- ApeCoin, the token linked to the Bored Ape Yacht Club NFT project, was launched on March 17.
- Gabe Frank, the co-founder of Arcade, was among those who claimed the tokens for owning a Bored Ape.
- Frank told Insider his process for claiming them and explained why he’s not selling anytime soon.
Since its launch last Thursday, ApeCoin (APE) — the token linked to the Bored Ape Yacht Club non-fungible token project — has brought a wave of excitement to the NFT market, which has seen trading volumes plunge recently amid the chills of what feels like a crypto winter.
The governance token is launched by ApeCoin DAO, the decentralized autonomous organization in which Yuga Labs — the company that created the Bored Ape Yacht Club collection — and other APE token holders are now members.
Owners of NFTs related to the Bored Ape Yacht Club collection, including the Mutant Ape Yacht Club and Bored Ape Kennel Club, can claim anywhere between 2,898 to 10,094 tokens for each NFT or NFT pair. The ApeCoin, which has one billion in total supply, can be claimed during a 90-day period starting on March 17.
The process of claiming and receiving tokens is called an airdrop. Blockchain protocols including uniswap (UNI), dYdX (DYDX), and ethereum name service (ENS) have used this method to reward early users with “free” governance tokens, often boosting their name recognition in the meantime.
Much like the extremely popular Bored Ape Yacht Club NFTs, the ApeCoin has caused a stir right out of the gate. Not only was it immediately listed on major crypto exchanges including Binance, Coinbase, and FTX, but more than $9 billion worth of the token changed hands in the first 24 hours of trading alone, according to the Financial Times, citing CoinMarketCap data.
The token was trading at $11.43 as of early Tuesday afternoon in New York, giving it a
market cap
of $1.5 billion and a fully diluted valuation of $11.4 billion, according to CoinGecko.
Claiming more than 10,000 APE tokens
Since the token launched, stories about Bored Ape NFT owners claiming and selling the tokens for large sums of money have emerged.
For example, a savvy trader took advantage of how the airdrop works to borrow five Bored Apes with a flash loan, claim the APE tokens, and then pay back the loan in a single transaction that netted the user $1.1 million in ApeCoin, according to The Block. Another 25-year-old NFT collector received 10,950 tokens on the day of the ApeCoin launch and sold them all for $75,000, according to Fortune.
Gabe Frank, the co-founder of decentralized NFT-lending protocol Arcade, is among those who have claimed the tokens in an interesting manner. Frank co-purchased a Golden Bored Ape NFT with a friend for 17.79 ether (ETH) on June 9, 2021, according to blockchain transaction records viewed by Insider. The floor price of Bored Ape Yacht Club NFTs sat at 101 ETH or $303,867, as of Tuesday afternoon in New York, per CoinGecko data.
Because Frank’s protocol Arcade issues NFT-backed loans, he and his friend were able to take out an $850,000 loan using the Golden Bored Ape as collateral. As a result, their NFT was sitting in escrow in the Arcade protocol when the opportunity to claim the APE tokens arose.
To claim the tokens, Frank had to take out a flash loan, a type of uncollateralized, instantaneous loan enabled by smart contracts. He ended up receiving the 10,094 APE tokens in his crypto wallet, according to blockchain transaction records viewed by Insider. Frank said they have since paid back the flash loan and put their Golden Bored Ape back in escrow for the NFT-backed loan.
“We will probably keep it in loan in perpetuity because we have the money working,” he said.
Not selling the APE tokens anytime soon
Based on ApeCoin’s current price level, the 10,094 APE tokens are worth more than $115,374, but Frank said he did not sell any of the tokens and is not planning to sell them anytime soon either.
“I’m pretty bullish on Yuga Labs, the way they did the airdrop, the metaverse they are building, and the community behind it,” he said. “I’m pretty bullish on the coin itself.”
In addition to creating the ultra-popular Bored Ape NFT collections, Yuga Labs recently acquired the intellectual property of the CryptoPunks and Meebits NFT collections from Larva Labs.
On Friday, Yuga Labs posted a teaser video that offers a glimpse into the metaverse it has been building called “the Otherside.”
—Yuga Labs (@yugalabs) March 19, 2022
In a recently leaked pitch deck, the company said it netted $127 million on $138 million in total revenue last year while projecting net revenue of $455 million on $539 million in total revenue this year. The company is also in discussion with venture capital firm Andreessen Horowitz for a financing round that would value it at between $4 billion to $5 billion, according to the Financial Times.
Growing borrowing demand despite cooling interest
As momentum around the ApeCoin builds, the Bored Ape and Mutant Ape Yacht Club collections have boomed, taking the top 10 spots for NFT sales last week, according to DappRadar.
Frank, who believes that most NFTs are “worthless cash grabs,” said there has been a growing demand for loans backed by high-quality NFTs such as Bored Apes, Mutant Apes, Meebits, Crypto Punks, and CloneX despite general cooling interest in NFTs.
“If a lender is willing to lend against that asset, it’s because he’s bullish on that asset or he thinks that the value is not going to fluctuate so much,” he said. “So it hasn’t really affected our business because the high-value, longtail assets are still considered very scarce and rare and there’s demand for them.”
