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Crypto: What is ApeCoin?

·5-min read
A large proportion of the new ApeCoin tokens went to Bored Ape Yacht Club NFT owners — a group that include celebrities such Justin Bieber, Eminem and Jimmy Fallon. Photo: Noam Galai/Getty
A large proportion of the new ApeCoin tokens went to Bored Ape Yacht Club NFT owners — a group that include celebrities such Justin Bieber, Eminem and Jimmy Fallon. Photo: Noam Galai/Getty

ApeCoin is a new crypto-token that was launched on the Ethereum (ETH-USD) network on Thursday.

It was released on major crypto exchanges, such as Binance and Coinbase, with a large proportion of the new token going to Bored Ape Yacht Club NFT owners — a group that include celebrities such Justin Bieber, Eminem and Jimmy Fallon.

But why the hype, and what is the connection between the new crypto-token and the exclusive ape-themed NFT collection?

On Thursday 1 billion ApeCoin cryptocurrency tokens were created and deployed on the Ethereum blockchain by a DAO, or Decentralised Autonomous Organisation.

This DAO is linked to Yuga Labs, the creators of the enormously successful Bored Ape Yacht Club NFTs and its "governance" token is the newly deputed Apecoin.

Thursday's launch of the token saw and immediate feverish buy-in, with the price of each token soaring to $17 on Friday.

The price of ApeCoin has now fallen to settle at $10, with its total market capitalisation now at $1.4bn.

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Due to the public and transparent nature of web3 organisational structures that operate on the Ethereum blockchain, it is public knowledge that 15% of the new tokens have been allocated to Bored Ape Yacht Club and Mutant Ape Yacht Club NFT holders.

Some 37% of the tokens were sent to Yuga Labs, the Bored Ape Yacht Club founders.

Considering the ape theme, 1% of the tokens will go to the Jane Goodall Legacy Foundation.

Almost half (47%) have been funnelled into the ApeCoin DAO treasury fund.

An NFT, or non-fungible token, is a way to digitise and store ownership on the blockchain of a one of a kind asset, such as a piece of artwork.

In April 2021, Yuga Labs, the developers behind Bored Ape Yacht Club released a series of 10,000 slightly different versions of a cartoon ape, some with different apparel, hats, glasses, suits, shirts, and a multitude of other variates.

This collection of digital illustrations was snapped up by many celebrities, such as Justin Bieber and Eminem, with owners often using them as their Twitter profile pictures.

NEW YORK, NY - SEPTEMBER 10:  Justin Beiber performs on NBC's
Justin Beiber is a Bored Ape Yacht Club NFT owner. Photo: Paul Zimmerman/WireImage

The price soon skyrocketed, and an exclusive club of Bored Ape Yacht Club (BAYC) owners was formed.

Ownership of a BAYC NFT granted access to special celebrity events throughout the year in the physical world and in the virtual world, or metaverse.

This power group of BAYC NFT owners, which has a combined wealth of $3bn, is now linked to ApeCoin, the web3 cryptocurrency based company, or DAO.

DAOs coalesce around a shared goal, so what is the shared goal of ApeCoin owners and do they have plans to utilise the financial and social capital of BAYC NFT owners?

Founder and CEO of PANONY Alyssa Tsai said: "I think DAOs are disrupting organisation structure and reward systems, helping founders and builders to rethink what’s possible and create new realities.

"But it will not kill traditional corporations overnight because it is still been shaped to be more mature.

"It will also not necessarily compete with each other.

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"Potentially we might be able to see DAOs buying corporates or corporates setting up DAOs for experiments."

Tsai also said the Apecoin DAO could utilise the financial and social capital of the BAYC NFT community.

"ApeCoin DAO is one of the most aggressive and successful DAOs in the market.

"They have rewarded the community who supported BAYC NFT in a way none of any other NFT projects did.

"Moving forward I think building more utilities, exclusive perks and rights around the community could help it become even stronger."

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A DAO is akin to a traditional corporation, only it does not have to incorporate in any worldly jurisdiction, as it is indigenous to the web.

At present DAOs are not recognised as legal entities in the majority of US states or in the UK.

DAOs do not sell shares but instead sell governance tokens, which give those with the greatest portion of the issued token more power to vote on changes in the organisation or on its future direction.

The governance token linked to Bored Ape Yacht club is ApeCoin, with Yuga Labs as the largest single shareholder

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ApeCoin's official Twitter calls itself "an ERC-20 governance and utility token used to empower a decentralized community building at the forefront of web3".

An ERC-20 token is stored on the Ethereum blockchain and the "governance" aspect of ApeCoin means that it acts like a share in a company.

DAOs use smart contracts to pay invoices automatically and funnel profits to the correct wallets in a transparent way that cuts out intermediaries.

However, to vote on changes to the smart contract, all holders of the governance token must vote to decide on those changes.

ApeCoin’s use case is governance-based, but ownership has other benefits which include access to exclusive games, merchandise, and events.

The supply of ApeCoin is limited, fixed at 1 billion coins.

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