ApeCoin (APE) sees prices dive after NFT sales for Metaverse Otherside.

Originally posted here.
By: Guido

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The hype surrounding ApeCoin (APE) and the related Metaverse Otherside has taken a dip. ApeCoin slips into negative territory on the third day of a […]

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The hype surrounding ApeCoin (APE) and the related Metaverse Otherside has taken a dip. ApeCoin slips into negative territory for the third day in a row after chaos reigned in the first NFT sale for Otherside on Saturday.

There is probably no other new crypto project in 2022 that is as controversial as ApeCoin (APE): ApeCoin’s stock market debut in mid-March drove APE directly into the top 50 cryptocurrencies more capitalized – though not much was known about the potential uses at the time. The huge attention for ApeCoin stems from the fact that this project is linked to the Bored Ape Yacht Club, the most commercially successful NFT collection in 2021. But among the investors who have jumped on the ApeCoin bandwagon, there are also many losers so far. In the last days of April, the APE traded almost consistently above $ 20, with the price curve topping at $ 26. Less than a week later, ApeCoin has currently fallen back to around US $ 15 and has thus suffered a real price crash.

Aside from the negative trends in the overall crypto market, it is the NFTs on ApeCoin that are causing disillusionment. It is important to know that ApeCoin will be the original currency for a planned Otherside metaverse. Otherside was announced in a deliberately secretive manner in late March, and the starting signal for this metavers was given on Saturday. Prior to that, it was learned that there would be virtual properties for Otherside in the form of NFTs to be auctioned off. In order to hit it, many interested people covered with APE. But just a day before the auction, the rules were changed and a fixed price of 305 ApeCoin per NFT was set. As if that was not enough when the Otherside NFT sale was unlocked, demand was overwhelming. This then led to willing buyers also having to pay hefty Ethereum transaction fees. These have become necessary in addition to the actual price of the APE because ApeCoin is an ERC-20 token and NFTs are also based on the Ethereum standard.

Ethereum had to deal with the ApeCoin moment.

Data from Ultra Sound shows how nearly 56,000 ETH Ethereum transaction fees for Burning came together compared to Apecoin and Otherside. Volume was several times larger than normal trading days for Ethereum, where the majority of transaction fees primarily come from the NFT marketplace OpenSea and the decentralized crypto exchange Uniswap. During the NFT sales hours for Otherside with ApecCoin, Ethereum transaction fees of up to $ 10,000 were temporarily charged – this momentum effectively suspended all other activity in the Ethereum ecosystem due to inefficiency.

In retrospect, however, the Ethereum community finds something good in the situation: Since transaction fees are partially destroyed (“burned”) automatically, they also have a deflationary effect on ETH. This principle has been in force at Ethereum since the August 2021 update in London with EIP-1559. Thus, there is something positive to learn from ETH, which is worth the equivalent of almost $ 160 million, now withdrawn from the market by ApeCoin and Otherside, with a deflationary effect for Ethereum.

Conclusion: stormy weather for ApeCoin.

Among so-called metaverse tokens, ApeCoin has so far been able to defend its top position ahead of Decentraland (MANA) and Sandbox (SAND) despite falling prices. But shortly after the launch of ApeCoin, there was already serious criticism of the APE concept, which was triggered by distribution mechanisms and perhaps only pretended autonomy. The aftermath of NFT sales for Otherside will hardly rank ApeCoin so strongly. On the other hand, the Apecoin / Otherside project is still in its infancy and will still have opportunities to learn from its mistakes.

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