What is ApeCoin? APECOIN (APE) Explained

ApeCoin (APE) is a utility token on the Ethereum blockchain network. Its beginnings lay with the non-fungible token (NFT) brand Bored Ape Yacht Club (BAYC), which played a significant role in popularising the collectible NFT art markets in 2021.

BAYC suggested the creation of APE as a new cryptocurrency to represent what it said was a modern culture of expressing one’s self through art, gaming and entertainment, specifically using the web3 platform – which blockchain is seen to be a part of. APE was launched in April 2021 by Yuga Labs, the owners of BAYC. It was first given out for free or airdropped to current owners of a “Bored Ape” NFT, the term given to the collection of BAYC NFTs.

Because of its origins and connections to the metaverse, art, and social networking, APE claims to support a broad vision of cultural evolution over crypto and blockchain in a system that is governed by its community, deciding its future, control and development.

What is the APE ecosystem?

The APE ecosystem can be looked at in 3 key components:

• The APE Protocol, which is the open source layer that is what most users will interact directly with. This can be seen as represented by the ApeCoin (APE) token itself as a cryptocurrency or governance token.
• The APE Foundation, which is the base layer for ApeCoin holders to build their ideas on. It can be seen as an administrator or organiser for development.
• The ApeCoin DAO, which is the 

1. The APE Protocol

In technical terms, APE coin serves as a decentralized layer to realise initiatives brought forward from its own community as a form of self-governing Decentralised Autonomous Organisation or DAO. This meant that APE coin owners would be able to participate in this DAO using their APE tokens to vote.

In practical terms, APE is simply the native cryptocurrency of BAYC, allowing its community members to transact directly with each other without intermediaries, while giving exclusive access to events, games, services and even merchandise.

2. The APE Foundation

According to its official website, the APE Foundation acts as the steward of ApeCoin, that is, a caretaker of the project, until such a point where it is able to govern itself via the ApeCoin DAO.

The Foundation is actually made up of several individuals who helped to kick off the project and their duty is to perform administration of the DAO decisions and the daily tasks of accounting, project management and community growth. The idea is to smoothen out the initial journey while the DAO community takes shape and has enough of a base to self-govern.

The foundation is also in charge of the Ecosystem Fund, which multi-sig wallet holding APE, which will be used to fund expenses as determined by the DAO members.

A special council was initially formed on the APE Foundation and named the Board. They currently meet to decide on proposals and pass administrative reviews before enacting them. Currently, the Board serves a six-month term before a voting process is held annually to select new Board members.

As of May 2022, these are the current Board members:

• Alexis Ohanian –  co-founder of Reddit
• Amy Wu – head of ventures and gaming at FTX
• Maaria Bajwa – principal at Sound Ventures
• Yat Siu – co-founder and chairman of Animoca Brands
• Dean Steinbeck – president and general counsel at Horizen Labs

3. The ApeCoin DAO

The ApeCoin DAO hopes to be the decentralised governance mechanism that will build and manage APE’s community all over the world. It is meant to be a fair and objective system to manage the decision-making processes of the collective DAO.

Whether this is about how to use the Ecosystem Fund allocations, amending or adding to the rules of governance, building new projects, taking on new partnerships, or any other type of decision or action that would affect the ecosystem.

Membership is simply determined by being an ApeCoin holder. Though it is unclear as to how the structure will look like, power distribution DAO is usually directly correlated to the number of ApeCoin a member holds. The more tokens they own, the higher their voting power in a DAO.

What is ApeCoin used for?

At the moment, there isn’t much you can do with APE directly except to trade it on several crypto exchanges. Despite plans for APE to be used as the primary token for all new services and products launched by Yuga Labs, many of these projects remain very much in development. The eventual core utility will be for third-party developers to create new apps in the APE ecosystem, integrating APE as a crypto and incentive for new services and products. 

Yuga Labs has indicated that its current focus will be to use APE in the popular play to earn (P2E) model type games that it will help develop in partnership with Animoca Brands, a developer of mobile P2E games.

In mid-May 2022, the first such game to use APE was introduced as Benji Bananas. APE is used to buy a game pass (in the form of a ‘Benji Pass’ NFT). In-game tokens earned in Benji Bananas (called PRIMATE) can also be swapped for APE.

In terms of the APE DAO, as the governance token meant to decide the future direction of the APE ecosystem, token holders should be able to use their ApeCoin to vote on proposals accepted by the community.

This has yet to take place, however, with the only significant development happening in March 2022 when Yuga Labs gifted the ApeCoin DAO a “collectively owned IP” NFT which will be dealt with once the community takes a decision. It is unclear how this will happen.

Is APE a good investment?

Despite a steep drop in value after the Terra-induced crypto crash in May 2022, APE was still the 32nd highest ranked crypto in terms of market capitalisation in the same month.

With an all-time high price of $39.40 in April 2022, however, APE fell more than 80% in less than a month, faring much worse in the current bearish market than more established crypto like Bitcoin and Ethereum.

Market conditions aside, there are several considerations to make when deciding if APE is a suitable investment.

1. BAYC as the most recognisable NFT collectible brand

The NFT art scene’s original projects like CryptoPunks and CryptoKitties are considered the benchmarks of successful NFT brands. However, BAYC has dislodged them from the top spots held for many years, at least, in terms of market capitalisation.

This mainly owes to the fact that in 2021, there was huge celebrity interest in Bored Apes, with mega-wealthy personalities such as Paris Hilton, Eminem and even investment gurus like Adam Draper and Mark Cuban. All of these celebrities bought their very own Bored Ape for millions of dollars, many of them using their own Bored Ape avatar on Twitter – creating immense visibility for the project.

While the hype has certainly lost some of its lustre in the current state of crypto (and the global economy overall), there is still interest, with Bored Apes still changing hands daily, albeit at comparatively more modest prices.

If one were to tie APE’s value to BAYC’s success, then APE would seem like a long-term buy dependent on BAYC continuing to fetch premium prices in the coming years.

On the other hand, were BAYC to be displaced by more successful brands, APE holders should expect a corresponding loss of value in the crypto.

2. APE creators as the mega owners of NFT IP rights

Yuga Labs, who created BAYC and launched APE, spent most of the past year buying up the intellectual property (IP) rights of other NFT rivals. They now own almost all of the top NFT brand IPs: CryptoPunks, Meebits, Bored Ape Yacht Club, Mutant Ape Yacht Club, Bored Ape Kennel Club and Bored Ape Chemistry Club. Together, these account for over 40% of the entire NFT market on Ethereum.

Such dominance can work both ways for the investor. APE can continue to grow as it gains a market monopoly, or it can fall apart if its other projects fail.

3. Is APE just another memecoin?

Many serious crypto investors would criticise ApeCoin as another run-of-the-mill crypto with no true utility to support sustainable value. As pointed out in previous sections, there really isn’t much you can use APE for at the moment, other than to access a mobile game to earn even more crypto.

In fact, because of its Bored Ape legacy, it could be argued that APE is simply another memecoin – a digital asset inspired by and representative of the internet meme culture.

This isn’t to say that memecoins can’t flourish – take Dogecoin as an example – but you should always be aware of what you’re getting into when investing in new tokens like APE that ride high on hype.

How many ApeCoin are there?

There is a maximum total supply of 1 billion APE (1,000,000,000 APE). At the time of writing (May 2022), roughly 29% of this is supply is in circulation, trading for $7.46 for a market capitalisation of $2.18 billion.

The technical details for ApeCoin can be looked up on the Ethereum block explorer at this contract address: 0x4d224452801aced8b2f0aebe155379bb5d594381