Over 25 million APE tokens will be released for backers at launch, will the token dip sharply?

ApeCoin’s APE tokens slid early Friday in anticipation of a token release over the weekend that would release over 25 million tokens and increase selling pressure.

APE is the native token of the Decentralized Autonomous Organization (DAO) ApeCoin, a community-driven effort established to lead the growth and development of the Bored Ape ecosystem. The tokens were launched in March and distributed to holders of the Bored Ape NFT range.

The 25 million tokens – which represent 8% of ApeCoin’s current supply in circulation – are part of a planned series of releases that would eventually lead to a final supply of 1 billion APE, up from 314 million currently.

Of the total billion supply, 62% belongs to the ecosystem fund, 16% to ApeCoin issuer Yuga Labs, 8% to the Bored Ape Yacht Club (BAYC) founders and 14% to independent contributors to the launch. Unlocks for Yuga and BAYC Founders are scheduled for March 2023, while this weekend’s unlocks are part of the backer token supply.

Information about the identity of these contributors is not publicly available. However, cryptocurrency research firm Delphi Digital said in a note on Friday that it was “reasonable to infer that these are investors such as a16z, Animoca Brands and FTX” – as the funds participated in funding rounds for Yuga Labs and supported the development of the ApeCoin DAO.

The million dollar question is whether these launch contributors will sell their tokens once released.“, added Delphi analysts. “This will lead to significant selling pressure on $APE“.

APE traded at $4.80 in the Asian morning hours, down 6.5% in the past 24 hours, even as the broader crypto majors changed nominally. The tokens have lost around 21% of their value over the past month, even though bitcoin and ether have remained in the same range.

But despite the upcoming unlock, some analysts have 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 nudge that will remind investors of the essence of the coin: Which is to create value for everyone in the Bored Ape ecosystem.“explained Chris Esparza, founder of Vault Finance, in a Telegram message.

ApeCoin holders can be sure of the fact that another viable revenue stream is about to be launched, this would undoubtedly revitalize interest in the token and lead to accumulation“, added Esparza.

Horizen Labs, the company selected by ApeCoin’s DAO to build the staking product, confirmed in July that development was underway and the team was aiming for a “fall launch“, i.e. the period from September to December.

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