What Is ApeCoin
Earlier this week, it was announced members of the Bored Ape Yacht Club NFT collection would be getting their very own cryptocurrency, ApeCoin.
The passive voice there is intentional. ApeCoin is explicitly linked to these famously pricey non-fungible tokens, and is very much involved with Yuga Labs, the company stewarding the intellectual property behind the Bored Apes. But a carefully coordinated marketing campaign has taken great pains to dissociate ApeCoin from any one conventional corporation.
Instead, the public relations messaging insists ApeCoin is a product of ApeCoin DAO, a brand new organizational unit governed entirely by token holders. Holding APE makes you a member of the DAO (that’s short for decentralized autonomous organization, a kind of online collective centered around crypto); you don’t even need to own a Bored Ape NFT to join.
What is ApeCoin?
ApeCoin is an ERC-20 token, a particular flavor of build-it-yourself cryptocurrency on the Ethereum blockchain. Most of the Ethereum-based social tokens that have taken off over the past year (think FWB, for the social club Friends with Benefits, and WRITE, for the Web 3 crowdfunding platform Mirror) are built using this framework.
Unlike NFTs, they’re meant to be “fungible” – as with bitcoin (BTC), any one ApeCoin should be worth exactly as much as any other ApeCoin, and you can buy and sell them freely on what is known as a decentralized exchange, a kind of digital trading post for cryptocurrencies.
Almost every major centralized crypto exchange listed the token immediately after launch. This was an accomplishment in and of itself, given the notoriously finicky nature of major players like Coinbase (COIN). After just one day of trading, ApeCoin had a market capitalization of almost $2 billion; one APE is currently worth about $14 and the total supply of tokens is capped at one billion (not all of which is currently in circulation).
Who is behind ApeCoin?
According to the ApeCoin website and accompanying press materials, ApeCoin is being launched by ApeCoin DAO, a new governing body in which all APE holders are members. It’s meant to field proposals from the community, which token holders can then vote on.
Other NFT projects have attempted similar voting structures. Purchasing an NFT from a collection called “Nouns” makes you a member of Nouns DAO, an online investment collective that has amassed a treasury of $62 million. On a dedicated page for proposals, Nouns owners can decide as a group what they’d like to do with that money. (A typical proposal: “What if we made an NFT comic book?”)
There’s also a separate organization called the Ape Foundation, which will handle day-to-day DAO administration, proposal management and “other tasks that ensure the DAO community’s ideas have the support they need to become a reality.” It’s the legal backing for ApeCoin DAO.
An Ape Foundation subcommittee will also serve as ApeCoin DAO’s “board,” which will oversee certain proposals. The initial board consists of five high-profile crypto investors: Reddit co-founder Alexis Ohanian; Amy Wu, who leads the crypto exchange FTX’s venture arm; Maaria Bajwa, of Sound Ventures; Animoca Brands’ Yat Siu; and Dean Steinbeck of Horizen Labs. Each board member gets a six-month term, and the ApeCoin website promises DAO members will be able to vote on future members.
Floating somewhere in the middle of all this is a Cayman Islands-based consulting company called Cartan Group, which is being paid $150,000 per month for a six-month contract; all five of the DAO’s active AIPs, or “Ape Improvement Proposals,” were posted by Brian Tang, the company’s co-founder.
So, in addition to the ApeCoin protocol (the code behind ApeCoin tokens), there’s the ApeCoin DAO, the Ape Foundation and the ApeCoin DAO board. But ApeCoin wasn’t developed by the community of Bored Ape investors. There’s a black hole at the center of this ape galaxy. Who actually put this thing together?
The main company behind the Bored Ape Yacht Club is Yuga Labs, a traditional corporate entity registered in Delaware. It’s reportedly in talks with the venture capital firm Andreessen Horowitz about funding that would value it at $5 billion, and it has recently made moves to become, effectively, the first major NFT monopoly.
Yuga Labs is also responsible for all the major projects and acquisitions surrounding the Bored Ape Yacht Club. If you want to do anything with Bored Ape IP, you’ll have to go through Yuga Labs.
In a statement, Yuga Labs CEO Nicole Muniz said that “Yuga Labs will continue to be builders of products and experiences that bring new ideas and energy to the community.” Yuga Labs has gifted a special one-of-one NFT to the ApeCoin DAO treasury, and plans to “adopt ApeCoin as the primary token for all new products and services,” which ties its value to the health of the Bored Ape collection as a whole.
Even still, Yuga Labs has insisted it’s not responsible for ApeCoin.
A press release, courtesy of a company called Strange Brew Strategies, warns journalists that “it’s probably tempting to write that ApeCoin is from the Bored Ape Yacht Club to simplify things, but it’s not accurate.”
The “free money” token claim concept for NFTs isn’t a new one. Back in September, a developer launched a cryptocurrency called “Adventure Gold” (AGLD) as a companion to an ascendant NFT collection called Loot. Anyone with a Loot NFT was automatically entitled to a certain amount of AGLD, and claiming those tokens meant coming into tens of thousands of dollars without any extra effort. In this sense, an NFT can function as a license to print money.
Again, Yuga Labs claims zero responsibility for ApeCoin – it’s just taking a significant chunk of the profits.