What Is ApeCoin And Should You Buy It?

CryptoMode ApeCoin Yuga

ApeCoin is the talk of the town among crypto enthusiasts and speculators today. The newly launched project has ties to Bored Ape Yacht Club and Mutant Ape Yacht Club. The currency is designed to support the next phase of these projects as envisioned by the community. 

The Birth of ApeCoin

It was a matter of time until two of the biggest NFT collections – created by the same team – received a native currency. ApeCoin is the direct result of that ongoing process and serves as an ERC-20 token on the Ethereum blockchain. The currency serves governance and utility purposes within the APE ecosystem. Moreover, the team prioritizes community engagement to take ApeCoin into the Web3 era.

While ApeCoin is issued on Ethereum, it will be part of an open-source protocol layer. A total of 1 billion tokens will exist, although there is no minting option through the contract interface. Unfortunately, there is no burning mechanic either, ensuring the supply will always remain the same. That can be beneficial but problematic if overall interest in ApeCoin drops in a few months or years from now. 

Who Received ApeCoin Initially?

The distribution for ApeCoin is rather interesting. A whopping 62% of the supply is used for the ecosystem fund. More specifically, 150 million APE go to BAYC/MAYC NFT holders, claimable immediately at launch. That explains why this token already has such strong liquidity, even though the current price momentum is rather unsustainable. 

The remaining 470 million tokens of this 62% allocation see 117,500,000 APE unlocked at launch and an extra 7,343,750 tokens unlocked per month. These tokens belong to the DAO treasury and resources and may not necessarily be spent right away. 

16% Of the supply goes to Yuga Labs, creators of BAYC and MAYC, and charity. Yuga Labs has 150 million APE tokens – vested for 12 months – and 10 million tokens will go to the Jane Goodall Legacy Foundation. Those tokens are also vested for 12 months. Both entities will receive monthly unlocks for 36 months after the vesting period concludes. 

BAYC Founders – four people- receive 80 million tokens to be split. Tokens are locked up for 12 months and unlock at a rate of 2,222,222.22 APE per month. The remaining 14% goes to launch contributors, who receive a small amount upfront and the remainder after specific time-based periods. 

How Many Tokens Can You Claim?

Assuming you are a BAYC, MAYC, or BAKC holder and not part of the allocations above, your claimable tokens will heavily vary. Bored Ape Yacht Club holders can claim between 10.094 and 10.950 tokens, depending on if they own a Kennel Club NFT as well. For MAYC holders, the claim ranges from 2.042 to 2,898 tokens, depending on whether the user has ownership of a Kennel Club NFT. 

Surprisingly, that leaves Bored Ape Chemistry Club holders behind. Although it is a collection under the Yuga Labs banner, it does not qualify for token claims. A bit surprising for a collection with a price floor of over 22 ETH, but that is the decision made by the team. 

A multisig wallet will control any unclaimed APE tokens after the claim period and subsequent grace period are over. 

APE Foundation vs ApeCoin DAO

It is crucial to distinguish between the APE Foundation – a legal entity administering decisions of the ApeCoin DAO and steward of APE – and the ApeCoin DAO itself. The latter entity is a decentralized governance structure making decisions – Ecosystem fund allocation, governance, projects, partnerships, etc. – accessible to all APE holders.

The APE Foundation has a special council – or Board – to administer DAO proposals and follow the community’s vision. Initial members, outlined below, will serve for six months, after which they can be voted in for longer tenure or voted out by the DAO members.

Council members include:

  • Alexis Ohanian: Co-founder of Reddit; General Partner & Founder of Seven Seven Six
  • Amy Wu: Head of Ventures & Gaming at FTX
  • Maaria Bajwa: Principal at Sound Ventures
  • Yat Siu: Co-founder & Chairman of Animoca Brands
  • Dean Steinbeck: President & General Counsel at Horizen Labs

Should You Buy APE?

Given the current price action, APE will primarily serve as a speculative asset. That is how it goes for most claimable airdrops and tokens in this industry. Considering how users have 90 days to claim their tokens, there will be more than sufficient liquidity for the coming days and weeks.

That said, the currency may not necessarily warrant investment. It can be a good “flip” when the market sours and people can scoop up APE at a low price. However, prices have already begun to plummet hard, as the currency jumped to a market cap of over $1 billion right away. It has a vast supply – that will unlock gradually – but serves very little purpose today.

While it is part of the ApeCoin DAO, it remains to be seen how many people want to get involved in governing BAYC and MAYC. Governance tokens often lose traction and value very quickly. On the other hand, APE will also have utility, so it will be interesting to see what happens on that front. For now, it will remain a very volatile asset that will likely drop well below $5 in the coming hours. 

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