Everything you need to know about the $APE token drop

Welcome to this week’s deep-dive. We’re going to focus on the strategy and motivation of issuing $APE. If you don’t know what this about, don’t worry - we’re going to take it from the top.

The background

The Bored Ape Yacht Club (BAYC) is a collection of 10k NFTs. Since launching in April 2021, the total traded value is ~ $1.5 billion. The market cap as of 17 March 2022 is $891 million. The collection was founded by Yuga Labs, who also purchased the CryptoPunks and Meebits NFT collections.


Two other NFTs were launched as related collections:

  • Mutant Ape Yacht Club (MAYC): 20k NFTs that are considered a separate NFT collection.
  • Bored Ape Kennel Club (BAKC): 10K NFTs that were issued to the owners of BAYC. These NFTs have no utility unless you hold a BAYC or MAYC.

BAYC is one of the few NFT projects that gives complete ownership and commercial usage rights to the owner of the NFT.


What is $APE coin?

On 16 March 2022, $APE coin was announced as a token for “culture, gaming and commerce”.

$APE is an ERC-20 token that allows holders to participate in governance, act as a currency for holders to buy / sell, and provide access to exclusive games, merchandise, events, and services.

Token issuance & distribution

There are a 1 billion tokens. No additional tokens can be issued in the future. The tokens are distributed as follows:

Tokens (millions)
% of total
BAYC / MAYC owners
Yuga Labs
Contributors / Team
BAYC Founders

Bored Ape Kennel Club members are not eligible for tokens unless they also hold a BAYC or MAYC. This is because the NFT collection is considered a derivative. Public tokens will be issued in batches — 117.5m unlocked at launch, then 7.3m unlocked per month for 48 months.

Motivation for the $APE coin

Let’s talk about why Yuga labs decided to proceed with the $APE coin. There are 4 key themes:

A return of up to ~1,900x for BAYC and MAYC holders

$APE coin provides return for holders of BAYC and MAYC holders. If someone minted a BAYC when the collection was launched, they could have earned up to ~1,900x. This is important for Yuga Labs because of the message it sends to the community — their NFT collections could have meaningful upside for token holders.

Raising >$900 million

The coin issue allows the community to raise capital. According to CoinmarketCap, there are currently 277.5 million tokens in supply. Even if we assume the entire 150 million has been airdropped to BAYC and MAYC holders, that leaves 127.5 million tokens. The token was listed for $7.50, which means that the community has raised >$900 million. Bear in mind that more $APE will be issued in the future.

Governance? Debatable.

The token will be used for proposals and governance. There are 5 proposals being discussed on in the community already — mostly around budgeting and how staking might work.


Some folks have questioned this approach - i.e. why couldn’t the community use the NFTs to govern? One argument for using ERC20 tokens is to allow more community members to participate. It’s easier to buy $APE coin than it is to buy a BAYC NFT. On the flip side though, BAYC holders will command proportionally higher voting power anyway so it may not matter.

Expanding the ecosystem

The most important reason, at least for Yuga Labs, is expansion of the ecosystem. An NFT collection generates perpetual revenue from royalty sales. In other words, the creator can set the % of future sales that accrue to them. Outside of this though, it’s very difficult to extend the runway of an NFT collection. The only way is to offer other collections.

$APE coin changes this. It could become the token or currency for other projects that want to leverage the BAYC brand. We’ve seen a couple of these already:

BenjiBananas is a play-to-earn game that is allowing to swap tokens for $APE.


E11EVEN residences in Miami is allowing people to purchase a condo using $APE.

To close

$APE is the highest profile NFT collection to do a token drop and issue an ERC20 token. The returns for BAYC and MAYC holders are incredible. Only time will tell if the $APE token is good buy. Historically, airdrops have not faired well. Look at the $LOOKS and $UNI tokens. On the flip side though, BAYC has a brand like none other and Yuga Labs are known for their execution.

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