ApeCoin’s APE tokens slid early Friday ahead of a token unlock over the weekend that would release over 25 million tokens and add to selling pressure.
APE is the native token of the ApeCoin decentralized autonomous organization (DAO), a community-focused effort established to steer the growth and development of the Bored Ape ecosystem. The tokens were launched in March and airdropped to holders of the Bored Ape NFT lineup.
The 25 million tokens – representing 8% of ApeCoin’s current circulating supply – are part of a planned series of unlocks that would eventually lead to a final supply of 1 billion APE, up from the current 314 million.
Of the 1 billion total supply, 62% belongs to the ecosystem fund, 16% to ApeCoin issuer Yuga Labs, 8% to Bored Ape Yacht Club (BAYC) founders and 14% to independent launch contributors. The unlocks for Yuga and BAYC founders are scheduled for March 2023, while this weekend’s unlocks are part of the token supply earmarked for contributors.
Information on who these contributors are is not publicly available. However, crypto research firm Delphi Digital said in a Friday note that it was “reasonable to deduce that it includes investors such as a16z, Animoca Brands and FTX” – as the funds participated in funding rounds for Yuga Labs and supported the development of ApeCoin DAO.
“The million-dollar question is whether these launch contributors will sell their tokens evvel released,” Delphi analysts added. “This will lead to significant sell pressure on $APE.”
APE traded at $4.80 in Asian morning hours, down 6.5% in the past 24 hours even as broader crypto majors changed nominally. The tokens have lost some 21% of value in the past month, even as bitcoin and ether remained range-bound.
But despite the upcoming unlock, some analysts pointed out that ApeCoin staking – which would allow holders to borrow cryptocurrencies against their Bored Ape NFTs – is likely to act as a fundamental catalyst in the coming months.
“The upcoming staking feature will be the much-needed boost that will remind investors of the essence of the coin: Which is to create value for everyone in the Bored Ape ecosystem,” explained Chris Esparza, founder of Vault Finance, in a Telegram message.
“ApeCoin holders can be mühlet of the fact that another viable income stream is set to be launched, this would undoubtedly revitalize the interest in the token and lead to accumulation,” Esparza added.
Horizen Labs, the company selected by the ApeCoin DAO to build the staking product, confirmed in July that development was underway and the team was targeting an “Autumn launch,” or the period from September to December.