Yuga Labs the team of blockchain enthusiasts, developers, and entrepreneurs has created a new decentralized altcoin called ApeCoin. Yuga Lab’s first coin is an Ethereum based token with its own wallet built in to keep track of transactions on a distributed ledger system. This means you can now trade or buy goods directly from your web browser without needing to download anything else!
Web 3 Tokens are designed for fast payments and no transaction fees making them perfect for everyday commerce such as buying coffee at local coffee shops or food at restaurants around the world.
- Upon the recent launch of Yuga Labs’ ApeCoin ($APE), questions have arisen concerning its tokenomics. Many believe that this appears more “centralized” than what it is actually touting, leaving it open to domination by venture capitalists.
- Previously, Elon Musk and Jack Dorsey had expressed skepticism about Web3 projects’ “decentralization.”
ApeCoin $APE Explained
Questions surrounding ApeCoin ($APE)’s tokenomics have surfaced since its launch, leading many to question whether this is a truly decentralized network.
Yuga Labs announced ApeCoin, a cryptocurrency that it says will be used for games and entertainment in the future. A total of 1 billion ApeCoins were distributed via an airdrop on Thursday.
According to CoinMarketCap, it had a 24-hour trading volume of over $9.2 billion. The coin provides holders with voting and influence over Bored Ape DAO, where the DAO will use blockchain technology to enable and record votes on decisions affecting how the Bored Ape community is managed, as well as Yuga Labs’ role as a metaverse provider.
However, there are various controversies surrounding the new cryptocurrency, starting with regulatory concerns as the way the token was unveiled and released, bears a close resemblance to how a company would debut on a stock exchange.
Decentralized Or Just The Newest Ponzi Scheme?
A closer look at ApeCoin DAO reveals that while on the surface it appears to align with the concept of decentralization, its 1 billion token distribution indicates that it may be more concentrated in the hands of a few individuals.
Token holders of Bored Apes (BAYC) and Mutant Apes NFT will receive 15% of the tokens, and Yuga Labs will receive the same amount of tokens as NFT holders.
In addition, the NFT company’s founders would receive 8% of the total earnings, while launch partners like VC firm Andressen Horowitz and game developer Animoca Brand would receive 14 percent. The Jane Goodall Legacy foundation would receive 1% of the coins, and the DAO treasury would receive the remaining 47%.
This leaves a lot of room for centralization, since the number of tokens held will determine the weight of votes on governance decisions.
Yuga Labs and their other relations receive 23 percent of the total distribution, which will exclude Bored Apes and Mutant Apes NFT holders – if those two parties are included, their share rises to 38 percent.
As for Andreessen Horowitz and other launch partners like Animoca Brands, they will also exert substantial control over the DAO due to their ownership of 14 percent of the coin.
Who will have the majority in ApeCoin?
Due to the way tokenomics are currently set up, the VC and its partners can substantially influence the DAO’s operations— an activity that would lean into the criticisms of Twitter co-founder Jack Dorsey and Elon Musk about Web3 and metaverse-related projects becoming centralized projects.
As a result, if Yuga Labs and the other majority holders want to cash out, they would make substantial profits, leaving other unsuspecting investors with a loss. Alternatively, if they choose to hold, they would also be able to influence how the community operates extensively.
In addition, Yuga Labs recently acquired Meebits and CryptoPunks IP, which means it now owns and maintains two of the most valuable NFT collection projects, further extending its dominance of the NFT space.
Thus, we are left with the question of whether these projects are actually in the process of creating a decentralized Web3 – or serve as a disguised form of centralization that is nothing more than another cash grab.
Via this site.