One of the biggest NFT projects in the crypto world is Bored Ape Yacht Club or BAYC. One NFT from the BAYC collection costs a minimum of 100 ETH, placing it as the most expensive floor price for NFT. Furthermore, BAYC is only 1 year old yet has one of the largest NFT communities. BAYC managed to attract many people in the NFT world. We could even argue that it was BAYC that started the NFT trend and pushed it into the mainstream. One of the new tokens inspired by the BAYC collection is ApeCoin. However, what is ApeCoin (APE)? What does this have to do with BAYC and the Ape ecosystem? This article will discuss in detail about ApeCoin (APE).
ApeCoin (APE) is an ERC-20 standard token issued to all NFT BAYC and Mad Ape Yacht Club (MAYC) holders. It acts as a utility and governance token. This means that APE is a digital currency and a voting token within the Ape ecosystem. According to Coinmarketcap, ApeCoin has a maximum total supply of 1 billion tokens and about 28% of them are already circulating in the market.
💡 Since a week after its launch, the APE token now (28 March 2022) has a capitalization of $4 billion dollars and about $14 dollars per 1 APE.
Initially, APE tokens can only be obtained if you are a holder of BAYC or MAYC collections. However, due to the enthusiasm of the crypto community, exchanges (CEX) such as Binance and CoinBase immediately started listing them anyone can buy them. You can even buy APE on several Indonesia-based crypto exchanges.
ApeCoin is created by ApeCoin DAO, a decentralized organization where all APE holders can vote for all decisions regarding APE. There is also the Ape Foundation which acts as the legal entity behind ApeCoin and takes care of all daily activities related to the technical operation of ApeCoin DAO. Lastly, there is ApeCoin’s board of directors which includes some of the most influential people in the crypto world and the internet.
ApeCoin’s board consists of 5 people which are Reddit co-founder Alexis Ohanian, Amy Wu from FTX, Maaria Bajwa from Sound Ventures, Yat Siu from Animoca Brands, and Dean Steinbeck from Horizon Labs. Each board member serves for six months, and APE holders have the right to elect the next board member.
One of the interesting things about ApeCoin is that it is not created by Yuga Labs as the creator of BAYC. Yuga Labs officially stated that they did not create ApeCoin. It’s hard to believe the leaked pitch deck of Yuga Labs has a special section about ApeCoin. Nevertheless, Yuga Labs remains firm that ApeCoin was created independently, not by them. ApeCoin’s website mentions that Yuga Labs acts as a contributor to the APE ecosystem. Finally, ApeCoin does not have a whitepaper and all related information is located in the about section of the ApeCoin website.
As already explained, owners of BAYC and MAYC collections will automatically get APE coins. The graph above also shows that the majority of APE tokens are in the APECoin DAO reserve money. The APE community can decide what to do with the APE tokens that are in this treasury reserve. In addition, we can see that many APE tokens were given to Yuga Labs and its various partners such as Animoca. The last interesting point is that 1% of the token is allocated as a charity to the Jane Goodall Legacy Foundation.
Currently, the APE token exists only as a speculative asset and an investment for those who believe in the idea and existence of the BAYC ecosystem in the crypto world. However, one of the promises and potential uses of the APE token is its role as an in-game currency. There are several projects being created by Yuga Labs and its partners such as Animoca Brands and nWayPlay.
Yuga Labs is partnering with nWayPlay for a secret game project that will integrate the APE token into its ecosystem. However, Yuga Labs and nWayPlay have not released any additional details about the game.
Yuga Labs also partners with Animoca Brands to integrate ApeCoin into an undisclosed game project (Yuga Labs × Animoca Brands). In addition, an Animoca game titled “Benji Bananas” already utilizes APE tokens in its play-to-earn scheme where players can earn token rewards just by playing.
Lastly, Yuga Labs itself has just received $450 million dollars in funds to develop the BAYC brand through creating games, metaverse projects, and other various media. One of Yuga Labs’ biggest projects is Otherside, an MMORPG that puts players in one large game world where they can interact with each other.
Check out the following trailer from Otherside:
The policies, regulations, and development of ApeCoin are determined by the community. Ape Foundation and Ape board members only serve as administrators who help run the technical side of ApeCoin. All decisions regarding the protocol and the future of ApeCoin are in the hands of all APE token holders. ApeCoin DAO is a DAO (decentralized autonomous organization) that governs everything about ApeCoin.
Simply put, a DAO allows APE token holders to vote for various ApeCoin network proposals, such as how the reserve cash will be allocated. You can access various ApeCoin regulatory proposals that are currently active (including proposals on the activation of the staking) feature in the proposal section of the ApeCoin site.
The weakness of the DAO system is that the development of the project is highly dependent on the participation of the community. If the community is not active and does not vote, many network developments process will be very slow.
ApeCoin’s (APE) price chart shows APE moving in a price range between $13 to $15 dollars after increasing drastically at the start of its launch. This kind of consolidation phase is normal after a token has experienced a significant rally because buyers are taking a ‘rest’ and enthusiasm begins to decline. If APE manages to maintain this price range and enthusiasm for APE picks up again, it could experience another rally.
💡 The consolidation phase isa phase in the price movement cycle in which it moves sideways or sideways within a certain price range. The consolidation phase usually occurs after a downward trend or a drastic price increase.
However, this hinges heavily on Yuga Labs’ announcement of the metaverse game and other collaborations to increase the utility APE. This also relates to concerns over the APE token. The price movement of the APE token is purely due to the hype and enthusiasm of the BAYC community.
The use of the APE token is very much focused on the metaverse and game industry. However, Yuga Labs has absolutely no experience with game creation (though it does work with game developers). Depending on the launch, the price of the APE token may increase drastically and then fall immediately when the Otherside release doesn’t live up to the big expectations that follow. A classic pattern of the “buy the rumor, sell the news” event.
💡 Buy the rumor, sell the news isa pattern in cryptocurrency when the price of a crypto asset experiences a drastic increase because of an important announcement (new project, game launch, new feature, etc.) and then drops sharply when the project/game/feature is released.
However, we can argue that Yuga Labs has a credible and trustworthy team that understands its own community. With the purchase of Cryptopunks and Meebit, Yuga Labs has also shown that it has big ambitions to become a major player in the NFT and crypto industry.
All of these things can give you hope if you want to or have already invested in APE tokens. Don’t forget to read before making an investment decision.
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