$APE staking – Sustainable?

An analysis on sustainability of $APE staking program launched today

Hello anon,

Today, rewards for people staking tokens in the $APE / BAYC ecosystem will start to accrue

Below some details on structure and likely impact on price to help you navigate the event

HOW STAKING PROGRAM WAS STRUCTURED

• On December 5th, staking for $APE was announced

• c.45m $APE tokens have been staked in the pool so far (c.$160m)

• There are four pools

  • POOL 1: Single side staking for $APE (pool rewards could be 30m tokens maximum for year 1)

    • 15m $APE staked so far

  • POOL 2: $APE + BAYC contribution (pool rewards could be 47m tokens maximum for year 1)

    • 21m $APE staked so far

    • You can stake 10k $APE for each BAYC

  • POOL 3: $APE + MAYC contribution (pool rewards could be 19m tokens maximum for year 1)

    • 7m $APE staked so far

    • You can stake 2k $APE for each BAYC

  • POOL 4: $APE & BAKC + BAYC or MAYC  (pool rewards could be 4m tokens maximum for year 1)

    • 1.5 $APE staked so far

    • You can stake 0.8k $APE for each BAKC

Source: https://app.apestake.io/pools

HOW STAKING PROGRAM CAN HELP BAYC / $APE ECOSYSTEM

• Initial APYs were the following, but are going down as more assets are added into the pools

  • $APE only: 1,209% APY

  • BAYC pool: 1,126% APY

  • MAYC pool: 1,297% APY

  • BAKC pool: 1,278% APY

Source: Dune

• Current APY is the following (source: https://dune.com/ponzidope/apecoin-staking-apy)

  • $APE only: 297% APY

  • BAYC pool: 344% APY

  • MAYC pool: 388% APY

  • BAKC pool: 347% APY

• Long term, it will be reduced to “normal” levels as more people have incentive to stake given otherwise they will get diluted

• Staking helps support demand on $APE and NFTs (attracts potential buyers willing to earn yields on the token)

• This also helps reducing selling pressure on $APE (investors have incentive to hold the token)

  • Trading volume of BAYC increased 2x vs. last 7-day average; floor price mostly stable

  • Trading volume of MAYC also increased 1.5x vs. last 7-day average; slight increase in floor price

  • Trading volume of BAKC increased about 3x vs. last 7-day average; good pump in floor price

Source: Opensea

• We can see the impact of the staking program in the chart below: the $APE balance in NFT holders wallets and exchanges has been dropping dramatically

  • $APE on exchanges is very close to all-time-low

  • NFT holders have staked ~30% of their holdings so far

EXTRA:

• The effect of the unlocked staking pool for $APE are outlined above and below: but if interested to an excel database with past and future unlock dates of other 150 coins, feel free to reply to this email

DRAWBACKS OF STAKING PROGRAM: IS IT SUSTAINABLE?

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