The craze from the famous NFT Bored Ape Yacht Club is something worth talking about.
As the crypto community has noticed over the past few weeks, a new ERC-20 utility token called ApeCoin has been released and saw amounts of controversial and impressive traffic. From launching 9 days ago at $1 and already seeing highs of $40 while leveling out to the new average of $13, there is a lot to be said about this potential token that has a lot of individuals skeptical and others excited for the new adaption that will be brought into Web 3.
What is ApeCoin?
As mentioned, ApeCoin is a new token off the ERC-20 (Ethereum Blockchain) that has a large following due to the NFT ground Bored Ape Yacht Club created by Yuga Labs. This token will serve a purpose for the members of the BAYC community and allow them to participate in the future Web 3 programing that Yuga Labs is placing into effect over the next few years. Some of the things that members will be able to utilize that the board of Yuga has mentioned are the probability of a marketplace, online gaming, and event programming. Unfortunately, to see the ApeCoin DAO roadmap, you do have to be a member of the BAYC community as they currently have it posted on the internal site that is linked with crypto wallets holding one of the highly sought-after BAYCs NFTs.
What Are Investors Thinking?
As far as the crypto community goes, there is a lot of backlash from this new token. The initial launch of this token resulted in more than 81% of the available tokens being airdropped to BAYC members leaving 29% to be utilized in other avenues for outside investors to purchase. From the crypto community, this initially looked as if it were aligned with what is called a rug pull (taking a hyper-inflated coin that is majority-owned by its creators and selling all at once to drop the price to $0 AKA a pump and dump).
This was due to the large majority of tokens being held by members and at the time, the total circulation supply was set at 1 billion. Due to this, there was a massive spike in interest for this token resulting in a high of $40 versus its initial offering at $1. Due to this, there has been a massive amount of communication from the Board at Yuga to discuss all plans for this token as it is insights of the SEC. This in itself also causes apprehension when it comes to the vision of investors to decide if it is a short-term flip or a long-term hold. The current positive of this token, however, is the strong community following BAYC and the things that Yuga has already set in place from the proceeds of their NFT causing a lot of individuals from the NFT community to buy into the token in the Crypto space.
Strengths of the Token:
The first and foremost strength that needs to be mentioned with this is the DAO that is being created for ApeCoin. 47% of all circulating supply with being held inside of a treasury to allow for investing opportunity through their DAO resulting in an APR % that has not been decided yet. The best way to look at this is to view TIME DAO which has granted many holders APR’s reaching 80,000% over 2021. This along with the current community support of BAYC holders will result in a large APR for the future of this program which in return shows large signs of a long-term hold in the crypto space (6-month to a year is a long-term hold).
It is still in discussion for who can maneuver the DAO project as at this time it is for BAYC holders and individuals that do not hold an ape can only purchase the token, there is still a lot of room for profit. As mentioned, TIME is one of the biggest DAO tokens to follow in regards to this. At their launch, $1 would be able to purchase 1 token and at the time of this article, TIME is priced at $132 with a 1 year high of $14,185.38 due to the large APR that was achieved at the beginning of 2021. While the supply of TIME is drastically smaller than the 1 billion of ApeCoin, there is still something to be had based on the demand for this coin once APRs are launched and holders see the potential earnings they can make with this token. This is where there is a massive ability to create long-term earnings with this token as it is currently showing signs of undervaluing especially if it generates an APR in the thousand percent.
As far as community, Yuga Labs is notorious for their large donations to 501C3 projects and ApeCoin is also in the mix with a large donation of 1% of their ApeCoin supply to Jane Goodall Legacy Foundation which will benefit real apes ($10,000,000 at the time of launch). While in the eyes of an investor, this might be of no value but in the eyes of Yuga building their supporting community, this is what keeps them growing as far as a following.
Weaknesses of the Token:
Since Yuga Labs is known for the creation of NFT projects that are successful there is still a major disconnect from the crypto market. This alone will lead many to believe that Yuga might not be able to create a successful DAO. If ApeCoin follows suit to that of TIME then it will end up crashing as granting an APR as high as some have speculated.
The other weakness behind this token is the large supply that is currently out there and that more than 60% in total is controlled by a very select few. This will always cause speculation from an investor outside of the community as non BAYC holders will not see the internal conversations with the select group.
Of course, there will always be speculation behind ApeCoin but there is a lot to be said about their crazy success in the NFT space but there is still a lot to learn before they are breaking the ground of the crypto space.
Is ApeCoin Worth Buying?
This token is one to consider heavily if you have to funds to set them aside for a potential loss. When investing in alt-tokens you need to realize that they are the most volatile than the big three but with that, alt-coins are the ones that result in some of the highest percent growth that all of the crypto community has watched over 2020-2021. All in all, ApeCoin is a buy as there is large support behind the token, and the utility that it offers benefits the community of BAYC which, as we have watched over the past three years, keeps growing stronger and becoming bigger.