Developed by Yuga Labs, the Bored Ape Yacht Club (BAYC) is a series of NFT profile pictures depicting disinterested-looking apes with randomly generated traits. The collection of 10,000 NFTs was launched in April. They are minted on the Ethereum blockchain and individual Bored Apes have sold for millions apiece.
The NFT project has recently received backing from major names in the pop world. In November, the Rolling Stone magazine partnered with BAYC to release a collection of 2,500 limited edition paper zines, with Bored Apes on the cover. Soon after, Universal Music Group, the world’s biggest record label, announced that it would be creating a metaverse group called Kingship. The group’s avatars will be based on BAYC NFTs.
Bored apes are a status symbol. If you’ve got one, you’re in the cool club. However, at a certain point, this elitist reputation loses its allure. When the average investor realizes they’re never going to have one, the interest starts to fade.
Compare this to luxury brands like Rolex and Louis Vuitton. For sure, they have products that cost more than your dream house. But they still offer products attainable for the upstart. This keeps them popular amongst both the über wealthy and the average joe.
So what are Yuga Labs doing to fix this problem?
Introducing Apecoin. A cryptocurrency founded in 2022 that boomed into the top 50 cryptocurrencies by market cap, seemingly out of nowhere. With lots of press and lots of skepticism in the air, we’ll be breaking Apecoin down in this Simply Explained.
What is it? Where did it come from? Is it a scam?
Think of Apecoin as the lower ticket product offered by YugaLabs. With the price sitting around $12, it’s a lot more accessible than a $300,000 NFT. It’s a win-win-win. Yuga Labs now has an additional revenue stream. The holders of BAYC NFTs get airdropped Apecoins for being NFT holders. And the average investor can now get exposure to one of the biggest NFT projects in the world at an accessible price point. But is it really that simple?
Origin, founders, and team
Yuga Labs are the owners of Crypto Punks, BAYC, and Meebits- an impressive background to say the least. That being said, Yuga Labs claim not to have founded the Apecoin project. Everywhere you look you can see Yuga Labs stating that they take zero responsibility for the success or failure of the project.
They are, however, undeniably big contributors and beneficiaries. Yuga received 150,000,000 coins (15% of the total supply) and every BAYC holder was airdropped 10,000 tokens.
They have also publically stated that Apecoin will be the primary token used in Yuga Labs projects.
We hypothesize that this dissociation is simply a way for the company to cover its backs if anything is to go wrong. It’s strange, and a lot of people aren’t happy about it, but it can be understood when looking at it through a business lens.
So if they didn’t start it, who did?
Introducing Apecoin DAO
A DAO is a decentralized autonomous organization. The simplest way to understand it is as an organization that is not controlled by a select group or individual. Instead, the power is held by the organization as a whole. Picture a company that instead of being run by a CEO and other executives, is run by everyone, with everyone having a say in how the project is run.
Now it’s not as simple as that, and in this case, the formation and support of the DAO were from an entity called Ape Foundation.
This is where it gets a bit confusing and messy. Think of Ape Foundation as the CEO and the executives. Seems contradictory right?
If you’re a holder of Apecoin you do have voting and governance privileges. But what are you voting on and does your vote really count?
Well, the power of the vote operates less so as a vote for a bill, and more so like a vote on an election. Apecoin holders will be able to vote on the board members of the Ape Foundation.
The board is then responsible for executing the wishes of the community, plus day-to-day administrative tasks such as bookkeeping and project management.
So, is it really a community-governed project? With decentralization being a big selling point, it’s a bit confusing when your voting power is limited. When assessing the tokenomic allocation, the questions only seem to pile up further.
What does Apecoin do?
ApeCoin is a utility and governance token. It’s basically a decentralized token that can be used for payments and transactions within Web3 apps of all sorts, even those not created or controlled by Yuga Labs or related to the Bored Ape Yacht Club.
The Tokenomics of Apecoin.
1 billion tokens are the fixed supply set for Apecoin. The launch was carried out on the 17th of March, with 30.25% being distributed. The rest of the tokens are set to be distributed intermittently over a 4 year period.
47% of the token supply is going to the DAO treasury and resources.
15% of the supply is going to Yuga Labs.
15% of the token supply will go to NFT holders.
14% to contributors (Venture capitalists).
8% will go to the 4 founders of Yuga Labs.
1% to a charity.
Interesting right? They claim decentralization. They present themselves as a DAO. But with such a high allocation to such a minority, the motive and plans become questionable. Well, we’re not here to speculate and judge.
