ApeCoin's APE Could See Selling Pressure Ahead of Major Token Unlock

More than 25 million APE tokens will be released to launch contributors, representing nearly 8% of the circulating supply.

AccessTimeIconSep 16, 2022 at 8:49 a.m. UTC
Updated Sep 16, 2022 at 2:16 p.m. UTC

Shaurya is an analyst/editor for CoinDesk's markets team in Asia.

ApeCoin’s APE tokens slid early Friday ahead of a token unlock over the weekend that will release more than 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 (non-fungible token) lineup.

The 25 million tokens – representing 8% of ApeCoin’s current circulating supply – are part of a planned series of unlocks that will eventually lead to a final supply of 1 billion APE tokens, 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 next March, and this weekend’s unlocks are part of the token supply earmarked for contributors.

Information on who these contributors are isn't publicly available, but 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,” because those firms 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 once released,” Delphi analysts added. “This will lead to significant sell pressure on $APE.”

APE traded at $4.80 during Asian morning hours, down 6.5% in the past 24 hours, even as the prices of other major cryptocurrencies were mostly flat. The APE tokens have lost 21% of their 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,” Chris Esparza, founder of Vault Finance, said in a Telegram message.

“ApeCoin holders can be sure 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 that its team was aiming to release the product this fall.

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Shaurya is an analyst/editor for CoinDesk's markets team in Asia.

CoinDesk - Unknown

Shaurya is an analyst/editor for CoinDesk's markets team in Asia.

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