ApeCoin, the Ethereum-based token created for the Bored Ape Yacht Club NFT ecosystem, debuted in March to much fanfare (and significant payouts for BAYC holders). Now that some of the project’s backers are set to receive over $115 million in APE tokens as a reward, holders are wondering how that to unlock will affect the token’s price.
ApeCoin DAO treasury is expected to release 25 million APE tokens for launch contributors
On Saturday, the ApeCoin DAO treasury is expected to release 25 million APE tokens reserved for “launch contributors,” who are unnamed “companies and people who helped make this project a reality,” according to the website. The 25 million tokens will become available six months after ApeCoin’s March 17 launch.
The current price of $4.61 per token amounts to just over $115 million in tokens entering the market, increasing the circulating supply by about 8%. ApeCoin was created with a fixed supply of one billion tokens, and there is currently 318 million APE in circulation. The rest will be unlocked over four years, beginning with the March launch.
It is unknown who falls under the category of launch contributors. However, according to a new report from crypto industry research firm Delphi Digital, the list could include backers of Yuga Labs, the creator of the Bored Ape Yacht Club, which raised $450 million at a $4 billion valuation in March.
The research firm identified Andreessen Horowitz, Animoca Brands, and FTX Ventures as potential beneficiaries
It’s worth noting that Yuga Labs isn’t listed as the creator of ApeCoin, presumably for regulatory reasons. Instead, the ApeCoin Foundation serves as the token’s “steward,” and the ApeCoin DAO governs it, or decentralized autonomous organization, an online group united by a common goal with token-based membership.
It remains to be seen whether such contributors will keep their tokens or sell them on the open market. However, an incoming increase in circulating supply raises concerns about how the market will react to the token unlock.
APE’s price has already dropped nearly 9% in the last 24 hours, according to CoinGecko data. It has now fallen 26% in the previous 30 days.
“The million-dollar question is whether the launch contributors will sell their tokens once they are available for purchase. This will put significant downward pressure on APE,” the Delphi authors write. “No one knows, but if they are long-term Yuga Labs investors, there is a reasonable chance they will keep most of the unlocked tokens.”
Given the apparent impending launch of ApeCoin staking, there may be a significant incentive for launch contributors to keep their tokens.