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Aptos Trading Set to Go Live—Here’s Why Traders May Be Lining Up to Short It

19 Oct, 20223 min readAnalytics
Aptos Trading Set to Go Live—Here’s Why Traders May Be Lining Up to Short It

The much-anticipated Aptos, a VC-backed, layer-1 solution born from the ashes of Meta’s defunct Diem project, launched its mainnet on Monday. And its native cryptocurrency, APT, is now set to make its debut on the market.

APT is to Aptos what ETH is to Ethereum, or SOL to Solana. The native coin of the Aptos blockchain will begin trading later today on Binance, Coinbase, and FTX. The cryptocurrency will also be available for trading on MEXC, ByBit, Bitfinex, Huobi and OKX starting at 9 p.m. ET on October 18 (or 1 a.m. UTC on October 19).

But a few of those exchanges are launching another APT product. Binance, FTX, and OKX have said that they’ll launch perpetual contracts for APT just an hour after the token starts trading.

Perpetual contracts are a type of futures contract that allows investors to bet on price movements of an underlying asset. To be short on an asset means an investor thinks the price will go down; being long on an asset means an investor is betting its price will go up. And since its launch on Monday, Aptos has faced an onslaught of criticism aimed at the project and its early investors.

One of the biggest sticking points has been that the project’s team waited as long as it did to release information about token distribution, after it had already been leaked online. But once news got out that 51% of the initial 1 billion APT supply is sitting with VCs and another 190 million APIT core developers, the hits kept coming.

It's not great that FTX/Binance etc are all listing Aptos without any tokenomics transparency at all. Surely it should be a prerequisite to listing something that users can have the basic information on what they're buying lol— Cobie (@cobie) October 18, 2022

That’s why there’s been a lot of trepidation about the launch of perpetual options right after the token hits exchanges. With all the negative sentiment around APT and its tokenomics, open interest in options contracts that bet against the fledgling token could become a real-time indicator of how many people are either expecting or rooting for the project to fail.

With standard futures contracts, expiry and settlement happens at regular intervals. That’s true across all types of markets, from commodities, securities, and cryptocurrencies. For example, CME’s micro Bitcoin and Ethereum options have weekly and monthly expirations. That means an investor can bet on BTC and ETH price activity over weeks or months.

But perpetual options contracts have no expiration date. It grants the investor who buys it the right to buy or sell a specified amount of the underlying asset, in this case APT, at a price of their choosing.

On Tuesday morning, crypto reporter Colin Wu said on Twitter that the Aptos team has been trying to persuade Binance, which is an Aptos investor, to wait two weeks before launching its perpetual APT contracts, presumably to avoid shorting and downward pressure on the price of APT. Wu, however, provided no evidence or sources for his claim.

Exclusive: Aptos asked major exchanges not to list perpetual contracts within 2 weeks, but Binance announced that APTUSDT perpetual contracts will be listed on October 19th. Aptos is urgently persuading Binance to stop. — Wu Blockchain (@WuBlockchain) October 18, 2022

As the day went on, FTX and OKX announced plans to launch their own perpetual contracts at the same time as Binance. Both Binance and Aptos declined to comment when contacted by Decrypt earlier today.

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