APEX Community AMA with Jimmy HU, CEO

Dear APEX Community,

First and foremost I’d like to apologize for the delay of the AMA release — I’ve caught a rather bad flu for a week or so and was dysfunctional both physically and to a certain degree cognitively during the episode, and just seemed to fully recover yesterday. We’ve missed the video AMA with Brad, but I thought this may be a good opportunity to provide a more comprehensive written version.

The community management team has carefully gone through all question submissions and selected the most commonly asked, relevant, and significant questions, some of which were manually rephrased or optimized. Before I dive into answering these questions, I’d like to acknowledge the market condition and sentiment — for most people who were not among the earliest entrants into the blockchain/crypto market, recently is perhaps what I would consider to be the lowest abyss. Skepticism and uncertainty is prevalent as the main sentiments at this point in time — only with patience, discernment, and time can one really tell who and what prevails.

How many Enterprise customers are currently piloting on the testnet? 20 as pre-announced? Who are these and how did it perform so far? What info can we expect? Long ago it was said that more info would be released around testnet completion.

For enterprises that were pre-arranged to participate in the pilot program, they are required to go through the onboarding process which typically consists of 5 steps: 1) based on preliminary interest and high-level use case, determine participation status in the pilot program — 2) detailed outline/spec of initial business objectives and use case, as well as ultimate test KPI/metrics to measure success — 3) technical implementation from our end to deliver initial pilot MVP — 4) business-side implementation and use — 5) report conclusions and review. Obviously, around 20 enterprises have passed step 1 which is confirming participation, but as expected, the coordination of internal resources (on the enterprise side) to support the progression through the 5 steps could be limited or slow at times. Currently 6 enterprises are at step 2 and 2 have reached step 3.

What we did not expect was the cautiousness of the enterprises in publicly disclosing anything that has to do with experimenting with blockchain or crypto-related endeavors — most of them have the attitude of needing to be 80% sure of either long-term strategic value or 100% sure of production-level implementation in order to be willing to release news surrounding it. In hindsight it makes sense as these enterprises are typically large multinational brands or public companies that have strict PR policies. To balance this, we are exploring opportunities to work with smaller and more agile tech and internet companies as well, which are far less conservative in this regard.

Other than that there are exceptionally high early adoption indicators from electric car companies and the automotive industry in general, from market feedback on the APEX blockchain as well as our very own pilot program. Retail and travel come next, and financial services rank last. Also note, that initial pilots are the China or APAC (Asia Pacific) Branch of multinational companies or local Chinese corporations so adoption speed, and relevant characteristics and attitudes may differ from what you would expect if we targeted global or North American/European HQs. The latter we will definitely explore in the future but China HQ is a good and convenient starting point.

Companies usually go bankrupt because of lack of funds, but can also go bust by growing to quickly. My question is how does Jimmy ensure that the explosive growth within APEX is stable and steady in reaching the companies milestones?

This is a good question and one that I haven’t had the chance to elaborate on. The good thing is that there’s a big difference between most other blockchain projects and APEX Network, namely that the source of funding goes beyond funds initially obtained from token-based fundraising. As a corporation with a revenue generating business and solid capital backing, we are capital wise much more diverse with multiple streams of cashflow. In other words, this ensures longevity and continued development of the blockchain technology and initiative.

Could you please explain one typical use case of Apex blockchain and its implementation, but be specific — for a particular (could be imaginary) customer, what concrete action will he require from the chain, what will be the benefits compared to his current approach he’s using. What will be the requirements for him to migrate to the blockchain solution. Describe all this in a real world (real process states) example.

I will use a real pilot enterprise case as an example (though I’m not at liberty to disclose the name). In the case of a large leading budget airline company (think Southwest Airlines in the US) that does not use OTA (online travel agencies like Orbitz or Ctrip) to sell to customers and only sells direct through its own website and apps, customer relationship management (CRM), increasing engagement, and personalization is criticial — in fact, the business hinges upon loyal customers with a long customer lifecycle.

In this scenario implementing a use-case focused (not general purpose) blockchain technology (in this case APEX) can help in two regards 1) increasing loyalty through connected loyalty points programs 2) enhancing data-quality and diversity for analytics and AI. For loyalty points, we would tokenize existing loyalty programs, and the first step would be to make corporation-level loyalty points interoperable with asset-like characteristics — most common example is to make loyalty points of main and subsidiary companies in a conglomerate all swappable based on a DEX-protocol, which is a win-win for all subsidiary companies. Second step to take is to extend the loyalty asset interoperability across external corporate alliances, say in the case of an airline it can cooperate with hotels, travel agencies, and car rental companies, creating cross-sell and engagement opportunities which is a win-win for all the parties involved. For travel companies, data-driven intelligence and decision making using predictive analytics and emerging AI technologies is also becoming increasingly important. One way to enhance customer datasets is to create a blockchain protocol combined with the tokenized loyalty incentives that allows the travel company to, with the consumer’s permission, access a larger amount of data-dimensions in return for loyalty points/tokens.

The latest development update talks about optimizing the seamless backend integration of enterprises using NEXUS and iQ into Apex Network. a couple of questions in this regard; 1) How soon after mainnet launch to you expect the first few enterprises to be integrated this way — are we talking weeks, months, years? / 2) Do you believe you will be able to announce some of these to make both the community and the wider crypto market aware, or will it be silent integration? / 3) If it is silent integration, how will the community be able to know this is happening — are there metrics, dApps etc they can stay up to date with?

First, I’d like to say that integrating APEX Network with existing technology products NEXUS and IQ is not a technically difficult task and can occur quite easily. In fact, the UI/UX and the frontend development for the integration has already been done since mid last year. Real implementation occurs when an enterprise user gives us go signal to do so in the backend of their NEXUS implementation, and I predict the earliest of which would occur in the next couple months.

As for the community and crypto-communities being aware of product-level integration, I don’t see any problem in the near couple of months. In fact, we most likely will even be able to “show” the integration via screenshots, videos, or live webinars.

Hotbit, which is the most recent listing initiated by the team, is also the exchange the community most frequently complains about. Issues are stuck transactions, massive fake volume, slow customer service and that it seems impossible to get an order filled there. For all its faults and manual withdrawals even Lbank seems somewhat better than this. Do you expect this exchange to take over where Switcheo left off when they delist us, or will token holders be provided a new and better avenue for exchanging our tokens? Is liquidity considered not important at this stage of the project — if so it would be good for token holders to know, and to know how far into the future this is expected to change?

The issues with Hotbit are recognized and relayed to their team in a timely manner. We’ve had in-person meetings with their core team at the Shanghai-HQ, and they are an ambitious and growing team looking to climb up in the next generation of newer exchanges.

Upon mainnet launch, we are looking to delay the token swap until at least one new exchange avenue is found (technically enterprise users do not need the swapped version of the mainnet coin to start the adoption process). This means we will be exploring new exchange options, especially in the midst of certain prominent exchanges having adjusted their fee policies and structures.

Considering that an enterprise client, wanting to run a sidechain, is obligated to run a supernode and thus acquire 2M CPX; How will it be able to do so in a timely and cost efficient manner with the current poor real liquidity options out there (Switcheo, being the preferred choice atm whilst it will delist CPX once it does its tokenswap with the mainnet). How does the team plan to facilitate for example 5 enterprises wanting to simultaneously buy 2M CPX each on small exchanges with an average real liquidity of a couple of thousands of dollars? Putting buy walls won’t work as people will put buy orders on top of the company orders as they expect the price to go up, furthermore sellers will be cancelling their sell orders as they expect the same thing, thus the situation resolves into an inflated price and companies having to wait endlessly for their orders to fill or pay way more than what is reasonable.

First, I would like to mention that excess demand regardless of in what fashion is not a bad problem to have. Enterprises are very unlikely to use the method of exchange buying to fill their staking requirements. What typically will happen is the tokens will be bought via a software license contract or data acquisition contract, something that the IT, data, or marketing department can expense. We will then contract a third party contractor to collect the exact token amount through various different avenues, and this can happen through buys spread across exchanges and OTC. With regards to OTC, this will not involve APEX Network CPX holdings.

How much of the funds have been secured in fiat? What % of funds have been used so far?

Currently all token fundraising funds from the past have been fiated out, though I can say that the timing was not ideal but wasn’t the worst either. A good portion of initial funds are with our market maker who at one point until now holds all CPX (in other words we have bought over 50M of our own tokens over time). Most importantly, as I mentioned in one of the questions above; in the long-term, token fundraising funds and remainders are irrelevant as we have additional capital streams to ensure longevity and continuity of the development of the project.

How is the sentiment of the Chinese government and Chinese companies regarding crypto and crypto companies and has it shifted to a more positive outlook since almost 1,5 years ago? Is there any impact on testnet pilots / marketing / general project execution?

The Chinese government has a rather clear stance on crypto — it is pro blockchain technology for creating value in the economy and business but does not view cryptocurrencies as positive. It has recently released new regulatory frameworks that are putting additional requirements on blockchain technology vendors that further tightens the compliance aspect. So to answer the question, the outlook is not necessarily more positive compared to a year or so ago, but regulation certainly is one stepping stone for long-term proliferation in adoption. It does not have any impact on our testnet and developments.

Are tier tresholds (in CPX) fixed forever or can this be de-/increased in the future? What would be a determining factor for this?

Tier thresholds are not perpetually fixed, and the determining factors are basically; 1) whether it’s reasonable for any point in time, which will change over time due to a combination of factors including market conditions, accessibility, market feedback — 2) overall demand and price — 3) whether the number of nodes in each tier are deemed abnormal and need to be adjusted for the overall health of the network and ecosystem.

Could you clarify what “APEXm” programming language is?

APEXm was a tentative XML-based markup language (not quite a programming language) for business users to draft smart contracts and develop basic dApps quite easily. Think of it as something closer to HTML, as the simplest analogy. As of today, this feature is in the developmental pipeline but not exactly a priority, as ultimate possibility of business users developing their own smart contracts still need to be gauged.

How will the market be able to determine the value of CPX if only approved supernodes are allowed? If this is the case, then it is not possible to vote for new nodes and eliminate old ones, so I don’t see much of an incentive for supernodes to compete for staked tokens. The technical paper suggests that supernodes will be run by Apex Core Development, enterprises/brands, certain strategic investors, and application partners. How many supernodes will be run by Apex Core Development team and how will this evolve through time?

Approval is a simple process and is not exactly discriminating other than factors that would pertain to overall network health, as in nodes with potentially questionable intent should definitely not be approved. After approval it becomes a completely democratic process where supernode candidates can compete.

We expect to run the majority of the supernodes initially for speed to POC (proof of concept) and initial technical and network robustness, but hope to decrease that to 3 or less over time.

Apex recently named two community members tech ambassadors. Will there be a push to grow the tech community in the coming months?

Yes, the tech aspect of the community will definitely grow in the coming months, and we think it’s something good to familiarize the community more with what’s at the core of APEX.

That is all for now. I hope these answers help shed some more light on the project inner workings and development progress. I would like to thank the community for submitting questions and I will revisit some of those we didn’t cover today at a later date. If any of you have questions and didn’t submit for this AMA, feel free to do so via our Community Management Team.

Keep it up,
Jimmy

APEX Network

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