Introduction

ApeCoin is an ERC-20 Governance and Utility Token with the aim to hand over the control of the APE ecosystem to BAYC and MAYC NFT holders, expanding the ecosystem to cover a wider user base while supporting the creation and development of new products and services and facilitating the governance of decentralized community in the form of DAO. As the open source protocol layer of this ecosystem, ApeCoins are used for community governance, incentive measures, pass permits, and consumption methods.

20,000 users are holding BAYC and MAYC NFTs, currently including celebrities such as Stephen Curry, Justin Bieber, and Neymar Jr. According to APE’s official announcement, BAYC holders are able to receive at least 10,094 tokens while MAYC holders receive at least 20,402 tokens, with a total supply of 1 billion and an online circulation of 300 million.

The Development of ApeCoin

2021 witnessed the booming of NFT and the birth of the Bored Ape Yacht Club (BYAC). As a popular project, BYAC has also become one of the highest-rated blue-chip projects in the NFT community, backed by a list of big names. In October 2021, BAYC revealed the plan to issue tokens, which would be launched in the first quarter of 2022 due to the preparations required to build an economically sustainable and legally compliant token with the hope that it would expand the BAYC ecosystem and benefit club members in governance.

On March 17, 2022, shortly after acquiring the intellectual property of the renowned NFT projects CryptoPunks and the MeeBits, Yuga Labs announced the fresh launch of ApeCoin DAO and the issuance of ApeCoin independent of the Yuga Labs team, aiming to migrate traditional art creation, games, leisure and business into the metaverse of web3 as a community-driven decentralized protocol layer. As a reward for club membership, a minimum of 10,094 tokens would be airdropped to BAYC holders while a minimum of 20,402 tokens to MAYC holders.

On March 19, Yuga Labs released a trailer for a metaverse game called “The Otherside” on Twitter, where ApeCoins would be used as the currency of circulation. Soon after, ApeCoins were accepted by many offline merchants. For example, an owner set up a BAYC-themed restaurant, Bored & Hungry in Long Beach, southern California, where users could pay four ApeCoins for a burger. A beer manufacturer also announced on Twitter that those who paid with ApeCoins on site would enjoy a 50% discount. Time, the well-known magazine, stated that the digital subscription service would be available to APE in the coming weeks in addition to BTC, XRP, ETH, and DOGE. E11Even Residences in Miami also decided they would accept APE as a payment to buy apartments, making it the first supporter of cryptocurrencies in the real estate industry.

People are gathering in the BAYC-themed restaurant, Bored & Hungry, in Long Beach, California

Yuga Labs and the APE Ecosystem

Yuga Labs is a well-known NFT creation and marketing company founded by Gargamel and Gordon Goner (both of whom have adopted pseudonyms). Prior to their partnership, Gargamel was a writer and editor, and Goner was planning to study for a Master of Fine Arts degree before turning to cryptocurrency trading due to illness.

Neither of them was an expert trader, and they were more interested in literary and artistic creation than crypto trading. Fortunately, the rise of NFT avatars provided the opportunity for them and they successfully grabbed it with the launch of the amazing Bored Ape Yacht Club in May, 2021, which embarked on a fantastical journey through the world of NFT and the metaverse.

Yuga Labs is named after Yuga, the villainous character in The Legend of Zelda, who can turn enemies into 2D graphics. The founders are said to be veteran gamers, having played a variety of games such as World of Warcraft, EverQuest, and Star Wars Galaxies.

Yuga Labs acquired the intellectual property of CryptoPunks and Meebits in March 2022, followed by the expansion of the community and the establishment of ApeCoin DAO, another wave of NFT and cryptocurrency applications are expected to emerge.

Bored Ape Yacht Club (BAYC)

Bored Ape Yacht Club (BAYC) is the first NFT series released by Yuga Labs in April 2021, which was inspired by the idea that early cryptocurrency investors would all be billionaires by 2031, and they would feel very bored at that time resulting in a group of bored apes gathered at a country club to sit around and wile away the time.

Apes was chosen as crypto traders often deride themselves as apes when behaving irrationally in trades. There are 10,000 Ape NFTs on Ethereum and each has its own look, style, and rarity. Bored Ape holders are able to participate in BAYC’s exclusive club and events and other projects will also be invited or attended as sponsors due to their popularity.

Mutant Ape Yacht Club (MAYC)

Mutant Ape Yacht Club (MAYC) was released in August 2021 as an offshoot collection derived from BAYC with twice the number of BAYCs, totaling 20,000. Half of them were air-dropped to BAYC owners, and the other half were sold through auctions. To get a Mutant Ape, a Mutant Serum is needed first as it can create a Mutant Ape of different appearances based on the original BAYC. Each BAYC can only produce a mutant version from a single serum, and the serum will be burned after that.

Mutant serums can be obtained from airdrops or purchased on the secondary market in varying degrees of rarity. Only eight serums in the highest grade were available, one of which sold for nearly $5.8 million. The release of MAYC is a way of welcoming more members into the APE Ecosystem and expanding its rapidly growing global community of BAYC.

Bored Ape Kennel Club (BAKC)

Bored Ape Kennel Club (BAKC) tends to offer up a dog NFT as the best friend of Bored Ape for adoption to every single member of the BAYC for free. However, adopters have to decide within six weeks whether they are willing to pay the gas fee.

BAKC has different attributes and rarities similar to BAYC, and nearly 400 of them were not adopted, leaving 9,602 BAKCs in circulation. A 2.5% royalty is collected from BAKC on-chain trading and will be donated by Yuga Labs to charity.

The Otherside Metaverse

The Otherside is a metaverse game platform created by Yuga Labs and Improbable, a metaverse technology company. Developed by the technology known as M² networking, more than 10,000 players are able to be in the same scene surrounded by immersive sound and lighting without any delay or lag, while each player has an individual character appearance.

The Otherside was first revealed in a short trailer posted by Yuga Labs on Twitter, and players who wanted to experience it needed to purchase the virtual land on the NFT project Otherdeed for Otherside and became the holder before getting access to the game. Otherdeed NFTs sold out within 24 hours after the sale on April 30, 2022, since purchases were made on Ethereum using ApeCoins, the rush to buy the NFTs caused the mining fee to skyrocket, and some users even spent thousands of dollars in Gas Fee.

First Trip, a technical demonstration held on July 17, attracted as many as 4,500 players, in which players, called voyagers, embarked on The Voyager’s Journey in a total of 11 chapters to explore the mysterious obelisks that appear in the Otherside world. In the First Trip, players first appear in an area called Infinity Space, where the mysterious creature Koda opens a portal and the voyagers enter into another world and participate in a series of storylines. A lot of players shared trial videos and experiences after playing the First Trip, most of which were positive and full of expectations for the different adventures in the follow-up open world of The Otherside.

The Otherside has three principles according to its litepaper:

1. Built for and by the community

2. Genuine ownership and interoperability

3. Real incentives and support

Only designated third-party development teams and holders of Otherdeed NFTs are allowed to jointly construct the game in the initial stage of development. Players can build and collect resources on purchased virtual lands while a few rare ones are inhabited by mysterious creatures called Koda, creating a community-based metaverse with other players. Thanks to the cross-platform function, NFT assets held by players can be easily transferred in addition to bringing NFT collectibles from their wallets into the game. When the trading market Agora is developed in the near future, ApeCoins will be used as a currency to support in-game creative economy and value exchange, as well as outside the game.

The Otherside

ApeCoin DAO and the APE Foundation

The ApeCoin community is governed through the ApeCoin DAO, which provides funds to support the implementation of proposals and projects. ApeCoin holders are members of the ApeCoin DAO who have the right to initiate an ApeCoin Improvement Proposal (AIP) to participate in the governance, and the proposals that have passed by the voting process will be signed and recognized by the ApeCoin Foundation.

In addition to supporting the ApeCoin DAO in proposals, the ApeCoin Foundation is primarily responsible for daily operations, bookkeeping, project management, and other matters necessary to ensure that the ideas and concepts of the ApeCoin DAO community are realized. There are five members of the ApeCoin Foundation at its inception, namely:

1. Alexis Ohanian - Co-founder of Reddit

2. Amy Wu - Head of investment, M&A, and gaming initiatives at FTX

3. Maaria Bajwa - Head of Sound Ventures

4. Yat Siu - Co-founder and Chairman of Animoca Brands

5. Dean Steinbeck - General Manager and Legal Advisor of Horizon Labs
   

Source: ApeCoin DAO

The initial term of the ApeCoin Foundation members is 6 months, after which the community will vote annually to decide new members. As an active community, the ApeCoin DAO has already initiated nearly 70 AIP proposals in less than 4 months of its existence. The hotly debated “AIP-41: Keep ApeCoin within the Ethereum ecosystem” was passed by the community with over 7 million votes, Yuga Labs’ proposal to move ApeCoin to another public chain was rejected as a result.

Make the Club Larger

If BAYC created by Yuga Labs is for high-net-worth individuals, then the ApeCoin issued by ApeCoin DAO is for the general public as the latter allows more users to join the APE community without having to buy NFTs with limited quantities and high price while experiencing the unique BAYC community culture and building the APE ecosystem through various games, art, education, peripheral goods and other events.

According to ApeCoin DAO, the total amount of APE is 1 billion, of which 15% was airdropped to BAYC and MAYC holders, 47% was transferred to ApeCoin DAO as an ecosystem development fund, 15% and 8% were rewarded to Yuga Labs and its founders respectively (will be released gradually after one-year), 14% was distributed to the launch partners that help the establishment of ApeCoin DAO, and 1% was donated to the Jane Goodall Legacy Foundation.

The focus of ApeCoin Ecosystem in the first year will be the development of games, activities, peripheral products, marketing, education, and NFT markets, as the approved AIP-3 suggested. At the same time, according to AIP-70, which was approved at the end of June, THE BORED APE GAZETTE will be funded as a social media news platform of ApeCoin and BAYC to help people learn more about the APE ecosystem and keep track of the latest information.

Source:Bloomberg

Source: @CryptoKaplan"">https://medium.com/@CryptoKaplan

Controversy about ApeCoin

Although ApeCoin has received countless positive reviews since its launch, while a great number of investors are optimistic about the potential of its NFT project with governance tokens, there are still some criticisms regarding its hidden concerns.

On the first day of ApeCoin’s listing on the major exchanges, the highest quotation on the spot market was $40, while the most common on-chain quotation was $14. However, the close price that day was only $8, which dropped by 75% and 40% respectively compared to the two quotations. To make matters worse, the recent low of ApeCoin even fell to $3, leading to criticism of hype and plunge.

As for the allocation of ApeCoins, the proportion of Yuga Labs and its partners has been questioned as they will eventually obtain 37% of the total circulation, which is suspected to be a way to profit from the investors. The airdrop of free tokens for BAYC and MAYC holders while others have to pay for them, is also seen as a way to please the community, making the rich richer and the poor poorer.

It has also been questioned as a deliberate market operation and a huge waste of resources due to the hundreds of times increase of Gas Fee when Otherdeed for Otherside started sale on OpenSea, and the proposal made by Yuga Labs to migrate ApeCoin from Ethereum. At the time of writing, Otherside’s floor price has dropped from 6.89 ETH to 2.1 ETH, which seems to confirm that the initial irrational snapping up was just a commercial marketing tactic.

The future development of ApeCoin involves the development of different application layers of blockchain, which can’t be achieved by community management and event marketing alone. Whether ApeCoin can continue to retain its value depends on the implementation of more applications and the construction of its APE ecosystem.

Conclusion

ApeCoin is a governance and utility token issued by ApeCoin DAO, following Yuga Labs’ stunning performance in the NFT market in 2021, and immediately attracted attention and enthusiasm after its launch. Based on the NFT community of BAYC, Cryptopunks, and Meebits, Yuga Labs pushed its influence to the wider people through ApeCoin, greatly reducing the gap between NFT and the public.

ApeCoin is also one of the most eye-catching cryptocurrencies in real-life applications as it was accepted as a payment method in just a few months after its launch by a list of merchants, such as fast food restaurants, beverage operators, real estate companies, and online service platforms, considering the high popularity and commercial benefits of BAYC. This is unprecedented in the history of cryptocurrency and has become a model for cryptocurrencies to enter the traditional business.

The Otherside metaverse is ambitious in developing the application scenario of NFT and cross-platform integration while promoting the Web 3 economy through ApeCoins. All participants are expected to freely express their inspiration and talent and engage in various activities such as art, games, creation and performance, so that cultural and artistic values can be spread and realized more easily.

If the DeFi ecosystem on Ethereum is the financial settlement layer of blockchain, then the booming NFT and gaming market from ApeCoin is expected to be the cultural settlement layer of blockchain. With the development of IoT and AR/VR, each of us may be one of an ape living in the metaverse in the future, while NFT and related applications are ubiquitous.