It was announced that members of the NFT Bored Ape Yacht Club collection would be getting their own cryptocurrency, ApeCoin.
The passive voice there’s intentional. Explicitly linked ApeCoin to these notoriously expensive non-fungible tokens and is closely related to Yuga Labs. This organization manages the highbrow assets at the back of Bored Apes. But a cautiously coordinated advertising and marketing campaign went to incredible lengths to dissociate ApeCoin from any mainstream corporation.
Instead, PR messages insist that ApeCoin is made from the ApeCoin DAO; a brand new organizational unit ruled completely with the aid of using token holders. Holding the APE makes you a member of the DAO (which is brief for Decentralized Autonomous Organization; a kind of cryptocurrency-centric online collective); you don’t even want to very own an NFT Bored Ape to participate.
ApeCoin’s official website advertises the token as “a decentralized protocol layer for community-led initiatives that push culture into the metaverse.”
Let’s decode some of those squiggles, shall we?
What is ApeCoin?
ApeCoin is an ERC-20 token, a particular type of cryptocurrency built on the Ethereum (ETH) blockchain. Most tokens were made on Ethereum in the past that were developed using this framework. For example, think of the FWB token, made for the “Friends with Benefits” social club, and WRITE, from Mirror’s Web 3 crowdfunding platform.
Unlike N, these tokens must be “fungible” (as in the case of Bitcoin BTC). Each Ape must have the exact same value as any other AFTpeCoin. They can be bought and sold on a decentralized exchange where users can Trade cryptocurrencies without a middleman.
Almost all major centralized exchanges listed the token immediately after launch. So, this was an achievement in its own right, given the notoriously meticulous nature of major players like exchange Coinbase.
After just one day of trading, the ApeCoin token had a market capitalization of nearly $2 billion; an APE is currently worth around $10, and the total supply of tokens is capped at one billion (not all of them are currently in circulation).
Who is behind the ApeCoin project?
So, according to the ApeCoin website and accompanying press materials; ApeCoin is being launched by the ApeCoin DAO a new governance body of which all APE holders are members. Being part of this group means being able to submit community proposals, which token holders can.
Other NFT projects have given rise to similar motion structures. So when you buy an NFT from a collection called Nouns, you become a member of the Nouns DAO; an online investment collective with a treasury of $62 million. As a group, noun owners can decide what to do with the money. A typical suggestion is, “What if we make NFT comic books?”.
As such, an independent organization called The Foundation handles the day-to-day management of the DAO, proposal management; and other tasks “to ensure that ideas have the support the DAO community needs to make them a reality.” In practice, it is legal to support the ApeCoin DAO.
A subcommittee of the Ape Foundation will also serve as the “board” of the ApeCoin DAO; which will oversee certain proposals.
The initial board is made up of five well-known cryptocurrency investors: Reddit co-founder Alexis Ohanian; Amy Wu, who leads the venture capital unit at cryptocurrency exchange FTX; Maaria Bajwa of Sound Ventures; Yat Siu from Animoca Brands; and Dean Steinbeck of Horizon Labs.
Each member receives a six-month term, and the ApeCoin website promises DAO members that they will vote for future members.
Somewhere in the middle is the Cartan Group a consulting firm in the Cayman Islands that pays $150,000 a month for a six-month contract. Published by the company’s co-founder, Brian Tang all five proposals.
ApeCoin protocol
In addition to the ApeCoin protocol (the code behind the ApeCoin token); there are ApeCoin DAO, Ape Foundation, and ApeCoin DAO boards.
However, the Bored Ape investor community does not develop the ApeCoin token. The moon in the center of this monkey is a black hole. Who actually made this?
So, the main company behind the Bored Ape Yacht Club series is Yuga Labs, a traditional corporate entity registered in Delaware, USA. One group is discussing an investment with capitalist Andreessen Hor that would make Yuga a $5 billion venture manager. Recall that it recently took steps to become the first major NFT monopoly.
So, Yuga Labs is also responsible for all major projects and acquisitions related to the Bored Ape Yacht Club family. If you want to do something with the intellectual property of the collection, you have to go through the company.
In a Yuga Labs communicator, Nicole Muniz sends new ideas to the community communicator, who sends new ideas to the product and energy builder.
She said the company has gifted a special one-time NFT to the ApeCoin DAO treasury and plans to “adopt ApeCoin as the primary currency for all new products and services,” which ties the asset’s value to the success of the Bored Ape collection as one all.
Yuga Labs insisted that it is not responsible for the ApeCoin token.
Another release released by the company called Strange Brew Strategies warns journalists that “it is probably trying to write that ApeCoin is from the Bored Ape Yacht Club to simplify things, but (this information) is not accurate.”
Distribution and free money
ApeCoin’s distribution model further complicates this issue.
Of the total ApeCoins, holders of tokens and the DAO treasury reserve 62%. In the first 90 days of ApeCoin’s existence, anyone who has any combination of NFTs from the Bored Ape Yacht Club and its two derivative collections – the Mutant Ape Yacht Club and the Bored Ape Kennel Club – can claim a certain amount of APE on the Ape’s website. ApeCoin.
As APE has a discrete value and is already trading on major exchanges, claiming these coins is a bit like claiming free money. For every Bored Ape you own, you are entitled to 10,094 APE. That’s about $100,000 at Monday’s quote — about a third of what you’d need to buy another Bored Ape.
Around 110 million APE tokens have been claimed
So far, around 110 million APE tokens have been claimed by NFT holders. And can view the data on a Dune Analytics dashboard.
For “early contributors” it reserves the other 38% of ApeCoin and also for the Jane Goodall Legacy Foundation, an organization that supports (real-life) jungle primate conservation efforts.
Yuga Labs is receiving 150 million APE, 10 million of which (“or equal amount”) will go to the Jane Goodall Legacy Foundation. Next, 140 million APEs go to “the companies and people who helped make this project a reality” – an as-yet-unnamed group that likely includes the Yuga Labs, team members.
Another 80 million APE will go to the founders of Yuga Labs. All these coins are “lock-in” for the first 12 months, so holders cannot simply withdraw and pocket the profits.
The concept of requesting NFT free tokens is not new. In September, the developers launched a cryptocurrency called Adventure Gold (AGLD). Link it to a fast-growing NFT collection called Loot.
Anyone with an NFT cashout is to automatically receive a certain amount of AGLD, and claiming these tokens means earning tens of thousands of dollars with no extra effort. In this sense, NFTs can act as a license to print money.
Once again, Yuga Labs claims zero liability for ApeCoin – the company is only taking a significant share of the profits.
Is it in accordance with the Laws?
Whether or not the initiative respects the laws depends on whether ApeCoin DAO is fully independent of Yuga Labs. So, if Yuga Labs issued a token explicitly as a reward to Bored Ape holders, it would be possible to say that a Bored Ape is a type of investment and therefore subject to securities regulations.
In the same way that certain stocks pay dividends, part of the value of NFTs would tie to the benefits they could bring you.
With ApeCoin coming from ApeCoin DAO and not Yuga Labs, there is an appearance of legality under US law. This is because an independent entity allocates tokens to a company and its founders rather than that company and its founders launching their own investments.
Of course, traditional companies are always doing this through initial public offerings (IPOs). Therefore, the difference is that the provision of ApeCoin is basically unregulated because the US Securities and Exchange Commission (SEC) has not yet overseen the NFT. At least for a while.
According to Rohan Gray
According to Rohan Gray, a law professor at Willamette University and an observer of cryptocurrency regulation, the difference between ApeCoin DAO and Yuga Labs may also be related to the so-called “Hinman test.”
The test, named after a former SEC employee currently working at Andreessen Horowitz; states that if a government agency it is free to issue tokens without registering for security. I am. ApeCoin DAO is decentralizing (at least nominally). Yuga Labs is not.
“It’s the crypto world’s next attempt to circumvent securities regulation,” he said. “First of all, it was the coin offerings. But in 2017, with the [SEC] ICO report, they (crypto community) couldn’t do that, so they switched to stable coins. So there was a crackdown on that, and then they turn to the NFTs.”
In Gray’s opinion, ApeCoin amounts to an attempt by the cryptocurrency industry “to almost restart the 2017 debate (around ICOs, an acronym for initial coin offering).
OK, but what can you do with ApeCoin
Today, ApeCoin exists primarily for DAO speculation and “governance.” However, Yuga Labs has great ambitions for tokens.
For example, a mobile game called Benji Bananas developed by Animoca Brands (co-founder Yat Siu is a board member of the Ape Foundation) uses ApeCoin as the in-game currency. At 25 ApeCoins, you can purchase a “Benji Bananas Membership Pass” to earn “Special Tokens.” And can exchange these cryptocurrencies for ApeCoins.
This is probably just the beginning of a whole ecosystem powered by ApeCoin: Yuga Labs plans to use APE as its currency for all new projects. This is also part of the legal element – the more things the token can do beyond speculation, the better its chance of escaping the SEC.
If the price holds and traders outside the Bored Ape Yacht Club ecosystem start taking positions in APE, the use cases are bound to proliferate.
The post What Is ApeCoin and Who Is Behind This Cryptocurrency? appeared first on Visualmodo.
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