Overnight ApeCoin popped as high as US$27.79, vaulting over previous all-time-high of US$17.17, which it achieved less than two weeks ago.
The surge is yet another extention of its rally triggered from rumours that the altcoin could become a key payment token in BAYC‘s upcoming metaverse land sale.
Rumors have it that BAYC and Mutant Ape Yacht Club (MAYC) NFT owners might receive virtual lands on Yuga Labs’ Otherside metaverse platform and that public land sale will be priced in APE.
On Saturday, those who registered on somethingisbrewing.xyz before 1 April 2022 will be able participate in the first mint for Otherside. Anticipation for the sale is thought to be driving the altcoin’s value.
With a market cap of over US$5.7 billion, ApeCoin is the 28th biggest cryptocurrency.
However, all is not rosy with ApeCoin’s journey. As highlighted by Twitter user Cobie, staking incentives for the BAYC ecosystem is somewhat questionable.
ApeCoin DAO’s treasury has around US$7 billion, and Animoca plans to give away US$2.6 billion dollars for free to holders to incentivise them to hold onto ApeCoin fpr the next three years.
As ApeCoin’s staking doesn’t do anything other than return more ApeCoins, Cobie describes the system as a “bribe not to sell.”
Cobie highlights how the DAO is spending 37% of its treasury on such bribes, suggesting that the iniative “must be important.”
According to Cobie, the staking program could be “harmful to the financial interests of the locked-coin holding insiders” as there is only ~15% of the supply liquid on the market.
“This inflation/emissions schedule will increase the amount of supply on the market by ~75% in only the first year. And yet I don’t believe that it will increase the demand for ApeCoin by 75%,” Cobie explains.
Instead, the DAO’s equity should be spent on growth and the origian goal of becomign the currency of web3 as well as solving problems for users, according to Cobie.
Such problems include OpenSea being the main exchange for BAYC, seeking revenue from the project. ApeCoin DAO could create a primary NFT lending marketplace which returns credit to BAYC NFT holders. Hacking is also another area that the DAO could help to address through bolstering stringent measures and developing educational resources.
BAYC has actually attempted to address concerns about its staking program, stating that BAYC NFTs will contain ApeCoin tokens.
“To sell the NFT only, without the associated staked ApeCoin, the NFT seller would unstake the ApeCoin prior to listing the NFT,” BAYC reportedly responded. If you lose your BAYC, you also lose your APE.
When asked why one can’t smply stake a BAYC ecosystem NFT, the ApeCoin board responded “We believe that everyone in web3 should have control of their assets. In order to provide NFT owners this right, the NFTs themselves will not be staked into the staking pools. Furthermore, by staking ApeCoin rather than the NFTs, the ApeCoin DAO incentivizes and fosters the long-term growth of the ApeCoin holder community.”
Cobie slammed the response as “treating users as dumb” for telling them that “everyone should control their assets” whilst also telling them which assets can go in which contracts.
The Twitter user also took issue with the lack of direction the ApeCoin DAO has after the three year staking period. “Ideally, by the end of the total staking period of 3 years, the DAO will have sustained revenue to keep incentivizing staking and rewarding ecosystem participants,” the ApeCoin board said.
Cobie suggested it would make more sense to establish the revenue plans prior to the staking program. “Designing a staking program without understanding a product and revenue plan that it is subsidising in the first place also seems pretty wild,” the Twitter user said.
It’s hard to not be mesmerized by the BAYC journey and to feel excited about its ecosystem, even as a bystander. With the Otherside metaverse just around the corner, ApeCoin’s price has understandably surged, and holders should be thrilled to be part of the historic project.
However, with a short sighted staking program which does not seem to be tailored towards growth, the BAYC team could ultimately disappoint their holders. As much as we don’t want to see this happen, Cobie’s criticisms of the BAYC ecosystem and its staking “bribery” certainly leaves us with a sour taste. Our hope is that the board will evolve its strategy to unleash its full potential by encompassing a comprehensive ecosystem which can serve as a Web 3.0 bolster.