Key Takeaways
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ApeCoin is the native and utility token of the BAYC ecosystem and the governance token of the ApeCoin DAO.
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15% of ApeCoin’s total supply was airdropped to BAYC and MAYC NFT holders.
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Holders of ApeCoin token can create proposals and vote on improvement proposals on the ApeCoinDAO governance portal.
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ApeCoin will be the medium of exchange used on Yugalab’s Otherside GameFi platform to purchase in-game resources.
On March 17, 2022; Yugalabs airdropped 150 million ApeCoin tokens to Bored Ape Yacht Club (BAYC) and Mutant Apes Yacht Club (MAYC) NFT holders. The airdrop program also marked the onset of trading activities for the token which rose to prominence almost immediately. Thanks to the reputation built by Yugalabs through the BAYC and MAYC NFT collections and the hype that preceded the release of the ApeCoin token, a generally positive reception followed.
ApeCoin found its way to the elite list on the most reputable exchanges as it eclipsed most other crypto assets in terms of 24 hours trading volume. Barely a month later, ApeCoin reached an all-time high of $26.70. While its value has declined since its all time high, partly due to the bear market, it has continued to make waves in the crypto space and beyond it. But what is ApeCoin?
What Is ApeCoin?
ApeCoin is the native and utility token of the BAYC ecosystem and the governance token of the ApeCoinDAO. Yugalabs introduced ApeCoin as means to further decentralize the administration of its growing community and create a financial stronghold to maintain existing facilities and support further growth of its ecosystem.
ApeCoin is designed to give its holders certain advantages and other privileges in the Bored Ape ecosystem, especially when combined with the BAYC, MAYC, or Bored Ape Kennel Club (BAKC) NFTs. Currently, it finds its major use as a governance token, a store of value and a reward token on decentralized gaming applications.
How Does ApeCoin Work?
ApeCoin is an ERC-20 standard token issued on the Ethereum blockchain. As the ERC-20 smart contract standard is one of the most popular token standards, ApeCoin holders can easily transfer, buy, and sell these assets on centralized and decentralized exchanges where ApeCoin is listed.
ApeCoin holders will be able to access the DAO voting facilities as well, where a packaged smart contract function on the ApeCoinDAO platform screens users' wallets to confirm that they hold ApeCoin. Holding ApeCoin is the gateway to participating in governance activities on the ApeCoin voting portal. ApeCoinDAO members' votes are weighted according to the ApeCoin tokens they hold, or the ApeCoin tokens they committed to voting for a particular proposal.
Once the votes are tallied, the ApeCoin Foundation implements the governance decisions taken by the community. The APE Foundation’s goal is to steward the growth and development of the APE ecosystem, with a special council, the Board, to administer DAO proposals and manage administrative reviews of proposals.
The APE Ecosystem
The APE ecosystem consists of ApeCoin holders as well as other related products and services, such as NFT collections and metaverses.
Bored Ape Yacht Club (BAYC)
BAYC NFTs are the earliest members of the APE ecosystem. BAYC NFT is a collection of 10,000 unique images of literally ‘bored’ Apes. The APE art depicts certain levels of disinterest or fatigue. Each BAYC NFT is unique. From a minting price of 0.08 ETH, BAYC NFTs grew to values of over $300,000 and caught the attention of crypto communities and the world outside it, with mainstream celebrities holding BAYC NFTs, and is now recognized as a blue-chip NFT. Other projects in the APE ecosystem have greatly profited from BAYC’s reputation and status.
Mutant Ape Yacht Club (MAYC)
Following the enormous success of BAYC NFTs and the demand that accompanied them, Yugalabs introduced the Mutant Apes (MAYC) as a variant of the BAYC. In addition to the 10,000 BAYC NFTs, Yugalabs released 20,000 MAYC NFT collectibles. Of these, half were sold in a public auction, while the rest were created by BAYC holders, who “exposed” their Bored Apes to airdropped “mutant serum," which added new attributes to their Bored Apes.
Bored Ape Kennel Club (BAKC)
Yugalabs also issued 10,000 dog collectibles for the BAKC NFT drop. BAKC NFTs were only available to BAYC NFT holders, with no external minting programs conducted for the release. These canines have their own variable traits, and could only be “adopted” within a week of launch. About 400 BAYC NFT holders didn’t claim the BAKC NFTs at launch, thus bringing the total supply to just over 9,600 NFT arts.
ApeCoin
ApeCoin powers the financial arm of the APE ecosystem. The Bored Apes team has utilized ApeCoin for fundraisers and has reserved some ApeCoin tokens for future developments on the APE ecosystem. There are also exclusive staking pools for ApeCoin, where holding different APE ecosystem NFTs grants different APYs, with the BAKC Pool offering a high of 162.59% APY at time of writing. ApeCoin will also be the primary currency of the Otherside metaverse.
Otherside
Otherside is the latest addition to the APE ecosystem. Otherside is fashioned to unite other constituents of the APE ecosystem, featuring Bored Ape NFTs and other NFTs in a metaverse. In preparation for the Otherside launch, users can buy Otherdeeds with ApeCoin, which will let them claim a plot of land when Otherside launches. For owners who already own Bored Apes or Mutants, they can simply claim their Otherdeeds. On March 25 2023, Otherside will be opening up the second gamified test of its platform to 10,000 holders of Otherdeed NFTs.
ApeCoin Tokenomics
One billion ApeCoins were issued on the Ethereum blockchain. The Yugalabs team has however scheduled the total supply to gradually go into circulation in subsequent years. A major percentage of the total supply is vested and programmed for release within the next four years. 8% of the total supply was allocated to BAYC founders – this allocation will be vested for 12 months after which they will be gradually released per month over the next 36 months.
15% of the total supply was distributed to BAYC and MAYC NFT holders at launch. This supply isn’t vested. The ApeCoin treasury manages 47% of the total token supply. Here’s a detailed breakdown of ApeCoin’s tokenomics and its vesting schedule.
ApeCoin token’s smart contract doesn’t allow for extra token issuance nor has the team hinted at token burning in the future. ApeCoin’s total supply will therefore remain pegged to 1 billion tokens, while the circulating supply will vary according to the vesting and release plans.
ApeCoin currently trades on most centralized exchanges. You can trade ApeCoin on Binance, Coinbase, Kucoin, and other top-tier centralized exchanges. ApeCoin can also be traded on the Ethereum-based decentralized exchange Uniswap.
What Is ApeCoin used for?
ApeCoin serves a lot of purposes for different projects and organizations that make up the ApeCoin and Bored Ape ecosystem. Every application of the ApeCoin token is focused on growing the BAYC ecosystem, offering value to ApeCoin and BAYC communities, and improving the relevance of ApeCoin as well. Some of these use cases include:
Governance
ApeCoin is the official governance token of the ApeCoinDAO. ApeCoin adopts the DAO (Decentralized Autonomous Organization) system to create an impartial management strategy for the ApeCoin treasury and other political affairs.
Decentralized Autonomous Organizations (DAOs) are a systemic design structured to ensure general and undiluted participation of the members of the organization. In cryptocurrency communities, rights to this participation are tokenized and every token holder is considered a member of the DAO. Through voting portals, members of the DAO are able to vote on proposals and also submit their improvement suggestions to be voted on by the rest of the holders.
By distributing 15% of ApeCoin’s total supply to BAYC and MAYC holders; ApeCoin creators hope to give a voice to the same community on which it built an enormous NFT program. ApeCoin holders can create improvement proposals on ApeCoinDAO’s governance portal and also vote in favor or against proposals submitted by other members of the DAO.
ApeCoin holders can create improvement proposals on issues related to ecosystem fund allocation, brand decisions, procedures, guidelines, changes to the decision-making process, and changes to the tools or environment of the DAO or Foundation. The governance process is completely driven by the community and suggestions that pass the community voting stage will be implemented, if feasible.
Utility Token for ‘Otherside’ Metaverse Project
To raise funds for the development of its metaverse project – Otherside, Yugalabs auctioned deeds for genesis Otherside lands in ApeCoin. The auction program accepts ApeCoin from NFT and metaverse enthusiasts in exchange for Otherdeeds.
Sequel to the successful fundraiser program, Yugalabs has commenced the development exercise for Otherside. Otherside is a gamified, interoperable metaverse being developed by the same team that nurtured BAYC and MAYC NFTs to prominence. The game blends mechanics from massively multiplayer online role-playing games (MMORPGs) and web3-enabled virtual worlds. One can visualize Otherside is as a meta RPG where the players own the world, your NFTs can become playable characters, and thousands can play together in real-time.
Otherside will reportedly feature high-end 3D graphics and virtual reality technologies that usher in a feeling of an “artificial real world” to its users. These technologies will be augmented with NFT technology and decentralized payment systems.
Yugalabs hints at adopting ApeCoin as the primary medium of exchange on The Otherside project. By this, ApeCoin will be used for in-game NFT purchases and to pay for certain privileges and character improvements.
Native Token for Other Projects in the ApeCoin Ecosystem
By launching ApeCoin, ApeCoin creators established a fertile ground for new projects to grow and adopt a series of infrastructures. The ApeCoin ecosystem will foster young projects through the ApeCoin token. The new projects will also adopt ApeCoin for relevant financial procedures. This ensures mutuality as the projects progress with the ApeCoin token and the ApeCoin ecosystem.
Amonicabrands is the first recorded project to take this path with the integration of ApeCoin into its gameFi platform. Amonicabrands’ Benji Bananas decentralized game rewards players with in-game tokens that can be exchanged for ApeCoin. Other projects joining the ApeCoin ecosystem will also be expected to follow a similar pattern.
Store of Value
ApeCoin is currently trading on most cryptocurrency exchanges. It has also enjoyed a consistent position in the top 100 coins by market cap since its inception. Like every other cryptocurrency token, ApeCoin can be transferred between users, businesses, and institutions. Outside the boundaries of NFT and the metaverse, ApeCoin can be adopted by merchants and peers as a flexible means of value storage and value transfer.
BAYC NFT Holders Vs ApeCoin Holders
One of ApeCoin’s primary roles is to tokenize participation in the governance of BAYC and other Yugalabs’ products through ApeCoinDAO. But ApeCoin itself is to a large extent, an independent entity and some proposals passed by the ApeCoinDAO could be of relevance to Bored Ape NFT holders.
As specified, holding ApeCoin is the only prerequisite for participating in ApeCoinDAO voting activities. BAYC holders who don’t hold ApeCoin will be unable to vote on proposals, even if they affect BAYC NFTs in any way.
The ApeCoin airdrop was designed to this effect and in an attempt to give an edge to BAYC NFT holders. However, a good percentage of BAYC and MAYC NFT holders already sold a part or all of the airdropped tokens. This has seemingly created an imbalance between the NFT holders and the governing body. ApeCoinDAO’s proposal continues to be more about the DAO and the ApeCoin ecosystem itself, but several proposals are significant to the BAYC NFT holders as well, such as the development of an app to let collectors create visual content with their NFTs.
In an ideal scenario, APE ecosystem NFT holders should have an edge when it comes to voting on proposals, but ApeCoin’s relevance in the financial sphere has been a real challenge for this. Published metrics show that over 10% of ApeCoin’s circulating supply is held on exchanges while an average of 2 million ApeCoins participate in improvement proposals.
ApeCoin In The Future
At launch, Yugalabs shared its comprehensive plans regarding the growth of ApeCoin as a governance token and even more as a utility token.
As a governance token, ApeCoin holders will be at the helm of affairs of the ApeCoin ecosystem and its development plans. Over 6,500 members of the ApeCoinDAO have collectively voted in favor or against proposals for the improvement of the ApeCoin ecosystem or the development of new financial systems or technologies. This trend is designed to continue for the foreseeable future.
In addition, Yugalabs has also shared its plans to introduce members of the ApeCoinDAO into its core team. This plan will see appointed team members replaced with elected individuals from the ApeCoinDAO.
Popular rumors suggest other use cases for ApeCoin, but even confirmed roadmaps hint at plans to integrate ApeCoin in more than just governance procedures. Yugalabs is developing ApeCoin to facilitate improvement plans, incentivize users, and overall, act as the primary token of the BAYC ecosystem.
New GameFi and NFT projects on the Bored Ape ecosystem will adopt ApeCoin as their primary token as well. Popular gaming firm Amonicabrands announced that it has adopted ApeCoin as the primary token of its play-to-earn project, Benji Bananas. The mobile game, which has already grossed over 50 million downloads, rewards players with native tokens which can be swapped for ApeCoin. Other projects growing under BAYC’s umbrella are also expected to adopt reward or participation tactics that incorporate ApeCoin.
Yugalabs’ metaverse project – Otherside – also features central roles for ApeCoin and incentives for ApeCoin holders. Otherside NFT and metaverse lands were sold in ApeCoin. Metaverse enthusiasts grabbed 55,000 Otherside Otherdeeds at a price of 305 ApeCoins each.
ApeCoin is also expected to power many other economic activities in the Otherside and larger Yugalabs ecosystem.
Final Thoughts
Through a flurry of really impressive NFT art, Yuga Labs built a devoted community. Thanks to the ApeCoin DAO, it has handed over political powers to this community. ApeCoin is probably more popular for the airdrop program and its performance across cryptocurrency exchanges. It has also given every holder a piece of the governance of arguably the most vibrant NFT community. As Yugalabs dive into the metaverse, ApeCoin stands a chance of gaining core relevance in one of the most promising Web3 and blockchain narratives since NFTs – the metaverse.
From a governance token to a store of value in an otherworldly ecosystem, it is hard not to build fantasies about what the future holds for BAYC, ApeCoin, and the Otherside metaverse project. Yet, it is important to be conscious of the fact that these ideas are built using emerging technologies. They are at a stage where constant and sometimes, ‘unfavorable’ developments are made. That being said, each of these developments (as it concerns BAYC and Yugalabs) will be relevant to ApeCoin’s expanded utility.
As a rule of thumb; do well to carry out your own research before investing in cryptocurrency and NFT projects. And apply caution while interacting with smart contract applications.
Joel is deeply interested in the technologies behind cryptocurrencies and blockchain networks. In his over 7 years of involvement in the space, he helps startups build a stronger internet presence through written content. Follow the author on Twitter @agboifesinachi
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