ApeCoin: Heads or Tails?
Through both bears and bulls, the NFT community has eagerly awaited the arrival of Bored Ape Yacht Club’s (BAYC) cryptocurrency token. Now that ApeCoin is finally here, what is it, and what does it mean for Web3 at large?
It would be diligent to first provide some context. As the premier NFT collection with a market cap of over two billion dollars, BAYC has enjoyed the spotlight since their meteoric rise during August of last year. Originally available to purchase for the cost of 0.08 Ethereum, the cheapest available Apes are now valued at 77.7 Ethereum on OpenSea. In other words, what was once equivalent to $200 is now floating around $220,000: a tidy profit for early investors in a burgeoning market.
Further collections, such as the Bored Ape Kennel Club (BAKC) and more popular Mutant Ape Yacht Club (MAYC) have been airdropped to holders of the original apes. Pioneered by Yuga Labs, the creators of BAYC, this strategy of rewarding community members has seen massive success and helped set new industry standards. With ApeCoin being their latest venture, let’s take a closer look at the details.
The lion’s share of the BAYC ecosystem lies within the original 10,000 procedurally generated images themselves. ApeCoin, however, operates differently. As an ERC-20 governance token, the tradable cryptocurrency is intended to be strictly utilitarian with the following use cases:
· Governance: as a ballot, each coin will be used to cast a vote on proposals.
· Unification of Spend: as a currency, Yuga Labs has created their own economy which effectively sidesteps centralized intermediaries.
· Access: as a key, ApeCoin will act as an entry-pass for otherwise exclusive avenues such as events, merch, and services.
· Incentivization: as an invitation, the newly created coin will encourage others to incorporate it into their own projects, effectively creating a decentralized network orbiting BAYC itself.
What does this all mean? For starters, this is BAYC’s first real step into the world of decentralized autonomous organizations, more commonly known as a DAO. The proposed benefits of these self-governing bodies are the cornerstones of success in Web3. With every community member having access to proposal submissions and equal voting rights, the future of BAYC has been taken into the hands of each and every member.
Or maybe it hasn’t. The ApeCoin DAO has been presented as its own legal entity, equipped with a stewarding foundation and elected board of directors. This decision on Yuga’s end is presumably a lawful buffer against recent SEC crackdowns on NFT collections offering tokens to their customers. The distance between Yuga and the DAO itself may be little more than an arbitrary distinction, but in legal terms, the creators of BAYC have protected themselves. More importantly, their holders have been safeguarded as well.
The board consists of Dean Steinbeck, Amy Wu, Maaria Bajwa, Yat Siu, and even the co-founder of Reddit, Alexis Ohanian. Given the star-studded lineup’s operational and technical experience, the ApeCoin DAO is in good hands. Although they have no direct control or veto power–by virtue of being a DAO–they are responsible for the oversight, administration, and execution of proposals. With an initial term of six months, as well as the constant risk of removal via majority voting, the board of directors will surely be working around the clock to carry out the community’s vision. If not, it may turn into a scene straight out of Planet of the Apes… with less violence, hopefully.
The total supply, which will never fluctuate due to the contract’s mechanics, will sit at a cool 1 billion. While this may sound like a staggering amount, the tokenomics are well thought out with internally timed locks in place to avoid inflation. Approximately 30% of the billion will be available for immediate claim, with more releasing monthly for the next 4 years. The distribution, which began on March 17th, fell to four main groups:
· Ecosystem Fund: 62% of total supply will go to BAYC/MAYC holders as well as the DAO treasury, sitting at 15% and 47%, respectively.
· Yuga Labs: 16% will go to Yuga Labs. To note, 6.25% will be donated to the Jane Goodhall Legacy Foundation.
· Launch Contributors: 14% will be awarded to companies collaborating with BAYC.
· BAYC Founders: 8% will go to the founders of Yuga Labs.
Yuga Labs has planted their feet firmly and are seemingly well positioned for their next move. With the legal considerations addressed, tokenomics thoroughly thought out to encourage sustained value, and even securing major partnerships with leading exchanges–such as Coinbase, FTX, Kraken, Gemini, eToro, OKX, and Binance–BAYC holders have another reason to rejoice. As per usual, the four-person team has done what they have always excelled at: taking care of their community. With each ape being eligible to claim 10,094 tokens, and each mutant being allotted 2,042, Yuga has handed out yet another stimulus check to those lucky few.
While we may have never imagined a world where digital apes and intangible coins would be worth a small plot of land, the recent explosion of non-fungible tokens has made this a reality. Yes, Yuga has built an incredible foundation for the success of the ApeCoin DAO and token itself, but we will have to wait and see how well they can continue to build on it.
