An On-Chain Look Into The ApeCoin Staking Launch
Staking Mechanism Seeks to Spur Interest in Yuga Collections — Is it Working?
By: IntoTheBlock •DeFi Research
On-Chain Markets Update by Juan Pellicer, IntoTheBlock
ApeCoin is the token of the Bored Ape Yacht Club ecosystem. In March, it launched and allocated 15% of its supply as an airdrop to NFT holders of the BAYC/MAYC/BAKC collections.
On Monday, the DAO enabled its staking mechanism, which seeks to incentivize holders to lock their APE tokens in a smart contract and accrue benefits over time.
The reward share varies depending on whether a wallet holds only APE or a combination of APE and any BAYC/MAYC/BAKC NFT. For example, a larger share of rewards goes to the group that holds both APE and a BAYC NFT.
If a BAYC/MAYC/BAKC NFT holder sells their NFT while their APE is staked, they will lose all of their staked APE, as has been the case for a handful of unaware sellers.
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The staking mechanic aims to minimize selling pressure from NFT holders, who likely still hold APE from the airdrop and are hugely incentivized to stake (with more than 100% projected yearly returns). It also seeks to increase the buying pressure from investors who hold APE and want to amplify their yields by acquiring a NFT from the collection set on marketplaces.
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A good gauge of the sentiment that the staking mechanic has had on collections holders is to analyze if the current listings of a collection are trying to be sold at a loss or gain for the seller. If we take a look at the BAYC listing, we can see that almost 90% of the listings for BAYC are willing to sell in profit, while only slightly more than 10% of the listings are selling at a loss:
BAYC In/Out of the Money indicators according to IntoTheBlock NFT Insights.
Each range corresponds to a price range that might be a percentage over or under the acquisition price of each piece.
The size of the bubble represents the amount of listings that are in that price range. “In the money” corresponds to those addresses that would net a profit if they sell their token at the listed price, while”Out of the money” corresponds to the opposite.
If we take a look at the MAYC listings, thinking that since they are cheaper they would have a worse outcome, we would be surprised. The results are very similar to the ones of BAYC. A plausible explanation of this would be that since they are more affordable than BAYC, there has been a larger amount of buying on their side:
MAYC In/Out of the Money indicators according to IntoTheBlock NFT Insights.
In fact if we look at the listings analytics for MAYC NFTs it can be seen this effect, the MAYC delistings have been growing rapidly: a reduction of 55 NFT listings in a single day is very significant for a collection that usually has less than 5% of its supply listed. This is the largest reduction in listings in the last six months:
MAYC listing variation indicator according to IntoTheBlock NFT Insights.
The effect that large whales might have over the next price performance of the collections is critical. That is why it is usually important to check if these whales are following a trend by selling or buying their pieces.
Number of Whales
If we measure whales as those addresses that hold more than 1% of the supply (100 pieces for BAYC), we can see how the number of whales in the collection has recently increased to 9 whales that now hold more than 900 pieces of the collection. This is very remarkable considering that from October to November they were smaller (from a 0.11% share to 0.09%):
BAYC Historical concentration indicator according to IntoTheBlock NFT Insights.
peaking of whales, it is interesting to understand the rarity of the NFTs that are being bought in order to take advantage of staking. Since the staking contract does not differentiate by the rarity of the BAYC/MAYC/BAKC that is being held, one would suppose that only the most basic pieces are being bought.
Dominating the Category
Far from that, if we take a look at the most expensive NFT sales that happened during a 24 hour period, we can see how BAYC continues dominating this category, with half the most expensive recent NFT sales being BAYCs and MAYCs:
NFT Top Sales indicator according to IntoTheBlock NFT Insights.
Regardless of these positive metrics, the immediate effect of staking on the price of BAYC and MAYC NFTs has been mild so far. Floor prices have been oscillating in the last week between 2 percent up or down. The usage rate of the staking mechanism currently is the next one: roughly 30% of the BAYC supply staked, and 40% in the case of MAYC.
If we track the amount of APE staked over the current circulating supply its share would be 17%. The weak amount of APE that is making use of staking might be due to investors’ apathy, which might be holding their supply in centralized exchanges and don’t want to risk the issues with self custody.
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Another option could be the trouble of accessing the staking website from some countries without the use of a VPN. Nevertheless looking at the enticing yields that staking is currently offering with over 100% yearly yields, we can guess that the usage ratio will grow over time, and if everything goes as planned, so will the NFT floor prices of these collections.