Every day I log on to the internet simply desiring to post something about finally buying the "good crackers" at the store or somesuch, but then I see what everyone is talking about and our unwholesome reality crashes in on me. Today, that catalyst is ApeCoin.
ApeCoin is a new cryptocurrency spawned by Yuga Labs, the company that brought us Bored Ape Yacht Club NFTs, its spinoff Mutant Apes, and, admittedly indirectly, a fairly cursed exchange between Paris Hilton and Jimmy Fallon on late night TV. The coin is technically arms-length from Yuga Labs—it will be managed by the ApeCoin DAO—and will be integrated into play-to-earn games developed by the Ubisoft-backed Animoca Brands.
The blue-chip NFT project and industry standard-bearer launching its own coin is a big deal, but so far it's mainly succeeded in making a lot of people mad. The coin's launch on Thursday saw 15 percent of the total supply given away for free to current NFT holders, with everyone else being able to buy it on exchanges. The result was predictable: a sell-off that tanked the value of ApeCoin immediately after launching.
The value of ApeCoin immediately spiked to nearly $40 USD on Coinbase, according to data from the exchange, before dropping to around $8. The price action on decentralized exchanges like Uniswap was more measured, according to Dextools.io, although they are still seeing downward pressure.
This was not unexpected: If one group of people are given something for free that others can only buy on the market, it stands to reason that a chunk will simply sell their freebies for a profit. But some observers still decried the launch as a "rug pull," which is a crypto industry term that can describe insiders taking profit by dumping on retail buyers and tanking the currency, typically disappearing and leaving it for dead.
When reached for comment, Yuga Labs itself didn't seem very surprised by the volatility either, framing it as a natural process.
"ApeCoin is a protocol layer for gaming and entertainment for the APE Ecosystem and across the web3 world. Of course it makes sense to airdrop tokens to said community. This was to ensure that ApeCoin is a community controlled token. As a result the market went through a very normal period of price discovery; which can be highly volatile when liquidity in pools and on exchange order-books is limited because the token had just launched," the emailed statement said.
Besides the price action, crypto investors have criticized ApeCoin for its distribution structure which heavily favors both project insiders and existing NFT holders. 22 percent of all tokens are earmarked at the outset for individual BAYC founders and "the companies and people that helped make this project a reality." Another 16 percent are for Yuga Labs (a portion will be given to charity), and 15 percent for NFT holders. The remainder are earmarked for the DAO treasury and "resources." While all of the tokens are already minted, they're subject to timed lockups where they cannot be moved (and thus sold) for a period of time.
Like any buzzy crypto launch, ApeCoin was beset by scammers trying to cash in on the hype. Multiple ApeCoins launched on Thursday on the Binance Smart Chain, one of which reached a price of $3—the real ApeCoin is an Ethereum-based token. ApeCoin saw this coming, because this is just how things are in the cryptocurrency markets.
"BEWARE: Scammers are out in full force," the ApeCoin Twitter account wrote in a tweet on Wednesday. "Apecoin.com is the only official website. Always be extremely suspicious when connecting your wallet to a website, and NEVER type your seedphrase."
ApeCoin isn't just a buy-and-hold crypto, though, and aims to integrate into the burgeoning play-to-earn gaming space, where people earn and trade crypto or NFTs inside video games. Already, ApeCoin is integrated into Benji Bananas, a mobile game by Animoca Brands. ApeCoin will also be integrated into an upcoming game developed by nWay, a company that has been around since 2011 but which Animoca acquired in 2019.
nWay's 2019 fighting game Power Rangers: Battle for the Grid has managed to gain a niche cult following, and the company's announcement that it would integrate ApeCoin into an upcoming title was not received well on Twitter. "This is truly sad. I love how they built one of my favorite fighting games just to throw it all away with this. Really hope they retract all of this," is one representative response to the announcement, which has 8 retweets but nearly 250 quote-tweets, AKA a ratio.
ApeCoin's wild ride is just beginning, but it's a bumpy start.