ApeCoin

What is ApeCoin (APE)?

ApeCoin is an ERC-20 standard token that serves as the governance and utility token central to the APE ecosystem, made world-famous by the Bored Ape Yacht Club.

The BAYC is, in some ways, the face of cryptocurrency and non-fungible tokens (NFT) on social media, either reported on for changing hands for hundreds of thousands of dollars or used as Twitter profile pictures by various celebrities.

Having been conceptualized as an exclusive sort of online access ticket whose monetary appreciation was compounded by the COVID-19 pandemic and the following cryptocurrency bull market, the BAYC stands for a new sort of culture,

Bored Ape NFT holders have access to private online communication media and exclusive in-person events.

Its celebrity purchasers include comedians Jimmy Fallon, Dave Chappelle, and Kevin Hart, entrepreneur Mark Cuban, footballer Neymar, heiress Paris Hilton, basketball stars Steph Curry and Shaquille O’Neal, musicians Snoop Dogg, Madonna, Eminem, Timbaland, and DJ Steve Aoki.

ApeCoin attempts to follow through with BAYC’s theme of access and culture by unlocking the ability for ecosystem participants to get involved in various exclusive games, events, services, and merchandise that the ERC-741 standard NFTs couldn’t facilitate.

APE provides a single, unified currency for the system and brings an element of governance, as ApeCoin holders participate in the ApeCoin DAO.

When Was ApeCoin Launched?

ApeCoin was launched on the 17th of March, 2022 by the ApeCoin DAO. ApeCoin is a fungible ERC-20 token on the Ethereum blockchain and was launched with a permanently fixed supply of 1 billion APE.

150 million APE were immediately unlocked for claim by BAYC NFT holders in one of cryptocurrency’s richest airdrops. Another 150 million APE went to Yuga Labs with an initial 12-month vesting period followed by gradual unlocks over the next 3 years.

47% of the ApeCoin supply went to the ApeCoin DAO treasury, 14% to launch contributors (defined as companies and people that helped make the project a reality), and 8% went to the four founders of the BAYC.

Who are the Founders of ApeCoin?

ApeCoin is a decentralized project launched and governed by the ApeCoin DAO, a decentralized autonomous organization central to the APE ecosystem and the Bored Ape Yacht Club Community.

Holders of ApeCoin are granted a vote proportional to their holdings within the ApeCoin DAO. But, as noted above, the founders of BAYC and their Yuga Labs company were given a cumulative total of 23% of the APE token supply, while 47% went to the treasury.

According to Crunchbase, Yuga Labs was founded by creative writers Greg Solano and Wylie Aronow. The same pair who were first doxxed as two of the four creators of the BAYC. BAYC’s other two creators, also credited for creating Yuga Labs on ApeCoin’s website, were part of this distribution, too.

ApeCoin DAO is connected in branding to the Bored Ape Yacht Club, but it isn’t connected in legal terms thanks to Yuga Labs’ decision to launch ApeCoin via the ApeCoin DAO.

How Does ApeCoin Work?

ApeCoin is an ERC-20 fungible token on Ethereum with a fixed supply and no additional minting or burning mechanisms.

Its main function is as a governance token for the APE ecosystem that hinges on the transcendent and highly popular Bored Ape Yacht Club non-fungible token collection.

The community interest around this collection and the development of the ecosystem around it serve as the main utilities for APE, granting holders a vote or a voice in the direction taken by the ecosystem as a whole.

What Makes ApeCoin Unique?

ApeCoin is unique for its position as a “culture” token, although given the subculture it belongs to, it represents access. This access to the APE community is exclusive by default, with scarcity driving prices.

The demand to be adjacent to celebrities is another major driver of its appreciation and hype. With so many celebrities being part of the BAYC community as detailed above, purchasing access to this community also means first-hand access (or at least access via Discord) to these celebrities.

Investors paying for access to celebrities isn’t new. Billionaire founder of SAC Capital (since shut down after being found guilty of insider trading) Steve Cohen once paid celebrity chef Guy Fieri $100,000 to “hang out.”

The Bored Ape Yacht Club is a world-famous brand, however, and ApeCoin will be used for the expansion of the brand into the world of Web3 and gaming.

How is the ApeCoin Network Secured?

The ApeCoin cryptocurrency and the Bored Ape Yacht Club NFT collection are fully dependent on the Ethereum blockchain.

Ethereum is a network of computers, called nodes, that build and find consensus on a growing series of batches of transactions, or a blockchain.

Each transaction batch, or block in the chain, has an identifier of the chain that must be present for the block to be considered valid. Whenever a node adds a new block to the chain, transactions in that batch are executed and alter the ETH balances of Ethereum accounts to reflect the new network state.

Like Bitcoin, Ethereum is a proof-of-work (PoW) blockchain that relies on computers on its network, called miners, dedicating their computing power to the security of the network.

While Ethereum remains a proof-of-work blockchain at the time of writing, it will switch to proof-of-stake (PoS) later in 2022. This switch will entail a new consensus mechanism as well as sharding as a scaling solution.

What is the Use of APE?

Currently, APE is used as a governance token for the ApeCoin DAO, which directs the development of the APE ecosystem.

However, the main purpose of APE’s deployment is to serve as a utility token within the APE ecosystem as it continues to be fleshed out. As the BAYC brand enters the world of Web3, ApeCoin will be used as a medium of exchange and token of utility.

Who Controls ApeCoin?

ApeCoin is controlled by the ApeCoin DAO, composed of APE holders. It is a decentralized autonomous organization in charge of decision-making around Ecosystem Fund allocations, governance rules, projects, partnerships, etc.

The APE Foundation, meanwhile, is the legal entity created to administer the decisions of ApeCoin DAO, thereby serving as the steward of ApeCoin.

Yuga Labs, the Web3 company that created Bored Ape Yacht Club, launched ApeCoin under the ApeCoin DAO to distance itself legally from the cryptocurrency itself. However, it remains a community member of the ApeCoin DAO and has pledged to adopt APE as the primary fungible token across new projects.

Yuga Labs is valued at $4 billion as per a March 2022 seed funding round that raised $450 million, led by a16z and including the likes of Animoca Brands, FTX, Moonpay, and Sound Ventures.

A few days before this funding round, Yuga Labs announced the acquisition of CryptoPunks and Meebits, along with the transfer of the assets’ commercial rights to the community.

The APE Foundation Board, meanwhile, oversees the decisions of the community and works towards the further decentralization of the ApeCoin DAO.

Current board members include Reddit co-founder Alexis Ohanian, FTX head of Ventures and Gaming Amy Wu, Sound Ventures Principal Maaria Bajwa, Animoca Brands co-founder and Chairman Yat Siu, and Horizen Labs President Dean Steinbeck.

How Much APE Is In Circulation?

APE was launched with a fixed permanent supply of 1 billion coins. This supply was designed to remain static, with no further issuance and no burning of APE.

However, the exact amount of APE in circulation will change due to the gradual unlocking of the APE handed out to various ecosystem participants. The maximum vesting period is 48 months, although many large chunks of APE were set to unlock 12 months after launch.

Yuga Labs’ 150 million APE, for example, was set with an initial 12-month lock before just over 4 million APE unlocks every month for the next three years. Similar schedules have been set for the founders, the treasury allocation, and donations to the Jane Goodall Legacy Foundation.

How Do You Buy APE?

A highly popular token with one of cryptocurrency’s strongest brands behind it, APE is available on all of the top exchange platforms as well as several Ethereum-based decentralized exchanges (DEX).

Purchasing on a DEX like SushiSwap will require you to have a cryptocurrency wallet set up, but buying on a centralized exchange (CEX) would just need you to have a trading account on the platform.

Is It Possible to Buy ApeCoin Instantly?

You can buy APE instantly on CEX platforms, as the exchange’s internal ledgers will account for the trade and assign a part of their APE balance to your account. However, exchange accounts tend to be custodial, meaning that you may not be able to exercise your governance rights if you hold APE on an exchange.

In fact, it is more than likely that the exchange will be using your APE coins as their own when it comes to governance.

On the other hand, purchasing on a DEX means that you are likely going to use your own wallet. DEX transactions depend on the blockchain they use, so you’ll get your new APE as soon as Ethereum can deliver it to you.

How Do You Store APE?

As mentioned above, the easiest way to take part in governance is by holding your APE yourself. To do this, you’ll need a non-custodial wallet that’s compatible with Ethereum. Most often, these wallets come in two types: cold and hot wallets.

Cold wallets keep your tokens offline for added safety, while hot wallets connect to the internet and are convenient to use with various blockchain-based apps such as DEXes and games.

Popular hot wallets for Ethereum-based tokens include Metamask and the GameStop Wallet.

ApeCoin Energy Consumption

It could be suggested that ApeCoin is responsible for part of Ethereum’s resource consumption. Before ETH’s move to proof-of-stake, it has been quantified as having an annual consumption of around 80 TWh.

As Ethereum remains proof-of-work for now, mining still relies on computational power. As such, the same criticisms that Bitcoin has suffered tend to be leveled at ETH in terms of energy consumption.

Furthermore, Ethereum has been assumed to cost more per kWh as it is “ASIC-resistant,” or mined on common graphics processing units (GPUs) rather than specialized machines due to its Ethash algorithm.

However, Ethereum’s shift to proof-of-stake will end GPU mining and instead mean that only validating nodes need to stay connected to the internet 24/7. If Ethereum 2.0’s PoS shift proves successful in reducing its electricity consumption and carbon footprint, it could become several orders of magnitude cleaner.

Is APE a Good Investment?

APE is a cryptocurrency tied to an iconic project and will ride on the coattails of BAYC as it enters the world of Web3 and gaming.

The power of this exclusive community project is considerable, giving APE its value as a token providing governance of such a community. Access and culture are two of the keywords that the ApeCoin community uses, and both have significant value.

If Yuga Labs and the ApeCoin DAO can successfully flesh out the APE ecosystem and continue to grow the utility of the ApeCoin token, then its value can only appreciate.

However, there are also multiple risks. For one thing, BAYC and ApeCoin are highly dependent on Ethereum. This means that any sort of catastrophic failure of ETH or its blockchain may have dire consequences for ApeCoin. Having said that, Ethereum is one of the most decentralized and tightly secured blockchains in the world.

The BAYC is also, to many, the face of NFTs. While their actual adoption continues to grow, various media outlets focusing on different niches, from finance to gaming, are quick to attack NFTs (and, quite often, Web3) for every perceived flaw.

Critics accuse NFTs of simply being “expensive monkey jpegs,” which some would say defines BAYC quite well.

Finally, there’s the risk of it all being simply a fad. Even the use of apes has been suggested to be a form of cultural appropriation since the “ape” movement originated on Reddit with the r/wallstreetbets (now r/superstonk) communities coming to prominence during the events of January 2021.