What’s up with all the hype around Ape Coin? Is yet another meme coin being born or is it something different this time?
These questions were buzzing around my head too so I decided to take a deeper look.
After reading 16 articles, watching 3 hours of videos, and listening to more than 5 hours of podcasts I have condensed all the knowledge about the Ape Coin crypto token into 10 sections.
Read on to ace any Ape Coin related questions in your next Telegram or Discord chat.
1/10. Ape Coin’s birth through NFT Mania
If that heading reminded you of “Tulip Mania” then you are thinking along the same lines as I am.
By now almost everyone has heard of NFTs: Non-Fungible Tokens. If you have had the slightest interaction with crypto it should conjure up images of CryptoKitties, CryptoPunks, and the Bored Ape Yacht Club.



What does Non-Fungible even mean?
Non-Fungible is an annoying word as it is not intuitive to everyone. Basically, it means there is nothing that is notionally equivalent. For example, my dollar is equivalent to your dollar, your ounce of gold is equivalent to any other ounce of gold and my (unopened) coco-pops cereal is equivalent to any other coco-pops cereal packet on the supermarket shelf.
People wouldn’t mind swapping fungible things because they represent the same thing and hold the same utility and value. It won’t matter to me which specific dollar I use to buy stuff. And when I pick up a packet of cereal off the shelf it again doesn’t matter which one, provided that the box is not battered.
Things that are Non-fungible are unique. For example, Picasso’s paintings are non-fungible. Similarly, real estate, diamonds, and collector stamps or baseball cards are all non-fungible.
I am going to tell you how all this is related to Ape Coin and how it works soon. But first.
How crypto helped digitize ownership of art
With the advent of crypto, we were able to represent coins digitally. Bitcoin was the first and many followed.
I say digitize but it’s not exactly what I mean. Anyone was able to digitize money. All I needed to do was send you an email saying “Here, I am sending you some digital money. I am calling it MadToken.”
The problem was that there was no substance to that because you knew I could equally send the same email to many others. This is known as the double spending problem. Bitcoin solved the double spend problem through cryptography and the rest is history.
But if you step back and think that Bitcoin kicked off in 2009, it took quite a long time for us to move from digitizing fungible stuff like coins to digitizing non-fungible stuff.
And this is where it gets weird. Because in people’s minds art on the internet was fungible. You could easily right-click and “save as” on any image on the internet that you liked. You could place it as your profile picture, upload it to your blog or print it out and hang it on your wall. Now, suddenly, tokenizing that picture meant that it acquired a unique id proving ownership. This meant that it can be owned by a single person. And while it can be copied by anyone, ownership is unique.
If you still can’t get your head around them there is a great article explaining NFTs by the Verge.
Back to what all this has to do with Ape Coin.
2/10. Crypto Punks vs. the Bored Ape Yacht Club
In 2021 NFTs became all the rage.
I first became aware of NFTs with the introduction of CryptoKitties. These were part of a game where you could buy a digital kitty and mate it with another kitty to breed a new one.
In 2019, the crypto world was introduced to a new form of art called generative art. Generative art is art that uses programming to automate a whole or part of the process. The most talked about generative art was Autoglyphs. As you can see they are kind of boring but they were new and that is all that mattered.

The studio that introduced Autoglyphs to the world was Larva Labs. It is a team of two, now-famous, people: John Watkinson and Matt Hall. Their next iteration in generative art was to send giant reverberations across the crypto space and change the landscape as we knew it.
CryptoPunks enter the scene
Larva Labs created these pixelated crypto punk characters that conceptually alluded to the cypherpunks who started crypto. The characters’ pixelation matched the design ethos of the raw user experiences of DeFi dapps that were sprouting everywhere. A revolution was being born and people did not have time to make things look pretty.

CryptoPunks originally emerged as art meant to be used for profile pictures. As such, the value of the art is inextricably linked with the emergence of the crypto community that used them. The art meshed well with the values of the anarcho-crypto-punk rebel programmers who were going to disrupt the world. Without the community and that narrative, the pictures would likely have not held any value on their own.
Crypto punks are the most valuable NFT collections and many of the original holders saw value in both the art and the narrative. The aesthetic of the punks has this counter-cultural vibe that resonated with the early adopters of crypto.
All in all, there are about 10,000 punks that are grouped into different categories. You have humans, zombies, apes, and aliens. Over time some traits such as hoodies have become more popular.
Other NFT collections also followed along the same lines. For example, they may have human vs. mutant versions and then here again the hoodie might be more prominent.
Bore Ape Yacht Club
Many NFT projects tried to become popular like the CryptoPunks. The next NFTs to really take off were the Bored Ape Yacht Club apes. Like the CryptoPunks these were designed and sold by a design studio. When Yuga Labs first started selling them you could purchase Bored Apes for a few hundred dollars. Very quickly though prices skyrocketed and now the cheapest Bored Ape is going for a few hundred thousand dollars.
How did Bored Apes become so popular so quickly?
Up until about May 2021 the Punks had been the unchallenged leaders of the profile pic category. The original 9 CryptoPunks, which had this historical provenance value attached to them, were trading for around $20Mn a piece.
At around this time, Yuga Labs emerged trying to get a foothold in this space. Their art ended up becoming pretty popular.
According to an interview with NFT connoisseur punk6529, there are a few things that Yuga Labs did differently:
- They had a low minting price of 0.08 ETH. Previously other collections were minted at escalating prices that ended up annoying early adopters.
- People liked the art. It was more fun but also more mass market. Camps on either side quickly formed. Those supporting the crypto punks, the Original Gangsters, thought the Apes looked kitsch. In contrast, the Ape’s distinctive aesthetic resonated well with those of an opposing view.
- Yuga Labs was very clever or lucky because their apes were endorsed by celebrities. Anyone from musicians to athletes was purchasing them like hotcakes for astronomical prices: Madonna, Paris Hilton, The Rolling Stones, Snoop Dog, Jimmy Fallon, Steph Curry, Serena Williams, Alexis Ohanian just to name a few. If CryptoPunks are the Stradivarius Violin of the modern era, Bored Apes are its Rolexes. A Stradivarius violin has historical provenance value attached to it. Rolex on the other hand is a professionally managed brand. Heavy advertising and sponsoring of celebrities are what build the brand narrative.
- They have their own Coin called Ape Coin which you will be able to use to buy these NFTs. I am going to tell you more about this later.
- The Bored Apes collection conceded IP rights to the token holder
Let’s explore this last point because it is important.
3/10. Copyright and Intellectual property
When you think of art, almost all of it operates under the model where the artist retains the copyright. If you buy a Picasso painting it does not mean he has transferred the copyright to you so that you can print t-shirts. Similarly, if you buy a Star Wars movie you do not own the franchise. Most NFTs follow this model.
Yuga Labs broke away from this trend. When you buy a Bored Ape you own the copyright to that ape. This means you can print t-shirts or commercialize them in any way you want. For example, people have placed their apes on a microbrewery, on a coffee brand, and as their DJ logo. There is even a virtual band that has used 3 apes to represent themselves. Copyright ownership was a key factor in helping the bored apes break away from thousands of other collections.
Take note of how the Yuga Labs team is much more strategic in the way they execute and how they accelerated the brand compared to the two rebel designers at Larva Labs.
What about the crypto punk IP status you may ask?
Larva Labs never announced what the status is around CryptoPunks’ intellectual property. They did however issue clarity on another NFT collection of theirs: Meebits.

Meebits was another collection from Larva Labs that was gifted to CryptoPunk holders. If you had a CryptoPunk you got a Meebit.
The Meebits controversy
When they launched Meebits, Larva Labs announced that they owned the copyright to Meebits which meant no one could commercialize them. While few CryptoPunk holders are likely to have wanted to commercialize (they are thought to be mostly rich and more ideological), the restrictive corporate commercial rights policy clashed with the values of decentralization. Here were these programmers who were building open decentralized systems without centralized intermediaries and now a corporate company was restricting their right to use their cultural symbol.
To offer some form of appeasement there was a clause in the copyright that allowed you to commercialize up to $100K per year provided it was not digital commercialization. Effectively, they were saying you can print t-shirts and baseball caps for your family and friends. Punks saw this as an insult:
- No one starts a business that will have an upper ceiling of a hundred grand a year and
- The whole point of NFTs is that they inaugurate this digital revolution. What’s the point if you cannot digitize?
The fact that Larva Labs never clarified their position around CryptoPunks just irritated holders further. They criticized Larva Labs for lack of transparency. People wanted to know whether CryptoPunks would be issued commercial rights or public domain rights.
4/10. Yuga Labs acquires Larva Labs: what does this mean?
On March 11th, 2022 Yuga Labs announced that they had acquired Larva Labs. People had mixed feelings about the acquisition.
On the one hand, the CryptoPunks, who represented the counter-culture, were being absorbed into the mainstream. Yuga is not a two-person studio. On the contrary, Yuga is poised to become a commercial behemoth in the NFT space and beyond.
On the other hand, Yuga Labs announced they would be placing CryptoPunks under the same license as the Bored Apes effectively issuing commercial rights to punk holders. This was great but there was no one more annoying that could have done this than Yuga. The punk community had this immortal historical provenance narrative and suddenly the Bored Apes, who punks condescendingly looked down upon as a fashion business, freed them from their shackles.
The acquisition has shifted the punks’ narrative. It is one thing to be the original gangster and another to be the fourth-largest collection in a conglomerate backed by VCs. What if Facebook or Disney acquire Yuga Labs? These guys do not want to sell out and become some punks’ game in the metaverse. This is kind of equivalent to an underground band going mainstream: “They sold out man”.
On the flip side, the punks are now in control of their own destiny. They can band together if they want and build a new narrative.
Hey, random plug here, but if you are interested in trending coins there is a weird one called CLM coin that people are searching for right now. Just click on that link to find out more.
Moving on.
5/10. Commercial models
The biggest difference between Yuga and Larva is that Yuga is way more valuable. They have a 100% gross margin from royalties: they own 5% of every Bored Ape. So whatever commerce arises from Bored Apes they get 5%. Imagine every time a Bored Ape trades on Open Sea (largest NFT marketplace) they get 5%. This means that Yuga Labs has a multibillion-dollar valuation: $4Bn to be precise. At this valuation, they were able to raise $450Mn from VCs and buy Larva Labs’s stock of punks as well as the rights to their intellectual property.
The fundraiser was led by a16z (the Andreessen Horowitz venture capital company) and included Animoca Brands and others. These are big names.
Larve Labs have very expressly said they do not want to become a big business. They wrote history by introducing the world to NFTs as profile pics and as generative art. But they consider themselves artists and cutting-edge programmers rather than business people.
6/10. The leaked slide deck about Ape Coin
Shortly after the sale, a Yuga Labs deck “accidentally leaked”. Given the quality and completeness of the slide deck many view this as a PR stunt. Whether it was a genuine leak or not the result is that it helped with publicity.
Yuga Labs Slide deck summary
The deck is 90 slides so here is a quick summary
- The Yuga team is professional. Its 46 staff are all ex-Google, ex-Facebook, ex-Twitter, etc.
- They will expand IP either in-house or via acquisition and have big plans for gaming, a metaverse, etc.
- They have a successful community with cultural significance and celebrity endorsement. Yacht parties, treasure hunts, and online games reinforce this sense of belonging.
- They are big. 10% of sales on OpenSea = $15Mn per day in 2022 so far.
- The future is metaverse. What others are building is underwhelming. What we will build will be different.
- In their metaverse, you will be able to own land and NFTs, dress your characters and build stuff (basically what all metaverses do). They will also have an SDK for anyone to build in their metaverse. An SDK stands for Software Development Kit. Effectively, they are saying they will be a platform where people can build stuff.
- For all of this to come together they will introduce a new coin called Ape Coin which will be their metaverse’s currency.
- They introduce their metaverse: A new set of characters called Kodas, a cosmic creature, give birth to the Apes.
- They will launch with a land sale of 200K plots. They will start with 100K plots at 1 ETH. 30% of these plots will go to Ape holders. Some land parcels will have extra goodies. You might even find a Koda hidden inside (5% chance).
- Last year their net margin was $127Mn because they get a cut whenever someone buys/sells a Bored Ape. In 2021, the total sales from Apes changing hands exceeded $1Bn. In 2022 they expect to make about $455Mn primarily through the sale of land.
7/10. Ape coin explained
Ape Coin will be a combination of a payment token and a governance token. It is an ERC-20 currency, i.e. it uses the Ethereum network and will be Yuga world’s currency.
Ape coin’s price was ~$7 when it launched. The fully diluted value of Ape Coins as of March 2022 is already at around $11.5Bn. This sounds crazy but then on the other hand we have entered a zone of speculation about the future: metaverses, gaming etc. No one really knows what all this is going to look like.

A lot depends on the execution of Yuga Labs and so far it looks as if they know how to execute. Of course, it is one thing to issue and create a buzz around a set of NFTs and another to build a new meta RPG (role-playing game) game that no one has done yet. If successful then the services and in-game sales that require Ape Coins would create a base layer of buying pressure. However, the fact that they are selling land without even having the Metaverse set up is kind of like Disney selling season tickets without having laid a single brick yet to build Disneyland.
BTW if you are interested in the gaming aspect of Web3 check out my deep-dive into Genopets, a move-to-earn game where you can convert your steps into tokens.
The question, therefore, is whether Yuga will become the Marvel or Disney of the digital era.
Ape Coin has the following 4 uses
- It is the primary currency in their metaverse game: The Otherside. You can use it to buy land, NFTs, and so on
- It acts like a governance token that you can use to vote on DAO decisions. More on the DAO later
- It seems like there are discussions on Discord around being able to stake your Apes for Ape Coins
- It’s a currency. You can already use Ape Coin to purchase Merchandise like t-shirts from Yuga Labs. You can also use Ape Coin as in-game currency for Animoca Brands’ game: Benji Bananas. What’s more interesting is that TIME magazine has announced that you can purchase a subscription with Ape Coins. I guess this is a PR move rather than a first step to becoming a mainstream currency.
Tokenomics and Ape coin distribution
Ape Coin supply is fixed at 1Bn. On their website, Ape Coin say that this supply is impossible to increase through the current smart contract that they use on Ethereum to mint this coin. Similarly, supply cannot be burnt. So fixed supply means there can be no inflation or deflation.

The tokens are distributed as follows:
- 47% will go to the DAO treasury and resources. Not sure what “resources” means here.
- 15% goes to Yuga Labs.
- 8% goes to the 4 Yuga Labs Founders.
- 14% goes to the VCs & people who helped make this happen. I assume that means VCs again.
- 1% goes to Charity: the Jane Goodall Foundation.
- And finally, 15% is airdropped to current Bored Apes holders.
Ape holders received the airdrop at launch. The rest of the coins vest over time, the maximum being 48 months.
8/10. Early Criticisms of Ape Coin
Ape Coin is issued and managed by the Ape Coin DAO. This technically is not supposed to have anything to do with Yuga Labs. It is a separate decentralized entity that holds the IP rights to the Ape Coin logo and manages decisions around minting and other community-related concerns. Ape Coins holders can use their coin to vote on DAO decisions
Criticism on decentralization
This is where things get a little murky and where Ape Coin comes under criticism. The DAO is supposedly decentralized but effectively it isn’t. As you could see above the VCs and Yuga Labs currently can band together to enforce any decision they see fit. The Ape Coin Foundation executes the DAO’s decisions. This is common in crypto. Because DAOs are not a legal entity they need a Foundation that will manage things for them.
The Ape Foundation Board comprises some very impressive names:

- Alexis Ohanian is a Bored Ape collector and one of the founders of Reddit. In case you care his wife is Serena Williams.
- Amy Wu is a renowned name in the crypto space and is head of Gaming and ventures and FTX, one of the largest crypto exchanges.
- Maaria Bajwa is principal at a VC.
- Yat Siu is one of the founders of Animoca Brands which is a big deal.
- Dean Steinbeck is the President of Horizon Labs which is a blockchain services company.
Criticism of SEC status
Another criticism of the whole setup is that Yuga and its investors seem to have been very deliberate about the status of Ape Coin. It has the narrative of decentralization which puts it in a gray zone as far as whether the SEC will qualify Ape Coin as a taxable security or not. We will see how this evolves but the strategy is clear on this one. This Verge article is pretty good at explaining the potential scrutiny it could come under.
A final aspect that has added a slightly negative slant to the Ape Coin story is the hack that occurred shortly after the launch.
9/10. The $1 Mn Ape coin Hack
New coins or blockchains are often accompanied by some controversy. In the case of Ape Coin, “hack” is probably not the most appropriate word for what happened. Rather it’s more like someone taking advantage of a glitch. I leave it to you to decide whether this is brilliant or unacceptable.
As described above the Ape Coin launch happened by distributing Ape Coin tokens to Bored Ape owners. So, for example, if you had a Mutant Ape you got 2042 Ape Coins. If you had a Bored Ape you would have received 10,094 tokens. At today’s price that is about $130K. Imagine: if you had bought a Bored Ape, the cheapest of which is $300K you would now have an additional $130K.
How the hacker used a Flash loan to their advantage
You are probably aware that you can buy and sell NFTs on various platforms. NFTx.io is one such platform. On NFTx.io you can take your NFTs and put them into a vault and securitize them into a token that you can sell. At the time there were 5 Bored Ape NFTs worth $1.5Mn in a vault on NFTx.io that had not claimed their Ape Coins yet.
Someone bought their own Ape Coin for about $300K. They then used this as collateral to take out a loan. With the loan, they purchased the 5 Apes. They then claimed the 60K Ape Coins airdrop that belonged to the 5 NFTs. At that time that was a little over $1.1Mn. They then paid back the loan. This process happens instantly in a smart contract known as a flash loan (because it executes immediately).
There is a lot of debate on social media about whether this was theft or not. Technically it is not. It is like me lending you a tool and then you using it in a clever way. If I am lending you the tool then it should not matter what you do with it. On the other hand, the intent of the airdrop was that it goes to Bored Ape owners rather than flash loan borrowers. So maybe the Bored Ape Foundation / DAO could have done a better job of deciding under which conditions you could claim the airdrop.
Andrei Jikh has a great video explaining the Ape Coin hack in detail if you want to take a closer look:
10/10. Ape coin land sale
On the 30th of April 2022, Yuga Labs initiated their land sale.
This didn’t go too well.
While there were 55,000 plots on sale there was demand for 200,000 plots. Looking back, a key reason was the price. At the fixed price of 305 ApeCoin (which was about $6,000) per plot, demand far outstripped supply.
While initially, Yuga had announced that they planned to use a Dutch auction to sell the land they changed their minds at the last minute. The reasons for this aren’t entirely clear.
What is a Dutch auction?
In a Dutch auction, the seller quotes a price ceiling and starts moving down in increments. This way people will only buy at what they think is the fair price.
What went wrong with the Ape Coin land sale?
Remember that everything is happening on the Ethereum Network. In order to transact on Ethereum you need to pay gas fees. So if you have ApeCoin in your wallet and you want to exchange this for an NFT representing a virtual plot of land, then you need to pay gas fees.
What happens when there are many people waiting for their transaction to go through?
Why, people can pay a higher gas fee to get their transactions to move to the front of the line and get processed faster? This is similar to traveling business class on a flight.
Because demand was so high, buyers ended up paying more in gas fees (about 2-3 ETH) than they did for the actual NFT.
All in all, Yuga is thought to have raised about $300Mn while people spent ~$500Mn.
That is a whopping $200Mn wasted.
What else you should know about the Yuga land sale
In order to purchase land users needed to KYC. KYC stands for know-your-customer and is a common abbreviation used in banking.
In essence, Yuga wanted there to be a way to connect wallets to a living person.
Some have said they wanted to avoid bots from front running (a kind of crypto hack) anything.
This did not go down well with the ApeCoin audience whose Web3 spirit is closely tied with the desire to remain anonymous.
The plan was for people to be able to purchase only 2 plots.
Ouh! What happened with the Kodas
Those who were lucky got some Kodas with the land they purchased. Normal Kodas were trading around $60-90K. There were also 100 “mega” Kodas, i.e. rarer ones, that traded in the hundreds of thousands of dollars.

What’s next for Yuga land sales
Yuga has announced that they are thinking of building their own chain rather than relying on Ethereum. It remains to be seen if this is a good solution or not.
A further development that people are waiting for is the announcement about the game design and rules. Right now it is not clear which type of plot is strategically more valuable. Like any game, metaverse projects will take a while to materialize. Once the game emerges we can expect a swap between those who bought to flip their investment and those who want to play the actual game.
Wrapping up Ape Coin
I don’t think we will reach a stage where people will shout the emperor has no clothes. Clearly, there are many who, when they step into this world of multi-million NFTs, think it is ridiculous.
The flip side of this view though is that NFTs such as CryptoPunks and Bored Apes are here to stay: they have a cultural narrative and significance that is digital. This gives it a lot of flexibility in terms of how things might evolve. If Yuga Labs and their experienced VCs execute well then Ape Coins will become a substantially important currency in the crypto space.
BTW you can also check out how to buy Ape Coin and the ape coin contract address.
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