Earlier this week, it was announced that the collection member of Bored Ape Yacht Club will receive their own cryptocurrency, .

have clear links with the this expensive celebrity and has a lot to do with Yuga Labs, the intellectual property management company behind Bored Apes. But the marketing campaign is separating from any regular company.

Instead, the development team asserted that ApeCoin is a product of ApeCoin , a brand new organizational unit managed by token holders. Holding APE makes you a member of and don't even need to own NFT Bored Ape to participate.

The official ApeCoin website states that the token is a “decentralized protocol layer for community-led initiatives that fosters the ability to go deep into ".

What is ApeCoin?

ApeCoin is a token -20 build on . Most social tokens are based on was successfully built over the past year using this framework.

Unlike NFTs, they mean “replaceable”, the same as (), ApeCoins will all have the same value, users can buy and sell them freely on decentralized exchanges, trading platforms of all kinds. .

Almost every major centralized exchange lists the token right after it launches. After just one trading day, ApeCoin has a market capitalization of nearly 2 billion USD; with an APE currently worth around $ 11.5 and total token supply capped at one billion (not all of which are in circulation).

Source: TradingView

Who is behind ApeCoin?

According to the ApeCoin website and accompanying documents, ApeCoin is being implemented by the ApeCoin DAO, the governing body of which all APE holders are members. It means that token holders can participate in voting on new proposals.

The projects NFT another tried the same voting structure. Buying NFTs from a collection called “Nouns” will help users become members of the Nouns DAO, the online investment collective that has amassed a treasury worth $62 million. On a page dedicated to recommendations, Nouns owners can decide what they want to do with the money.

There is also a separate organization supporting the ApeCoin DAO called the Ape Foundation. The organization will handle day-to-day DAO administration, proposal management, and “other tasks that ensure ideas from the DAO community get the support they need to become a reality.”

The Ape Foundation will also act as the “governing board” of the ApeCoin DAO, overseeing certain proposals. The original board of directors consisted of five investors famous: Alexis Ohanian – co-founder ; Amy Wu – head of venture branch of cryptocurrency exchange ; Maaria Bajwa of Sound Ventures; Yat Siu by Animoca Brands; and Dean Steinbeck of Horizen Labs. Each board member has a six-month term, and the ApeCoin website promises DAO members will be able to vote to choose a future board.

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A consulting firm based in the Cayman Islands, called Cartan Group, is being paid $ 150,000/month for a six-month contract; all five active DAO AIPs, aka “Ape Improvement Proposals”, posted by Brian Tang – co-founder of the company.

So, in addition to the ApeCoin protocol (the code behind the ApeCoin token), there is also the ApeCoin DAO, the Ape Foundation, and the ApeCoin DAO board.

But ApeCoin is not developed by Bored Ape investor community. So who is really behind the staging of it all?

The main company behind Bored Ape Yacht Club is Yuga Labs, the traditional corporate entity registered in Delaware. It is reported that they are in talks with venture capital firm Andreessen Horowitz about an investment, which will value the project at $5 billion. Recently, ApeCoin has made moves to effectively become the first NFT monopoly.

Yuga Labs is also responsible for all major projects and acquisitions of Bored Ape Yacht Club. If users want to do anything with Bored Ape IP, they will have to go through Yuga Labs.

In a statement, Yuga Labs CEO Nicole Muniz said, Yuga Labs will continue to be a builder of products and experiences, bringing new ideas and energy to the community. Yuga Labs has donated a one-of-a-kind special NFT to the ApeCoin DAO treasury and plans to use ApeCoin as the primary token for all new products and services, which ties its value to the state of the suite. Bored Ape collection.

Yuga Labs insists they are not responsible for ApeCoin

The press release, courtesy of a company called Strange Brew Strategies, warns that “it might be tempting to write that ApeCoin comes from the Bored Ape Yacht Club to simplify things, but that is not exactly".

ApeCoin

Distribution of tokens and “free coins”

The ApeCoin distribution model further complicates the question of who is behind this project.

62% total ApeCoin is being reserved for DAO token and treasury holders. During the first 90 days of ApeCoin's existence, anyone holding a combined number of NFTs from the Bored Ape Yacht Club and its two sub-collections, the Mutant Ape Yacht Club and the Bored Ape Kennel Club, could claim an amount. Certain APE from ApeCoin Website.

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Because APE has a unique value and is already traded on major exchanges, it is considered a free token giveaway event. For each Bored Ape a user owns, they are entitled to 10,094 APE, about $ 150,000 at current prices, about half the amount it takes to buy themselves another Bored Ape.

To date, approximately 110 million APEs have been claimed by NFT holders.

The remaining 38% ApeCoins are reserved for the “original contributors” and also the Jane Goodall Legacy Foundation, which supports real-life primate conservation efforts.

Yuga Labs is receiving 150 million APE, 10 million of which (“or equivalent”) will go to the Jane Goodall Legacy Foundation. Next, 140 million APE went to “the companies and people who helped make this project a reality”. This is a group that most likely includes members of Yuga Labs. And 80 million APE belongs to the founders of Yuga Labs. All these tokens are “locked in” for the first 12 months, so holders cannot withdraw and dump the market.

The concept of “free money” for NFTs is not new. In September 2021, a developer launched a cryptocurrency called “Adventure Gold” (AGLD) as a companion to the NFT Loot collection. Anyone with a Loot is automatically entitled to a certain amount of AGLD, giving owners tens of thousands of dollars more for free. In this sense, the NFT can act as a kind of license to “print money”.

Again, Yuga Labs declares not to be responsible for ApeCoin, it only receives part of the profits from the project.

Is this legal?

Everything now revolves around the idea that ApeCoin DAO is completely independent of Yuga Labs. If Yuga Labs were to issue tokens as a reward for Bored Ape holders, it could be easily argued that Bored Ape is a type of investment and therefore subject to securities regulations. In the way that certain stocks pay dividends, a portion of the NFT's value will be tied to perks that can make investors profitable in the future.

ApeCoin is ostensibly coming from ApeCoin DAO and not from Yuga Labs, and is an independent entity allocating tokens to the company and its founders, instead of that company and its founders having to pump themselves. their investments.

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Traditional companies, of course, always do this through initial public offerings. The difference is that the ApeCoin supply is essentially unregulated, as in the United States, at least for now, the Securities and Exchange Commission does not oversee the NFT.

According to Rohan Gray, a law professor at Willamette University and a cryptocurrency regulatory observer, the difference between the ApeCoin DAO and Yuga Labs probably also has something to do with something called the Hinman Test. It is named after the former official , William Hinman, currently working at Andreessen Horowitz.

Hinman's idea is that if a regulator is "decentralized enough," then it can freely issue tokens without having to register as securities. The ApeCoin DAO is (at least nominally) decentralized; while Yuga Labs does not.

“This is the next test of the crypto world’s attempt to bypass securities regulations. Coins first, then ICO in 2017 and . Now, the market has moved to NFT.”

In Gray's view, ApeCoin equates to a crypto industry effort similar to what took place in 2017.

What can investors do with ApeCoin?

Currently, ApeCoin mainly exists for speculation and “administration” for the DAO. But Yuga Labs has bigger ambitions for this token.

A mobile game called Benji Bananas, developed by Animoca Brands (whose CEO, Yat Siu, sits on the board of directors of the Ape Foundation), is using ApeCoin as an in-game currency. With 25 ApeCoins, users can purchase a Benji Bananas Membership Card, which allows them to earn “special tokens” in the game. The tokens can then be swapped into ApeCoin.

Perhaps, this is just the beginning of the entire ecosystem powered by ApeCoin. Yuga Labs plans to use APE as the de facto currency for all new projects. It's also part of the legal element, the more an investor can do with the token, the better chance they have of evading. .

If prices hold and traders outside the Bored Ape Yacht Club ecosystem start taking positions in APE, more and more APE use cases will be developed in the future.

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