Recently, a new NFT hit the crypto market, but this one came with a twist. In this video clip from "The Crypto Show" on Motley Fool Live, recorded on March 23, Fool.com contributors Travis Hoium, Jon Quast, and Chris MacDonald discuss the details about ApeCoin, which surprisingly wasn't launched by Yuga Labs, developer of the popular Bored Ape Yacht Club.
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Travis Hoium: Last week, the ApeCoin was launched. There are a few things that I want to note about this. This is not from Yuga Labs, who is the developer of the Bored Ape Yacht Club. That is wild to think about, given the way that it was framed. I'll drop a couple of Twitter threads in the Slido here in a second, but this is like an adjacent coin that the Bored Ape Yacht Club has said they will use for something, something in the future, [laughs] some metaverse thing that they're going to build.
A bunch of the coins were also given to the Bored Ape Yacht Club founders, 8% of coins. That's about a billion dollars at today's market cap of about $13.2 billion. The ecosystem itself, so Bored Ape Yacht Club, Mutant Ape, and I think one of the other ones were airdropped or it was an airdrop. You can go to the site and get access to a certain amount of coins.
Then a lot of those people sold those immediately. That's what's selling in the secondary marketplace is the NFT holders who got those tokens and then have been selling them. But a lot of the asset, a lot of these billions of dollars in value is sitting with Yuga Labs who got 16% of it. Then there's a small amount of that that is going to go to a charity. Launch contributors who are basically the people who built this token are taking a little over a billion dollars. There's a lock-up period, but I think the entire lock-up ends after three years.
This is another token that's out there now. I don't know exactly what to say about it because we can't do anything with it at this point. Right now, it's analogous to Dogecoin (DOGE 0.19%), except for instead of being somewhat associated with Elon Musk, this one is associated with the Bored Ape Yacht Club. It'll be really interesting to see what happens with this.
At the same time, Yuga Labs did raise $450 million. We're seeing them raise money to build some sort of metaverse project and build some sort of media business, but that doesn't exist at this point. So there's a lot going on here and a lot of money floating around, but we got another token in the market and another big fundraise for the NFT space. I don't know what your guys' thoughts are on these two things because the numbers are just getting so big.
Jon Quast: Well, I was shocked, Travis, when you mentioned just before we came on the air that ApeCoin was not developed by Yuga Labs. I hadn't researched it at all, but I just assumed that it had to have been from them. The fact that somebody else developed this, gave the founders a billion in coins, and now the Bored Ape Yacht Club is going to be using ApeCoin, I mean, wow, [laughs] nothing to see here, right?
Hoium: Yeah, that is the case here. I dropped these in Slido, the notes. A specific one from Yuga Labs, it says, "We're excited to announce we're adopting ApeCoin as the primary token of the Bored Ape Yacht Club ecosystem as well as the future Yuga products and services." But to be very clear that they were not launching it and I saw some quotes from the CEO and some of the executives that Yuga pushing back on reporters saying like this, "No, we did not launch this coin. This is not our coin. We will use this coin, but we don't want to be associated with saying that we launched it," which is a strange dynamic to be in this marketplace.
Quast: Definitely is. Go ahead
Chris MacDonald: It looks like they got almost like a naming rights deal to be associated with the project, but it doesn't fit into them.
Hoium: Yes, there was an IP token that the ApeCoin is allowed to use some of that IP. That is part of the deal, but it's a strange dynamic there. Yuga Labs raising money and building some sort of metaverse I think is potentially more interesting here long term because this has been a really successful NFT project, but what does the future of this company look like? I think we'll probably find out a lot more over the next year or two.
Quast: Definitely. Nothing necessarily shady going on here, I don't want to imply that, but it's just a nice reminder that we always do need to have both eyes open especially in the crypto space.
Hoium: Yeah. I just want to note, this is not unusual. Why is Vitalik Buterin, if I'm saying that correctly, a billionaire? It's because when he was developing the Ethereum (ETH 0.44%) blockchain, he was given a whole bunch of ETH. This is how this works. This is how you get billionaires coming from nowhere in the crypto space is that you create a token, you give it to a whole bunch of people who hopefully they find value in it, but there are the insiders or winners that are taking a huge, huge chunk of the value. Not unusual, not unheard of, but worth knowing some of the background there.