Current Strategies

Strategies for APT traders, market-makers, and LPs on AthleteX

APT Trading Strategies

APT Traders with reasonable knowledge on how athletes perform in their games have two methods to take a position on an APT:

1. Buy an APT directly from the DEX

2. Mint an APT Pair and sell the unwanted APT Long or Short on the DEX

Market-Making Strategies

Market-Makers are typically concerned with earning profits based on a risk-adjusted position. This means a market-maker would probably not take exposure to an athlete's performance. Instead, the market-maker would generate commissions on their liquidity through the DEX and arbitrage the difference between market price and book value. Market Makers can perform open market operations through the DEX to buy APTs when they are under book value and sell APTs when they are above Book Value. Here's an example: Currently the collateralperpair is set at 15,000AX for each APT Pair. Let's say Carlos Correa Long APT is trading at 2,500AX on the DEX and Carlos Correa Short APT is trading at 10,000AX on the DEX. The Market Maker could buy 1 Carlos Correa Long APT and 1 Carlos Correa Short APT for a total cost of 12,500AX. Then the market-maker could burn the APT Pair and redeem 15,000AX from the LSP contract. On this trade, the market-maker spends 12,500AX and receives 15,000AX thus earning a profit of 2,500AX.

LP Strategies

LP strategies are available to APT traders and Market-makers. When an APT trader takes a position on an athlete's performance they are unhedged. By providing liquidity to an APT-AX market pair, the trader hedges their position on the athlete's performance. The AMM does this automatically by selling the APT as the market price goes up and buying the APT when the market price goes down. In addition to the hedged position, the trader earns LP fees from others trading that on the DEX.

Market-Makers who do not want exposure to an athlete's performance could earn commissions from a 'stable' strategy. By providing liquidity to an APT Long-Short Pair on the DEX, the market-maker has a net neutral position on the APTs and earns LP fees without any exposure to the Long or Short APT. This strategy is useful to those who want to earn LP fees without taking risk on how the athlete performs.