of providing stability and preserving the value of our money.
Ashwin Somasundaram:
Great question! Apollo Stable (AOY) is the gold standard. It is fully collateralized and faithfully pegs in the contract to USD. This USD is in fiat bank vaults. The only growth is to buy more through out dApp and our fiat on/off ramps (roadmap item) and through the growth of our ecosystem through Apollo Growth. Apollo Growth (AOX) feeds the ecosystem short term. Initially it is a synthetic asset that hedges against inflation better than fiat.
Mary | Satoshi Club:
Which banks? Can you describe how this vaults are made? Because for today it was always behind closed doors for me
Ashwin Somasundaram:
Philosophically speaking it has always been silly to me that we call coins pegged to FIAT as “Stable”. The USD is severely inflated and is no longer backed by precious metals and off the standard since Nixon. However, It is backed by the economic buying power of the US government. That is the key. This is why we needed Nick Fett at Tellor and his expertise as a research economist with the US bureau of labor stats and our COO who worked in volatility research. This led to the concept of initially creating a synthetic asset that was weight for volatility AND pegged to world economies. That is the true value we should capture if we are looking for “stability”. NOW, relative to the USD, this basket of assets will appear VERY volatile but in reality a volatility weight basket of GDPs, diverse highly used fiats, and highly trade commodities/metals is a better store of value. Short term this volatility incentivizes growth INTO the ecosystem. As Apollo Stable grows and DELPHI our lending platform and bank are established with their usecases proven then we can revert to collateralizing Apollo Growth and now this synthetic asset turns into a real world wealth digital index hedge. This way you can have an incentivized digital stable asset to USD and a true hedge against the inflation of USD in the same place with the same fiat ramp. This can be utilized by laypeople as we build our lending platform DELPHI. This is because it will have FAR lower interest rates than traditional banks for auto loans and mortgages while providing greater APY and returns than traditional savings accounts. This leads to real world adoption of DeFi and should be the goal of EVERYONE in the blockchain space right now
Mary | Satoshi Club:
Q4 from Telegram user @Wormz28 I have read that APOLLO’s long-term vision is to provide decentralized loans and in the Roadmap you’ll be launching soon DELPHI as your collateralized DeFi lending platform. So may we know in advance how’s the process of your lending program and how it works? Also if possible, can you explain in advance what DELPHI is and what important role it will play in your ecosystem?
It’s a bit covered before
Ashwin Somasundaram:
Delphi would be a competitor and collaborator for projects like AAVE
Ashwin Somasundaram, [16.02.21 16:50]
HOWEVER it is not in the lending of blockchain but in real world finance that it will also extend to. That is the goal that expands upon it. This is why regulatory approval is so important and why we fight so hard to remain so compliant.
Mary | Satoshi Club:
When it will be available?
Ashwin Somasundaram:
It will require:
- $24mill in AOY USDC collateral
- SEC approval and registration (3 months)
- Bank charter (surprisingly not too bad with the above)
- Mortgage lending license/partner
- validated fiat on/off ramps
Mary | Satoshi Club:
So, min 3 months?
Ashwin Somasundaram:
A bit ambitious but we have given ourselves 1.5 years as there is a lot of red tape, but we will push non-stop to get it done in 3 months if possible
Mary | Satoshi Club:
Mortgage lending/lisense partner?—?did you already find this partner?
Ashwin Somasundaram:
We have a group in mind but this is not official.
Mary | Satoshi Club:
Q5 from Telegram user @konditer_rolex Apollo Growth is tied to a new, weighted basket of diverse stable assets, including the 7 major fiat currencies, the GDP of the 7 richest countries, and 7 highly traded commodities. How do you hedge against a sudden swings in commodity prices, or a financial crisis in one of the countries in the basket? How stress-resistant is this approach?
Ashwin Somasundaram:
Perfect! This is where the volatility weighted system comes into play. It takes into consideration the growth/decay over the past year along with the std dev relative to the mean over the last year and normalizes to itself. For example, some VERY volatile assets like copper have a far lower weight than the more stable GDP of Germany for example. I will attached the PEG calculation below: [ File : 2021.0124 AOX Peg Calculation and API.pdf ]. Now, EVEN if the TWAP swings like mad we can create debt cycles in the peg factor through governance approval so if we need to recover from consecutive negative rebases the systems can temprorarily adjust peg for positive cycles driving the price up and resetting the peg factor. These volatility factors are also updated yearly while the peg is updated monthly as necessary
Mary | Satoshi Club:
The s mechanism that you’re using for hedging is it yours or it was used before?
Ashwin Somasundaram:
The concept of using a basket of assets and a non fiat peg has been around since the xBTC days. ARTH with MAHA has a great take on it for proto-seigniorage in our opinion. Adding the GDPs as the true backing, the volatility weighting and the current feed-forward mechanism are more novel to our ecosystem. I believe the long-term collateralization is the real beauty of it
Mary | Satoshi Club:
Gotcha, it’s real beauty
thanks! Ready for the 6th and last question from this part?
Ashwin Somasundaram:
Government debt/bonds, multiple fiats, and commodity shares held in vaults by ratios and backing the digital asset.
Absolutely!
Mary | Satoshi Club:
Q6 from Telegram user @Brainchest I read that KYC is required. But I didn’t understand, it is required to purchase any of AOX, AOY, AOZ or just for AOY. And how will you distribute the coins, because on many exchanges if personal trading is 1–5 BTC, the KYC is not required?
Ashwin Somasundaram:
KYC is only for pre-sale which has conclude and severely oversubscribed
We oversubscribed 8 FOLD in 15 minutes and the recent IDO oversubscribed 3 fold in seconds. Buying/selling AOX, AOZ on uniswap requires no KYC. Buying AOY on our platform or using it requires no KYC on our part.
Mary | Satoshi Club:
Ahaha, now pre-sales are so fast
Ashwin Somasundaram:
If you want to use AOY to get a mortgage and buy a house, that will require KYC…
Mary | Satoshi Club:
For Delphi platform will it be required?
Ashwin Somasundaram:
Only for real world applications. One cannot obtain a large loan anonymously, however assets for lending can be done without KYC
Mary | Satoshi Club:
So, on blockchain we will still be anonymous
Ashwin Somasundaram:
Correct. The reason this is not possible is because the pink slip to a car or the deed to a house through escrow is not anonymous. However, it can all be confidential where the DELPHI platform and the team have no knowledge but the escrow service must know. So while Apollo/Delphi does not need to know, the entity holding the asset until it is fully paid will need to know.
Mary | Satoshi Club:
Yes, escrow has to know everything
Ashwin Somasundaram:
The trade off is that the interest rate paid for such a loan would be a fraction of traditional finance essentially disrupting all central banks in theory. And people providing capital for such loans through holding AOY as a savings account receive far more APY than traditional banks.
Mary | Satoshi Club:
Yes, APY in crypto is one of the best parts
Ashwin Somasundaram:
Through the proper fiat ramp channels the blockchain aspect is in the background allowing for laypeople to use Delphi as they would any central bank. The APY for digital assets however is another story and is naturally massive. This will likely require an additional entity in the future so as to prevent flash loan attacks affecting the rest of the ecosystem. There is also a way to use AOX to prevent the flash loan problem but that is a theory for another day and we need to test it before I can say anything.
100%, regulation has always been the barrier and it must be done from the ground up. It might be too late for some of the giants of the DeFi lending space
Mary | Satoshi Club:
Test it, we are tired of this attacks, they are annoying and really bad for DeFi sector.
Ashwin Somasundaram:
100%
Mary | Satoshi Club:
Yes, but it will prevent thus in the future.
Thank you for your answers! It was a great discussion, we enjoyed it very much! But our users are waiting for live part and we should give them opportunity to ask their live questions! Ready?
Ashwin Somasundaram:
Absolutely!
Part 2?—?live questions from the Telegram community
Q1 from Telegram user @ Memo
The blockchain volatility solution developed by Apollo, can it only be implemented in stable monchain? Or could it also help other coins and tokens to minimize their volatility in the market?
Ashwin Somasundaram:
We have farming pools specifically to aid other coins minimize volatility.
Q2 from Telegram user @ Topind
Do you have any plans to Launch a native token and will you list it in coinmarketcap?
Ashwin Somasundaram:
We have friends at CMC and CG working on the listing and addresses as we speak and we will launch on uniswap later this week
Specifically AOX and AOZ. AOY will later be on our dApp and then we will wrap it for other chains and CEX. BSC will be launched a fews after the ETH launch this week.
Q3 from Telegram user @ Super-Girl Says
From a practical point of view, what is the difference between USDT, DAI and AOX? Both are tied to USD at the end of the day. which one is better then?
Ashwin Somasundaram:
USDT is undercollateralized and centralized.
DAI is overcollateralized at times but undercompensated with issues with liquidity where MKR has asked to introduce additional USDC to “help out”
AOY is decentralized, fully collateralized, fully compensated, faithfully pegged, incentivized for growth (unlike USDC which has fiat just sitting there). If Delphi succeeds as a proof-of-concept and has even a little bit of mainstream adoption then without a doubt AOY.
Q4 from Telegram user @ Hakeem
If USDT is essentially backed by nothing, what then is Apollo backed by?
Ashwin Somasundaram:
AOY is backed by literal USD in fiat vaults. You cannot mint more than what would physically exist as USD paper. I am philosophically opposed to this idea but it is ideal. AOX is initially synthetic BUT after Delphi AOX will start to be collateralized by government bonds, gold, silver, copper, commodity shares, multiple fiats all in physical bank vaults with supply dependent on this and growth cycling to collateral.
Q5 from Telegram user @ Lonely Day
What is your plans for global expansion,on building and developing or getting customers and users, or partnerships?
Ashwin Somasundaram:
We have proposals and meetings with the top projects in Asian markets, fiat ramps and defi identity. These are not official partnerships but collaborations, meetings, and discussions so names will not be used but it should be clear who they might be.
Q6 from Telegram user @ Johnny
Hello Ashwin. You have 3 tokens $AOX, $AOY and $AOZ. I know AOY is your stablecoins while $AOX is the growth coin. But of what use is the third token $AOZ and what role will it play as you intend to expand from Ethereum into BSC after launch?
@ApolloCEO
Ashwin Somasundaram:
GREAT question! AOZ acts as a stock share and a governance token but also a bridge between ecosystems as we go from ETH to BSC and likely in the future to many other chains ideally such as DOT, ADA, thorchain, etc. The AOX is vertical growth and AOZ is horizontal growth.
Q7 from Telegram user @ Karoceh
Why isn’t Apollo Stable (AOY) just pegged to gold? We know that gold is safer from inflation rather than USD. Why did Apollo prefer USD over gold?
Ashwin Somasundaram:
EXACTLY! You are correct! AOX will be pegged to gold AND other better hedges that silly USD alone. That is why philosophically AOX is a better hedge and more “stable” than our “stable coin” AOY which is collateralized only by physical USD fiat.
Q8 from Telegram user @ Tuvalunia
How will the rebases be performed, in what way and what period?
Ashwin Somasundaram:
30 minute epochs.
Q9 from Telegram user @ Super-Girl Says
What is the best Apollo token to be holder of?
Ashwin Somasundaram:
AOZ is to hold and maybe farm or provide governance. AOX is to risk in the short term for high-risk/high-reward plays such as locking and staking. AOY is for financial institutions and laypeople, or for you if you want a savings account with better APY than your current bank (I forgot to mention another roadmap point is to ensure each vault has its own FDIC insurance).
Q10 from Telegram user @ TRON TRX
Security & User Interface are the Most Important Aspect that Users see on a platform. How has Your Project worked on this? Is Platform suitable for Newbies in the crypto world?
Ashwin Somasundaram:
[ File : Player’s Guide.pdf ]
We have gamified our project for AOX and AOZ and we have created a simple gamified guide for playstyles AND for the dashboard that we will go through before launch:
Part 3?—?Quiz Results
As usual, for the third part, Satoshi Club Team asked the chat 4 questions about the crypto project. A link to a Quiz form was sent into the chat.
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