ApeCoin Migration Draws Interest From Avalanche, Flow
The Bored Ape Yacht Club-linked ApeCoin DAO is in talks with layer 1 suitors as the project considers a post-Ethereum future.
After Yuga Labs’ disastrous non-fungible token (NFT) minting for its “Otherside” metaverse land sale cost investors more than $100 million in transaction fees, board members of the Bored Ape Yacht Club-linked ApeCoin DAO are listening to offers about migrating ApeCoin (APE) off Ethereum, CoinDesk has learned.
Two suitors are Avalanche and Flow, according to executives at the firms behind both networks. Both blockchains consider themselves to be better suited for hosting a large-scale NFT ecosystem like the one Yuga is building.
Yuga Labs first alluded to a potential ApeCoin migration at the end of an April 30 Twitter thread, “encouraging” the decentralized autonomous organization (DAO) comprised of APE holders to consider it a possibility.
A source familiar with ApeCoin Foundation told CoinDesk the board had not previously considered migrating to a different layer 1, but that the tweet prompted discussion among the DAO’s members about a potential move, which remains ongoing.
While the DAO board is not “actively shopping” for new chains, according to the source, it recognizes its responsibility to implement the wishes of the DAO, including a chain migration if it were to be voted through in a proposal.
Members of the ApeCoin board include Reddit co-founder Alex Ohanian, Animoca Brands chairman Yat Siu and FTX’s head of gaming, Amy Wu.
The DAO has so far voted on 11 different proposals since its creation in March. Yuga Labs did not respond directly to CoinDesk’s request for comment on its influence over the decision-making process.
The case for AVAX and FLOW
In the case of an Avalanche move, Yuga’s ecosystem would be able to exist on its own subnet, which is a technology that allows the transactions of a single application to be isolated without clogging the broader network.
Avalanche committed $290 million to attracting subnets in March, though talks with the project remain preliminary.
“We’ve had some early discussions with [ApeCoin DAO] about subnets, and we’ve certainly got our pitch ready to go,” Kevin Sekniqi, co-founder and chief operating officer at Ava Labs, told CoinDesk in an interview. “We all saw it with the land sale, NFT ecosystems of that size need to exist in a scalable environment.”
Flow’s blockchain offers a similar value proposition, having proven its capability of handling high-transaction volumes with NBA Top Shot, which sees tens of thousands of transactions each day.
Dapper Labs, the company behind Flow, also created the blockchain out of similar necessity following its famous CryptoKitties NFT debacle that temporarily choked Ethereum in a similar proportion to the Otherside sale.
“We’ve had some conversations with folks that are board members [of ApeCoin DAO], and I think it's going to come down to a vote,” Mik Naayem, chief business officer of Dapper Labs, told CoinDesk in an interview. “CryptoKitties faced similar challenges, and I think that Flow would be a great home for [ApeCoin], that being said there's still a lot of assets on Ethereum and things to consider.”
Pros and cons
The benefits of Yuga moving its ecosystem to its own chain are apparent – lower transaction costs, faster network speeds, the ability to pay gas fees in APE, etc. But potential problems that could stem from the move are just as obvious, like what the firm would do with all its existing Ethereum assets, which total over $1 billion in market cap.
Even with its own chain, plenty of complications could persist. The popular play-to-earn game Axie Infinity is seen by many as a cautionary tale of migration, most recently suffering from a $625 million exploit of its gaming-focused Ronin network. On the other hand, Crabada – based on its own Avalanche subnet – has emerged as a nascent Web 3 gaming hit.
As Dapper Labs’ Naayem said, the decision about migrating chains will ultimately be decided by members of ApeCoin DAO, an entity Yuga has affirmed it is not in control over, though undoubtedly influences.
UPDATE (May 17, 15:56 UTC): Sekniqi later clarified Ava Labs was in talks with ApeCoin DAO, not Yuga Labs, about a prospective subnet.
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