Launch of ApeCoin
ApeCoin, or APE, is an ERC-20 token on the Ethereum network.
It was launched in March 2022 by Yuga Labs, the same individuals behind the Bored Ape Yacht Club (BAYC) NFT collection. Namely, Greg Solano and Wylie Aronow, more commonly known as Gargamel and Gordon Goner, alongside two yet-unidentified individuals who are known only by the online handles of Emperor Tomato Ketchup and No Sass.
Following on from their successful NFT creations (Bored Ape Yacht Club, Mutant Ape Yacht Club, Bored Ape Kennel Club) and the successful acquisitions of the CryptoPunks and Meebits NFT collections, Yuga Labs decided to take on a new project – the metaverse.
For this metaverse, known as Otherside, a cryptocurrency was needed, and one billion APE tokens were created as a result.
ApeCoin airdrop to the BAYC and MAYC Community
A surprise airdrop delivered ApeCoin to those who held any of the Bored Apes Yacht Club or Mutant Ape Yacht Club NFTs. For each BAYC or MAYC NFT owned, they were gifted 10,094 APE coins by surprise. At launch, this was worth roughly $ 70,000 USD.
Supply and Distribution of ApeCoin
ApeCoin has a maximum supply of one billion APE tokens. When these one billion tokens were launched in March 2022, the largest share of the pool, 620 million tokens, or 62% of its total, was distributed to the ecosystem fund.
From this, 150 million went to Bored Ape Yacht Club and Mutant Ape Yacht Club holders, and the remaining 470 million tokens were given to the DAO treasury fund.
A further 160 million tokens were distributed to Yuga Labs, with 150 million tokens going to Yuga Labs directly. The other 10 million tokens were sold, and proceeds were given to the Jane Goodall Legacy Foundation, which specialises in saving real-life chimpanzees.
Another 140 million tokens were paid out to early investors, and the remaining 80 million tokens were distributed to the founding four behind Yuga Labs.
What is ApeCoin?
APE is an ERC-20 token, which means it is a fungible token created on the Ethereum blockchain and doesn’t run its own blockchain. Running on top of the Ethereum network also means there is no mining for APE tokens, as Ethereum uses Proof-of-Stake to validate its transactions.
Typically, when running a Proof-of-Stake consensus mechanism, those looking to secure the ecosystem would stake to the network.
Currently, this is still in development for ApeCoin, and there is no way to stake APE to the ApeCoin network at the time of writing. However, APE can still be staked to other networks for varying rewards.
The benefits here are that the network is already well-established, popular, and has been well-tested by this point. As such, there aren’t the same security concerns as when starting your own blockchain from scratch.
Additionally, it is easier to plug into an already well-utilised blockchain than to siphon users toward your own.
Since ERC-20 is a token standard, all tokens become interoperable with the entire Ethereum network. This means if you want to use Ethereum’s smart contract features, APE can be used as a payment method alongside any other ERC-20 token.
What is the difference between ApeCoin and the Bored Ape Yacht Club (BAYC) collection?
1. Fungible Vs. Non-fungible tokens
The difference between APE, a fungible token, and their BAYC collection – which are non-fungible tokens – is that every APE coin is equal to another. As there is no difference between any two, they can be exchanged for any other APE coin and be worth the same value – the same way you could trade a dollar for any other dollar, and it would also be worth a dollar.
Non-fungible is the opposite and means no two are exactly the same. While BAYC, MAYC, and BAKC all feature unique visual differences between each NFT, in general, their differences can be more subtle – such as only the issue number, series, or the backing colour changing.
2. APE as medium of exchange on Ethereum network
APE tokens are also used as a medium of exchange on the Ethereum network and, as such, can be used to pay transaction fees, stake, participate in DeFi, or just generally when using apps on the blockchain.
3. APE as governance tokens for the APE ecosystem
Additionally, APE tokens act as the governance token for the APE ecosystem and are expected to play a key role within the economy of Otherside.
As the network is run by a Decentralised Autonomous Organisation (DAO), the funds distributed by the APE Foundation are voted on by APE token holders.
The DAO members also vote on other issues affecting the community, such as the direction of the ecosystem’s growth, which rules are written and enforced, which projects to pursue, and which partnerships to target.
The DAO is also responsible for voting the APE Foundations board members, of which there are only five board seats, giving those with APE in their holdings a lot of control over the project’s management direction.
Those who hold the most APE holdings have the most weight to their vote. The logic is those with the most invested have the most to lose and are therefore most likely to act in the network’s best interest overall.
ApeCoin’s involvement in blockchain games
Lastly, APE can also be used for buying “land” in the Otherside, Yuga Labs’ metaverse.
When this land became available for sale, the only way to acquire it was with ApeCoin. The initial land sale event in April 2022 was so popular that it caused the largest volume of traffic to hit the Ethereum blockchain this year.
Although nothing has been completed yet, the recent partnership with Animoca Brands has made it one of the most anticipated metaverse projects due to Animoca Brands already having successful NFT blockchain games under their banner, like Revv Racing and The Sandbox.
Additionally, off-chain they have created games under the WWE, Siegecraft, and Power Rangers licenses, which has left investors and potential players curious about what the partnership could create together.
At present, Otherside looks to be the point where all of the Yuga Labs products meet, and APE will be the currency that binds them together. In addition, there are rumours that NFTs from the Yuga Labs collection will turn into playable characters within the open-world game, though only time will tell if it can live up to the hype.
While some discredit APE as another memecoin, after having Yuga Labs valued at $4 billion thanks to raising over $450 million in private funding, there is a lot of capital waiting to be invested in turning this once-simple NFT collection into an entire ecosystem, complete with its own metaverse.
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