This digital asset aims to help build a decentralized web3 ecosystem and offers various benefits to its holders.
In this article, we will discuss the creation, functionality, and purpose of ApeCoin, making it easy for crypto enthusiasts to grasp its fundamentals.
What is ApeCoin (APE)?
ApeCoin is an ERC-20 token built on the Ethereum blockchain.
It was initially distributed through an airdrop to holders of Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club (MAYC) NFTs.
At the time of launch, this airdrop was worth over $100,000 per BAYC NFT holder. ApeCoin aims to enable various web3 initiatives such as video games and virtual reality worlds.
By holding APE tokens, users become part of the ApeDAO (decentralized autonomous organization), which allows them to make decisions about system improvements and manage the community associated with the token.
The Creation of ApeCoin
Yuga Labs, led by CEO Nicole Muniz, released three NFT collections in 2021: BAYC, MAYC, and Bored Ape Kennel Club (BAKC), generating a combined revenue of $127 million.
The idea for ApeCoin emerged from a proposal called ApeCoin Improvement Proposal-1 (AIP-1), which led to the creation of the ApeDAO and set the path for APE’s development.
In Spring 2022, ApeDAO launched the APE token and allocated it to NFT holders, the ApeDAO treasury, Yuga Labs, Cartan Group, and individuals involved with the APE Foundation and its board.
Notable board members include Alexis Ohanian (co-founder of Reddit) and Yat Siu of Animoca Brands. The board executes decisions made by ApeDAO, supervised by APE token holders.
While Yuga Labs has no control over ApeCoin, the founders were rewarded with a significant portion of APE tokens, and their company is acknowledged as a contributor to the project.
Initially, ApeCoin was distributed to BAYC and MAYC NFT holders.
Bored Ape holders received 10,094 APE tokens, while Mutant Ape holders received 2,042 APE tokens.
ERC-20 tokens like APE are interchangeable, allowing them to be used in different ways, such as a governance token or a currency in projects that integrate it.
The developers of ApeCoin have outlined four primary goals for the token:
- Involvement: APE holders can influence the direction of ApeDAO and any future projects.
- Spendability: APE can be used as a digital currency on the Ethereum blockchain.
- Privileges: Owning APE grants access to exclusive events and airdrops.
- Motivations: Developers of blockchain projects, such as games or metaverses, can incorporate APE into their projects and join the Bored Ape community.
The Use of the APE Token
ApeCoin’s most famous initial use case was the launch of the Non-Fungible Token (NFT) from Otherside Land. This digital asset is intended to be integrated into various web3 and metaverse projects.
Yuga Labs introduced their BAYC-linked virtual world, Otherside, offering 55,000 parcels of virtual real estate in the form of NFTs called “Otherdeeds.” This sale generated a staggering $300 million, with all transactions conducted using ApeCoin.
ApeCoin’s utility is not limited to Yuga Labs’ projects.
For example, Benji Bananas, a Play-to-Earn (P2E) game by Animoca Brands, allows players to earn ApeCoin as rewards.
The creators of ApeCoin envision that the token’s adoption will continue to grow in the future, expanding its use cases in the web3 and metaverse spaces.
ApeCoin’s total supply is capped at 1 billion tokens, which is permanently secured by an Ethereum-based smart contract. This contract ensures that there will be no minting or burning of tokens, maintaining a fixed supply.
Upon launch, 15% of the total APE tokens were immediately distributed to BAYC and MAYC NFT holders.
The remaining tokens were allocated as follows: 47% to the DAO treasury, 15% to Yuga Labs, 14% to investors and contributors, 8% to the four founders of Yuga Labs and BAYC, and 1% to the Jane Goodall Legacy Foundation for funding conservation, educational projects, and environmental research initiatives.
Initially, 30% of all APE tokens were made accessible, with the remaining tokens gradually becoming available over the following 48 months, ending in 2026.
ApeCoin: A Recap
- ApeCoin (APE) is an ERC-20 token built on the Ethereum blockchain, designed to serve as both a network governance tool and a utility token for various web3 projects.
- The development of ApeCoin involved collaboration between Yuga Labs (creator of BAYC), Cartan Group, and the ApeCoin Foundation. The token’s usage is overseen by APE holders through the ApeDAO.
- ApeCoin’s initial primary application was for purchasing virtual land called “Otherdeeds” in the BAYC-associated metaverse, Otherside. However, APE is increasingly being accepted in other web3 applications and as an in-game currency.
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