It’s been a long time since a new token has generated as much instant hype as ApeCoin; a crypto-asset created by none other than Bored Ape Yacht Club (BAYC) makers, YuGa Labs.
So, what’s all the fuss about?
In short, it’s a combination of ApeCoin’s formidable backers, insane utility, and huge potential.
It’s no small feat, but ApeCoin’s founders hope the token can empower decentralized communities across the web3 space. Should they pull this off, ApeCoin really could be the next big thing.
Let’s take a look at what ApeCoin is, examining the bullish and bearish scenarios, and find out whether we’re ready to ape in ourselves.
- ApeCoin deep dive.
- The bullish case.
- The bearish case.
ApeCoin: a deep dive
Blockchain and web3’s transformational cultural impact is only just beginning.
Nobody can predict what the future holds.
However, ApeCoin is a positive step towards building that future, with a token that any developer can integrate into their own project.
Put simply, it’s an ERC-20 governance and utility token for use within the APE ecosystem.
Its main purpose, however, is to power decentralized communities building on web3.
Along with ApeCoin comes the ApeCoin Decentralized Autonomous Organization (DAO), formed to keep the ApeCoin ecosystem fair, inclusive, open, and above all, decentralized.
What does ApeCoin actually do?
The token’s main uses are as follows:
- It can be used for governance, allowing holders to participate in ApeCoin DAO voting.
- It serves as a utility token, and also as a decentralized currency for anyone within the APE ecosystem
- The token will grant holders-only access to exclusive games, merchandise, events and services.
- Third-party developers will be able to integrate ApeCoin Into their own projects, allowing the use-case to grow exponentially.
The total supply of ApeCoin is fixed at 1 billion tokens, and there is no minting (nor burning) functionality within the Ethereum-based smart contract.
Distribution and allocation
The tokens will be distributed among:
- Owners of BAYC, MAYC and BAKC NFTs.
- The DAO Treasury.
- Yuga labs.
- The Jane Goodall Legacy Foundation (charity).
- Launch contributors (entities that helped make the project a reality).
- The four founders of BAYC.
Allocation will be as follows:
Owners of Bored Ape Yacht Club, Mutant Ape Yacht Club and Bored Ape Kennel Club non-fungible tokens (BAYC, MAYC, BAKC respectively) will have 90 days to claim their tokens. Any unclaimed tokens will be transferred to the ApeCoin Ecosystem Fund, which is held on Coinbase.
DAOs sit at the heart of decentralized community (and decentralized governance). They create a model in which any holders of the token can have a say in the DAO’s decisions, and hence, its future.
Holders of the token will be able to vote on APE Improvement Proposals, via the Ape Improvement Proposal Process, on things like:
- Ecosystem funds allocations and expenditure.
- Governance rules.
- Voting for new board members.
The DAO board
The DAO board currently consists of six community members, but they are not permanent board members. In the spirit of true decentralization, members will rotate every six months, with new appointees coming via DAO governance voting.
The board’s role is to oversee the decisions made by the community and bring them to fruition. The DAO is locked by multisig keys, and each member has their own key.
The current board roster is made up of five all-stars from the community, who were appointed by consulting other members with strong operational experience.
- 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.
How’s that for a dream team?!
What does this mean for the NFT and metaverse spaces as a whole?
Time for some speculation, because there are pretty much two different paths ApeCoin could take.
One is bullish, the other… not so much.
Let’s examine both, and see how they could play out.
The bullish thesis:
- Just like Enjin created and hollowed out the infrastructure for gaming, ApeCoin could do the same for decentralized communities in the web3 space, such is their aim. Should they successfully pull it off, the momentum behind them, not least due to the success of Yuga Lab’s past projects, would be immense.
- If it achieves network effect, on top of retaining all Yuga Lab’s current users, it could possibly spread like wildfire, becoming the building block for new, interconnected, and standalone communities. When talking about online communities, think wider than just existing web3 dApps and NFT clubs, and consider the existing web2 platforms that, sooner or later will be integrating blockchain and moving to web3. After all, Alexis Ohanian is the cofounder of Reddit, and is sure to have a lot of input on building up communities too.
- There are already established brands which hold BAYC NFTs, including Nike, Adidas, to name but two. Just imagine what happens when the world’s largest brands get involved… As a thought experiment, what would happen if the likes of Disney, for example, started accepting ApeCoin for payment of goods and services?
The bearish thesis:
- This could all just be the flavor of the day, spurred on by hype (as well as FOMO from people who missed out on previous Yuga Labs projects).
- ApeCoin is so new that it’s impossible to know if it’ll succeed in gaining any adoption. Plus, let’s not forget that a high percentage of the tokens are being allocated to existing NFT holders and community members. The unlock period for the tokens is a 48-month process with the potential to cause sustained sell-offs, thereby not allowing the price to rise, or worse, making it collapse. In such a case, hype would die down, and ApeCoin would need to make a second attempt at gaining traction.
- It may also be the case that the price is pumped up so high that it doesn’t allow easy entry for lower capital retail investors, thus, further hindering adoption
- However, if the project does take off, then we can expect to see a range of copycat projects (not to mention scams) building on top of it. Projects claiming to have a new use case for ApeCoin could easily lure people in before pulling the rug.
Done right, ApeCoin could be a game-changer for online communities, and a building block for web2 social platforms that want to move to web3. However, don’t rush into the jungle too soon: Grab your binoculars and observe, and always do your own research (DYOR).