RV Blog What is ApeCoin?

What is ApeCoin?

What is ApeCoin?

ApeCoin ($APE) is a token that exists as an ERC-20 token on the Ethereum blockchain. It was launched in mid-March 2022 as part of the Bored Ape Yacht Club ecosystem. ApeCoin’s launch was rather hyped, not least because 15% of its entire token supply was airdropped to its community. According to Dune Analytics, in the first two weeks after the launch, more than 90% of all eligible addresses had claimed the ApeCoin airdrop.

Soon after its launch, ApeCoin has become tradable on most major centralized and decentralized exchanges like Binance, Huobi Global, Coinbase Pro, or Uniswap. On the first day of trading, ApeCoin’s price shot up to 17.75 USD, while correcting to below 10 USD in the following days.

What Is the Bored Ape Yacht Club?

ApeCoin bears the Bored Ape logo and the ApeCoin airdrop was received by owners of a Bored Ape or Mutant Ape NFT, two NFT collections that belong to the Bored Ape Yacht Club (BAYC). The former is the world’s most valuable NFT collection, as it has recently overtaken the famous CryptoPunks (Yuga Labs acquired the intellectual property of CryptoPunks in early 2022).

The Bored Ape Yacht Club is living up to its name, as it is an exclusive club indeed. Its NFTs have seen meteoric price rises. Since their first minting at a price of 0.08 ETH in April 2021, BAYC NFTs have reached a floor price of more than 100 ETH. This makes them the most successful NFT collection to date.

BAYC NFTs have also drawn the attention of celebrities. Several actors, singers, and athletes have already come on board. At the end of March, even the pop queen herself, Madonna, bought a Bored Ape for $470k. Other celebrities that own a Bored Ape are Justin Bieber, Paris Hilton, Neymar Jr., Serena Williams, and Eminem. A complete list can be seen here.

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What Is The ApeCoin For?

With ApeCoin, the Bored Ape Yacht Club is realizing parts of its ambitious road map: They have announced in-person events, additional airdrops, and more. As such, ApeCoin is intended to have several functions: First, the token is to serve as a governance token for the ApeCoin DAO, the decentralized governance framework that supports the Ecosystem Fund. Whoever owns ApeCoins can help govern the DAO.

Second, the token is supposed to be a unit of account for all sorts of transactions in the BAYC ecosystem. A third benefit the token has is the potential access it grants to holders for events and games that will be hosted by the BAYC in the future. 

Who’s Behind ApeCoin?

The company behind ApeCoin as well as the Bored Ape Yacht Club is Yuga Labs, a company based in the U.S. Apart from the successful rise of their NFT collections, Yuga Labs had gained further attention for the first time back in December 2021, when they announced a partnership with adidas. This news came after the sportswear company confirmed that they had acquired a Bored Ape NFT.

With ApeCoin, Yuga Labs has launched a crypto token that aims at being a crucial part of the developing economy surrounding Yuga Labs’ ecosystem and its products. Although the company was only founded at the beginning of 2021 and only had 11 full-time employees at that time, one year later, they have quite some financials to show: In 2021, the company’s revenue was $138 million, with a net profit of $127 million, which adds up to an astonishing margin of 92%. And at the end of March 2022, Yuga Labs announced that they raised $450 million, at a valuation of $4 billion.

ApeCoin’s Tokenomics

ApeCoin has a fixed supply of 1 billion tokens with neither inflation nor any burning mechanism. Forty-seven percent of the token supply is going into the ApeCoin treasury, while 15%, as already mentioned, has been airdropped to NFT holders.

Also, a token allocation has been reserved for people that have been working on the project. Ten percent is given to Yuga Labs, 6% to charity, 14% to launch contributors, and 8% to the founders. When it comes to charity, the Jane Goodall Legacy Foundation will handle the funds provided for this purpose. Some commentators have pointed out that the token distribution might have been chosen in a way that benefits project insiders and the team since a lot of the DAO funds will also be controlled by them.

An important fact to note is: With the launch of ApeCoin, around 26% of the total token supply was unlocked immediately. The rest of the tokens will unlock over a 48-month period. Also, all the tokens reserved for Yuga Labs, founders, and launch contributors were given a lock-up period that lasts for a minimum of 12 months.

ApeCoin’s Future Value Projection

What will ApeCoin be worth in the future? Nobody knows. The value of the token heavily depends on Yuga Lab’s future plans and how successful they will turn out to be. Interestingly enough, executives in the gaming industry from FTX and Animoca Brands sit on the ApeCoin DAO’s special council. This could also hint at the fact that ApeCoin’s goal is to be used as an in-game currency for upcoming Yuga Labs releases.

What the project as well as the airdrop proved to a wider audience, is: The so-called right-click savers, a popular group of NFT critics, were wrong about NFTs. They do offer benefits to owners. This is proven by the fact that none of these right-click savers was awarded a single ApeCoin, but only investors that were able to prove their on-chain ownership of a BAYC NFT. This goes to show that NFTs seem to have their quirks. After all, some Bored Ape holders did indeed make a fortune. As this tweet explains: If you owned seven Bored Ape NFTs at the time of the ApeCoin launch, you were eligible to claim enough ApeCoin to purchase an average-sized yacht. This is quite something.