Unmasking ApeCoin (APE): The Dynamic Journey of BAYC Token in the Crypto World

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Unmasking ApeCoin (APE): The Dynamic Journey of BAYC Token in the Crypto World

By CoinUnited.io Research Team

14 Jul 2023

7 min read

Understanding ApeCoin (APE): An Insight

ApeCoin, primarily associated with the Bored Ape Yacht Club (BAYC) ecosystem, is an ERC-20 token founded on the Ethereum blockchain. NFT collectors and Bored Ape NFT owners highly value this digital asset, which is often presented as a decentralized protocol layer for community-driven schemes.

The Nature of ApeCoin

For those curious about ApeCoin, it is pertinent to note that it serves as the governance token within the Bored Ape ecosystem. This characteristic fetched a vast audience after the Bored Ape Yacht Club (BAYC) NFT venture witnessed a significant surge in its fame.

ApeCoin: Beyond A Meme Token

Although some might dismiss ApeCoin merely as a meme coin, the underlying utility of this digital asset surpasses its role as a governance token for Bored Ape stakeholders. This enhancement can be attributed to its expanded ecosystem featuring NFTs and a metaverse.

The Investment Potential of ApeCoin

The wide-ranging utilities of ApeCoin, coupled with the BAYC ecosystem, transform it into a prospective long-term investment avenue for those optimistic about the Bored Ape Yacht Club ecosystem.

Exploring the ApeCoin (APE) Universe

ApeCoin serves as the operational token of BAYC, a prominent NFT project instigated by Yuga Labs. Hence, ApeCoin could rightfully be called the offspring of this enterprise. BAYC's creation is attributed to the collective efforts of its four founders, among whom Floridians Greg Solano and Wylie Aronow stand out.

Management and Leadership of ApeCoin

According to the BAYC-dedicated website showcasing ApeCoin, the coin's inception and subsequent governance rest in the hands of ApeCoin's Decentralized Autonomous Organization (DAO). In simpler terms, holders of APE coins or associated Bored Ape NFTs hold voting rights to influence protocol amendments and new project developments. The central body presiding over the DAO is the Ape Foundation. This foundation, tasked with actualizing the community's innovative ideas, operates under the leadership of five leading crypto investors. Each of these chosen executors serves a tenure of one year.

The Special Council of Ape Foundation

The current leadership of the Ape Foundation, also referred to as the Special Council, comprises of individuals known by their pseudonyms - Bored Ape G, Gerry, Vera Li, Waabam, and CaptainTrippy. Waabam and CaptainTrippy earned their seats at the council table through a vote facilitated by the ApeCoin DAO. They succeeded Alexis Ohanian, Reddit co-founder, and Yat Siu, the chairman of Animoca Brands, commencing their tenure from July 1, 2023.

Understanding the Phenomenon of Yuga Labs

Primarily known for its pioneering efforts in the non-fungible token (NFT) industry, Yuga Labs is the creative brain behind the well-known ApeCoin and the highly esteemed NFT, the Bored Ape Yacht Club (BAYC). BAYC made its debut in April 2021 and, its rise in popularity was astronomical, prompting Yuga Labs to diversify its NFT portfolio. This diversification took form as the Mutant Ape Yacht Club and the Bored Ape Kennel Club.

Expanding the Virtual Ecosystem

In efforts to further engage its audience, Yuga Labs embarked on two significant ventures. Firstly, they set the foundation for a gamified universe named 'Otherside', which heavily incorporates the usage of ApeCoin within its architecture.

NFT Acquisitions by Yuga Labs

Yuga Labs' second major initiative was their acquisition of two of the most sought-after NFTs in the industry: CryptoPunks and The Meebits. The move was seen as a strategic effort to bolster the use of ApeCoin. CryptoPunks: Touted as one of the earliest non-fungible NFTs on the Ethereum blockchain, CryptoPunks is a unique collection of 10,000 digital characters, each formed using pixel art. The Meebits: On par with the novelty of CryptoPunks, The Meebits comprise of 20,000 unique 3D voxel characters, each of which are registered on the Ethereum blockchain. With their varying degrees of uniqueness, these characters continue to intrigue an increasingly digital generation.

Unveiling the Exclusive Bored Ape Yacht Club (BAYC)

The crown jewel of Yuga Labs, the Bored Ape Yacht Club (BAYC), is a premier NFT collection that comprises of 10,000 distinctive cartoon-esque ape NFTs powered by the Ethereum blockchain. The BAYC phenomenon exploded on the digital landscape, drawing major backing from celebrity powerhouses, including the likes of Justin Bieber and Madonna.

The Meteoric Rise of BAYC

Seizing the digital stage with a dynamic entry, the Bored Ape Yacht Club didn't take long to gain traction. The Ethereum-based NFT collection stirred considerable interest among the elite and famous, with renowned artists such as Madonna and Justin Bieber publicizing their endorsement.

BAYC: The NFT Sensation

Renowned worldwide for its engaging and unique illustrations of apes, the BAYC holds a spot in the extensive universe of NFTs. This exclusive collection consists of 10,000 exceptional, cartoon-style ape non-fungible tokens residing on the Ethereum blockchain, further cementing its reputation as the frontrunner in the rapidly evolving realm of digital collectibles.

Endorsement by Celebrity Titans

BAYC's skyrocketing success isn't just due to its novelty and aesthetic appeal. The project has caught the attention of substantial celebrity figures such as Madonna and Justin Bieber, whose public support has put BAYC in the spotlight, helping it to achieve unprecedented levels of global recognition.

Exploring the Mutant Ape Yacht Club (MAYC) Phenomenon

In August 2021, a unique digital art collection emerged by the name of the Mutant Ape Yacht Club, often abbreviated as MAYC. This collection comprises 20,000 non-fungible tokens (NFTs) featuring mutated variants of the iconic Bored Ape Yacht Club (BAYC) apes.

The Intersection of Bored and Mutant Apes

At its core, MAYC serves as a daring reinterpretation of the original Bored Apes, presenting them in their mutant forms. Owners of BAYC apes have the privilege to generate their unique MAYC NFTs due to a sophisticated smart contract, which employs so-called Mutant Serums on their Bored Apes.

Variety in Mutation: The Influence of Mutant Serums

Delving deeper into the concept of mutation, one discovers the presence of three distinct Mutant Serums in this digital ecosystem. Each serum opens the door to new transformation possibilities, meaning that a single Bored Ape NFT under the possession of a BAYC holder could potentially birth up to three individual Mutant Apes.

Distribution of Mutant Ape NFTs and Mutant Serums

The launch of the MAYC was marked by a substantial sale and giveaway event. During this time, 10,000 Mutant Ape NFTs were offered to the public for purchase. Simultaneously, another 10,000 Mutant Serums were handed out to present BAYC holders through an airdrop, reaffirming their loyalty to these cryptographic creations and the community they embody. In summary, the Mutant Ape Yacht Club, launched in 2021, offers a refreshing take on the Bored Ape NFTs, providing original owners with the means to mutate their Bored Ape NFTs into mutated versions. Mutant Serums facilitate this transformation, and the simultaneous public sale and airdrop event enriched the NFT market while rewarding BAYC holders.

Overview of the Bored Ape Kennel Club (BAKC)

The Bored Ape Kennel Club, often referred to as BAKC, is a renowned collection of novel, cartoon-styled dog Non-Fungible Tokens (NFTs). Introduced to the digital world in July 2021, this captivating assortment of NFTs operates under the ingenious development of Yuga Labs.

The Association between BAKC and Bored Ape Yacht Club (BAYC) Holders

These unique canine NFTs were conceived as a gratuitous perk for holders of the Bored Ape Yacht Club (BAYC) tokens. Nevertheless, these NFT pet owners are obliged to cover the costs of virtual gas fees associated with the minting process of these tokens.

Characteristics of the Bored Ape Kennel Club NFTs

Although the digital pets are entirely distinguishable by their individual features, each one pays homage to the Shiba Inu breed—a dog breed that has seen its fame explode due to its association with popular dog-themed meme cryptocurrencies. In particular, these currencies include the well-known Dogecoin (DOGE) and Shiba Inu Coin (SHIB). Each character within the Bored Ape Kennel Club catalog is portrayed as this particular breed, further reinforcing the breed's prominence in the crypto-currency world and beyond. This unique dynamic adds an extra dimension of appeal and relevance, as the Shiba Inu dogs have become symbolic representations within digital crypto culture.

Navigating the Metaverse: An Introduction to Otherside

Artificial realms have taken over the digital space, with Otherside leading the fray. Unveiled a year after the inception of the Bored Ape Yacht Club (BAYC), Otherside is a groundbreaking 3D metaverse product of a synergistic alliance between BAYC and Animoca Brands, a reputable game software company based in Hong Kong.

The Pioneering Charm of Otherside's Metaverse

This digital cosmos, known as Otherside, grants users the freedom to craft their own distinctive dimensions. These dimensions star the innovative Otherdeed Non-Fungible Tokens (NFTs), synonymous to land parcels within this virtual ecosystem. What makes these NFTs extraordinary is their unique property - they possess the intriguing capability to develop and alter with the passage of time.

Engaging Gameplay Experience with Otherside's Unique Narrative

Otherside's progressive allure doesn't end there; it also incorporates an immersive 11-part storyline that enriches the narrative gameplay for its users. This interactive narrative ensures a compelling engagement, adding depth to the virtual exploration of the metaverse.

Fascinating Aspects of the Otherside Landscape

The fictional terrain of Otherside unifies components of stellar expanses and peninsular landscapes. These landscapes buzz with extraordinary creatures, coveted resources, and hidden treasures, stimulating greater exploratory interest for users. Such a unique blend of cosmic and earthly elements contributes to the overall charm of Otherside's metaverse.

Functioning of Transactions in Otherside

The intricate operations within the metaverse of Otherside are propelled by the exclusive ApeCoin (APE). This token serves as the primary medium for all transactions, reinforcing the seamless and harmonious functionality of the expansive virtual realm. This innovative structure provides the metaverse with its distinct operational edge, reinforcing Otherside's sterling reputation in the digital landscape.

Exploring the Multiple Applications of ApeCoin

ApeCoin presents its potential far beyond the confines of simple governance. To illustrate, ApeCoin functions as the core utility token fueling the ambitious metaverse project dubbed Otherside, which aims to extend the reach of the BAYC world.

Integrating ApeCoin in Various Gaming Environments

Notably, Animoca Brands, in collaboration with Yuga Labs, envisions incorporating ApeCoin into an assortment of entertainment avenues. This amalgamation includes integrating ApeCoin in both blockchain-centric games and traditional gaming formats, as well as an array of other products. Benji Bananas: A Unique Avenue to Earn ApeCoins One captivating application of ApeCoin is its integration in Benji Bananas. This fascinating free-to-play, mobile action-adventure game introduces players to the enchanting world of Benji, an endearing monkey, and his companions, as they navigate through dense jungles. This integration encourages players to amass ApeCoins as part of their gaming experience.

A New Era: Transition to Play-to-Earn Model

On a significant note, Animoca Brands unveiled a landmark announcement on March 17, 2022 - the transition of Benji Bananas to a play-to-earn format founded on the Ethereum platform. In this new model, players have the opportunity to earn tokens that they can subsequently exchange for ApeCoins, thereby augmenting the practical applications of this influential cryptocurrency.

Exploring the Process of ApeCoin Staking

Beginning in December 2022, ApeCoin (APE) introduced an option for staking its tokens. As of December 5, users have the opportunity to secure their APE investment on ApeStake.io, paving the way for accumulator rewards to start from December 12 onwards.

Distribution of APE Rewards

In the initial year, a whopping 100 million APE tokens are getting disbursed into the staking pools as incentives. The distribution system is determined as follows: the ApeCoin Pool receives about 30,000,000 tokens, the Bored Ape Pool is assigned 47,105,000 tokens, the Mutant Ape Pool gets 19,060,000 tokens, and the Pair (BAKC) Pool is allocated 3,835,000 tokens.

Four Pathways to Stake ApeCoins

There are four distinctive strategies to stake your ApeCoins. It is paramount to remember that if you decide to divest your Non-Fungible Token (NFT) while it is staked in its respective pool, the entire staked rewards will be transferred to the new proprietor. Hence, it is highly recommended to unstake your NFT prior to selling it, to avoid losing your earned rewards.

The Economics Behind ApeCoin

ApeCoin's overall availability has a top limit of 1 billion units, which have been allocated to four primary clusters. The aim of this distribution model is to prevent...

A Deep Dive into ApeCoin's Distribution

ApeCoin's Distribution Mechanism Explained The complete number of ApeCoin tokens that will ever be produced is set at 1 billion. With the goal of fostering a healthy ecosystem, these tokens are divided among four crucial entities. This allocation strategy helps to inhibit...

Delving into the ApeCoin DAO

With a grasp of ApeCoin's premises, our attention can now shift towards exploring the ApeCoin DAO, the all-important decentralized governance system underpinning the BAYC ecosystem and ApeCoin. Simply defined, every holder of APE is an integral part of the ApeCoin DAO, owning a stake and sharing voting privileges.

Joining the ApeCoin DAO

This democratic, decentralized assembly acknowledges anyone as a member, provided they buy an Ape NFT. As set by its founding team, the primary objective of the ApeCoin DAO is to empower its members by abiding by their chosen directions.

Operations of the ApeCoin DAO

The DAO instigates diverse proposals via the APE Improvement Proposal process. These proposals are guided by the communal rules and broad aspirations of the BAYC cohort. When the ApeCoin DAO votes on any proposed plan, the responsibility of implementing the outcome rests on the APE Foundation. In essence, the ApeCoin DAO's function revolves around reflecting the collective will of its participants. It subsequently delegates the execution of approved initiatives to the APE Foundation, highlighting a democratic and effective operational mechanism.

The ApeCoin Debacle: A Detailed Analysis

Even with its splendid inauguration, ApeCoin hasn't been able to steer clear of contentious issues. Let's delve deeper to understand some of the controversies this digital currency has faced.

Scrutinizing the Controversies Surrounding ApeCoin

Despite its dazzling debut, ApeCoin has been riddled with significant levels of controversy. Each of the disputes it has become entangled in demand close examination for a comprehensive understanding.

ApeCoin's Inception and Controversial Token Allocation

ApeCoin, during its inception day, encountered its inaugural dispute revolving around its token distribution approach. Interestingly, this approach seemed to have a slant in favor of insiders and the founders of Bored Ape Yacht Club (BAYC), who were entitled to a significant chunk of 22% of the entire token allotment.

Yuga Labs' Profits and Stakeholder Distribution

In an equally noteworthy turn of events, Yuga Labs, the mastermind behind ApeCoin, was set to inherit an impressive 16% of the total proceeds. Additionally, a subsequent distribution saw nearly 14% - translating to a whopping 140 million tokens - being divided among contributors who were integral to the launch. Various sources intimated that a substantial number of these beneficiaries were venture capitalists. This distribution scheme has triggered critics to perpetuate doubts over the true nature of the ApeCoin Decentralized Autonomous Organization's (DAO) decentralization.

Launch Day Price Volatility

The day of ApeCoin's debut was a roller coaster ride. The price per ApeCoin unit skyrocketed to an unprecedented $40 only to experience a sharp decline and settle around $8. This sudden and drastic fluctuation prompted suspicions of insider trading amongst various observers.

Unveiling the Flash Loan Attack Incident

In the world of blockchain and cryptocurrency, a security flaw recently came to light surrounding a token airdrop. The company in concern, Yuga Labs, overlooked a critical security aspect - the snapshot mechanism - which is generally utilized prior to a token airdrop to ensure the eligibility of only long-standing NFT holders. Unfortunately, this loophole made it possible for any individual to purchase an NFT just before claiming the reward, thereby exposing the process to a potential flash loan attack.

Potential Abuse of the Loophole

Detailed examination revealed that an opportunist indeed exploited this oversight. The attacker smartly figured out a way to pledge an NFT from Bored Ape Yacht Club (BAYC) as collateral on OpenSea. Shockingly, the collateral amount was less than $300,000. It was then used as a flash loan from a vault known for tokenizing NFTs.

The Unexpected Outcome

Usurping the opportunity, the exploiter, with the borrowed BAYC NFT, managed to redeem several more Bored Ape NFTs and lay claim to 60,564 APE. In a stunning turn of events, they liquidated this bounty for a considerably higher profit, which surpassed $800,000. This incident serves as a reminder of the potential vulnerabilities present within the realm of digital assets and blockchain technologies, highlighting the need for strengthened security mechanisms.

Regulatory Challenges

The SEC Investigation of Yuga Labs Halted ApeCoin's Momentum

In the autumn of 2022, a once thriving startup, Yuga Labs, the creators of ApeCoin, found themselves in the crosshairs of the U.S. Securities and Exchange Commission (SEC). The SEC launched an inquiry to determine if ApeCoin and the complementary 'Bored Ape' NFTs had been operating as unregistered securities. While there were no formal charges pressed against Yuga Labs, the repercussions of this regulatory probe were quickly evident in APE's market performance. As news of the investigation spread, investor confidence waned and ApeCoin's value took a hit, plummeting by more than 10% within a singular 24-hour time frame.

Disagreements Over Management Earnings Within ApeCoin's Leadership

The crypto entity ApeCoin recently faced considerable criticism from its base for the arguably exorbitant salaries earned by its Decentralized Autonomous Organization's (DAO) top brass. This internal discord led to a significant drop in APE's value, marking a 28% decrease in a week and bottoming out at $2.08 in June 2023.

Public Outcry Over Special Council Member Salaries

The remuneration received by the members of the Special Council was met with particular skepticism, given their five-digit monthly income. This cumulative total nudges into a six-figure sum annually, leading to growing uncertainty amongst web3 users about these seemingly inflated wages.

Defense from Council Members

In response to such concerns, Special Council members Yat Siu and Vera justified their substantive paychecks, offering comparative examples of leaders in traditional businesses and underscoring the value they bring to the organization. They asserted their contributions warrant robust financial support akin to those seen in public corporations. Engaging in Decentralization Efforts Special Council member Bored Ape G addressed the criticism, emphasizing their contribution to furthering the decentralization of the DAO through shifts in administrative leadership. These efforts reportedly led to a reduction in operational expenses, yielding clear, positive outcomes.

Advocacy for Greater Community Involvement

Nevertheless, many online critics argue that true decentralization should not rest merely on changes in administrative leadership. It should instead invite every community member to partake in critical decisions, including salary determination for Special Council roles. They point out that such important choices should not be made solely by a select few, but rather should include the collective voice of the entire community.

Projections on ApeCoin Value

As per records from July 12, 2023, ApeCoin, a notable player in the cryptomarket, was reported to have a value of $1.92. This displays a significant decrease of 92.8% when juxtaposed with its all-time high (ATH) pricing of $26.70 recorded previously on April 28, 2022. In contrast, it also shows a marginal rise of 3.72% from its all-time low (ATL) valuation of $1.85 as observed on July 7, 2023.

ApeCoin's Prospective Worth: Laying Optimism against Controversies

Even though ApeCoin's trajectory seems to be adversely affected by ongoing disturbances and the downfall of the NFT market, a considerable number of experts retain a somewhat hopeful stance regarding the future potential of APE.

Price Predictions by Analysts

PricePrediction's Analysis One such forecast is made by PricePrediction, which projects a minimum growth that could reach up to $4.57 by the year 2025. This could be followed by a noteworthy surges, potentially crossing the $30 threshold as we approach 2030. DigitalCoinPrice's Evaluation On the other hand, DigitalCoinPrice's forecast shows a more measured growth prediction for ApeCoin. According to their analysis, the value could reach a high of $7.02 in 2025, with a possibility of crossing the $20 mark by the year 2030. This is more conservative when compared to PricePrediction's outlook, but it still signals the potential for steady, albeit slower, growth over the next few years.

Should You Consider ApeCoin as a Worthwhile Investment?

Taking into consideration various aspects, everyone ponders over one question: Is it worthwhile to invest in ApeCoin? ApeCoin certainly had an impressive inception, securing endorsement and backing from numerous renowned personalities, but couldn't maintain its soaring value. The striking plummet in its recent price brings to light its incompetence of preserving long-term value and hints towards ApeCoin being more of a passing fad. Consequently, in spite of reasonably optimistic projections regarding its price forecast, it may prove questionable as a long-term investment.

ApeCoin Amid the NFT Controversy

Specifically, the ongoing controversies surrounding its linked NFT throw ApeCoin's future into a state of uncertainty. Even as ApeCoin's DAO endeavors to infuse greater utility into the token through the creation of the Otherside metaverse, the exact functions it will fulfill remain indistinguishable, even within the context of the metaverse game.

Expansion of Utility in an Evolving Metaverse

Nonetheless, as the metaverse unfolds and the application of the ApeCoin becomes clearer, there could be a positive uptrend in the token's value if the metaverse manages to gain substantial momentum. Yet, this hinges on whether its primary NFT, BAYC, can survive the current turbulent state of the NFT market. Investors who are optimistic about the resurgence of NFTs and are willing to undertake risk may still perceive ApeCoin as a viable investment. After all, BAYC is still exponentially more valuable compared to countless other NFTs. But, it's vital to note that such viewpoints shouldn't be adopted as investment guidance. To INVEST or NOT to INVEST Doing your own intensive research before venturing into investments, especially in wildly fluctuating altcoins, is pivotal. ApeCoin can be traded through various methods on CoinUnited.io. You can either purchase APE as a Spot pair, or trade it as a Perpetual Contract or as a Leveraged Token on the Spot market.

Methods of Trading ApeCoin

You have the option of trading APE as a Spot pair using either USDT (APE/USDT) or USDC (APE/USDC), and to trade APE as a Perpetual Contract, you can use USDT (APEUSDT). While trading APE as Perpetual Contract, you can take a long or short position on APE, using USDT as a margin, without worrying about expiration dates. On the other hand, when trading APE as a Leveraged Token, you can opt to go long or short with APE2L/USDT or APE2S/USDT, respectively. Each Leveraged Token is symbolic of a pool of Perpetual Contract positions. Therefore, when you purchase a Leveraged Token, you're essentially buying a pool of the underlying Perpetual Contract assets. Leveraged Tokens can be beneficial as short-term investments in trending markets. Since Leveraged Tokens don't demand margin or collateral, and because they fall under the Spot category, there's no risk of liquidation.

Final Thoughts

The recent setbacks and devaluation of ApeCoin have resulted in this crypto asset becoming less enticing to prospective investors for the time being. However, a potential revival of interest in non-fungible tokens (NFTs), specifically Bored Ape Yacht Club (BAYC), could trigger a price recovery for ApeCoin. Buyers who are not averse to high-risk investments might perceive this as an advantageous time to procure ApeCoin.

Cautions for Risk-Averse Investors

On the other hand, individuals who prefer low-risk investment options are strongly recommended to tread carefully. It would perhaps be more prudent to consider steering clear of this cryptocurrency token.

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