David Angliss, an analyst with Australia’s leading cryptocurrency investment firm, Apollo Capital, shares the fund’s weekly take on what’s happening in the fast-changing and volatile cryptocurrency space.

Apollo Capital is more bullish than ever on Chainflip, a decentralised exchange for cross-chain token swaps that will be launching its incentivised public testnet in mid-December.

“We are really exceptionally excited for this one,” David Angliss says,

The Apollo Capital team talked on Thursday with founder Simon Harman, a Melbournian now leading the project from Berlin.

“I don’t know where they’re all based, but essentially they’ve grown quite a bit since we last spoke about them,” Angliss says.

There are now 15 engineers on the Chainflip team, mostly programmers in Rust, the computer programming language that Chainflip is built on, Angliss says. They also have web and Solidity developers.

Chainflip’s testnet will only be available for use by around 500 whitelisted users, “so people that get involved and use the validators and the testnet are going to be rewarded with tokens,” Angliss says.

Angliss says Apollo is so excited about this project because there’s a real need for a platform that enables clean swaps of assets on different blockchains (such as between Ethereum and Avalanche or Solana). There’s a couple of projects working on this problem, but it’s fair to say that no solution has really taken off or gained traction.

“So the headline is frictionless value transfer throughout all the ecosystems in crypto – the ultimate solution in value transfer,” Angliss says.

Chainflip’s cross-chain transfers operate in a completely decentralised manner, with no “wrapped tokens” (synthetic assets) and no admin keys held by the founders or the team.

“It’s just straight, native swapping of crypto assets,” Angliss says.

Soundcheck launch

Chainflip Labs announced on November 16 that the “Soundcheck” testnet will launch on December 15 and run through to January 19 2022.

The testnet won’t include any swapping functionality, just “boring stuff” for the foundations of the network. (Cross-chain token swaps are pretty complicated – THORChain, another such project, had to temporarily shut down its platform in July after several hacks.)

Chainflip consists of two layers – a swapping layer and a foundation layer, Angliss explained.

“They’re really pleased with their internal testing so far, of the foundation layer,” Angliss said.

The team is now starting work on the swapping layer, which should be easier to construct, Angliss said. “Which sort of makes sense, because the swapping just sits on top,” Angliss said.

Mainnet launch is predicted for March of 2022, Angliss said.

Other projects working on cross-chain token transfers include Anyswap, which uses bridges; Router Protocol, which will use stablecoins to route swaps between decentralised exchanges on different blockchains; Hop Exchange, which allows stablecoin swaps between blockchains; Relay Chain,  a cross-chain bridge; and Osmosis, a decentralised exchange built on Cosmos which involves swaps between blockchains that have enabled the Interblock Communication Protocol.

There’s also the aforementioned THORChain as well as Ren Protocol, a platform for transferring “wrapped” Bitcoin onto other networks, such as Ethereum.

“Ren just goes along in the background, but it was a real pioneer of this stuff, being able to wrap Bitcoin,” Angliss said.

Immutable’s big week

Last week Angliss highlighted Immutable X, a layer 2 Ethereum scaling solution for NFTs being developed by a Sydney company, Immutable.

IMX tokens were trading at the time for US$5.53; on Friday they were over US$9, making them the No. 79 crypto. They sold for just 15c in September, although retail investors were only able to buy a few hundred dollars worth.

Angliss says Apollo is excited about the growth in layer 2 projects, such as ZigZag, a decentralised exchange on zkSync, the Ethereum scaling solution. Trades using ZigZag only cost $1, he says.

LayerSwap is another layer 2 project Angliss is watching. The platform enables users to transfer Ethereum tokens from centralised exchanges directly to wallets on Arbitrum and Optimism, saving around US$100 or so on Ethereum gas fees.

“You completely bypass going through (mainnet) Ethereum,” Angliss says.

The views, information, or opinions expressed in the interview in this article are solely those of the interviewee and do not represent the views of Stockhead.

Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article.