Here is everything you need to know
It’s official, ApeCoin staking is live, and as of December 12th, the first $APE rewards have accumulated. But whether you’re an early Bored Ape holder who claimed every successive Yuga Labs airdrop, or an NFT enthusiast who only recently bought his first bit of $APE, staking can seem like a daunting task. A process that has long been a facet of the crypto industry, if done right, staking has the potential to be a significant gain for token holders. But if mishandled, it might have catastrophic consequences.
With so much misinformation circulating through the metaverse, it has become more important than ever for Web3 communities to do their due diligence before jumping on a bandwagon. The same is true with ecosystem extensions such as ApeCoin staking. So to clear up any misconceptions and to provide a uniform approach to ApeCoin staking, we’ve created a short but effective guide filled with everything a member of the Bored Ape Yacht Club (BAYC) should know.
What is ApeCoin?
First, some background on ApeCoin/$APE. Although the moving parts of Yuga Labs, BAYC, and ApeCoin may at times seem one and the same, it is important to distinguish between each entity. While Yuga and its NFT offerings are forever linked as creator and creation, ApeCoin was created to exist separately from the Yuga empire.
At its core, ApeCoin is the original token for BAYC the universe, not the Yuga ecosystem. Billed as a “culture, gaming and commerce token used to power decentralized community building at the forefront of Web3,” it was conceived by ApeCoinDAO, which was formed solely to create and launch ApeCoin.
You can learn more by reading nft now’s full article on the subject here, but that’s just the basics of ApeCoin. As a cryptocurrency created for the benefit of BAYC universe residents and NFT holders, ApeCoin is nothing less than the lifeblood of the BAYC ecosystem. And now those within the BAYC ecosystem can lock their $APE into a smart contract and reap benefits over time through effort.
What is staking?
Crypto staking has been an integral part of the blockchain ecosystem for years. In its most basic form, it can be thought of as a kind of decentralized, high-yield savings account. With a general savings account, bank members can lock up their money and receive interest on the balance over time. During this period, the banks often use the members’ locked-up savings to lend to others, so that the bank always has sufficient liquidity for use by the members.
The stake is essentially the same and asks users to unlock their token holdings to be used for liquidity to receive interest over time. A big difference between traditional savings and token staking (other than that one is crypto/blockchain-based and one is not) is that the interest rates for strike is often much higher than for bank savings. While this is common knowledge to those who have dabbled in decentralized finance (DeFi), general Web3 enthusiasts may be shocked to learn that while banks offer an average interest rate of 0.19 percent on savings accounts, even the lowest level of ApeCoin players earn approx. 3.83 percent in a single year.
How to Stake ApeCoin
So how do you stake ApeCoin and how do you start accumulating interest on your staked tokens? First, let’s get the most important information out of the way. Just rely on information from the official ApeCoin, Yuga Labsor Bored Ape Yacht Club Twitter accounts. Likewise, only stake ApeCoin via ApeStake.io, or with trusted centralized exchanges like Binance that have been verified through official ApeCoin channels. These channels include the channels of prominent blockchain infrastructure company Horizen Labs, which is responsible for building the ApeCoin staking system.
Starting December 5th, $APE holders had the opportunity to pre-deposit funds in preparation for the rewards to begin on December 12th. With this period now over, rewards for staked $APE are now active and accruing, and all ApeCoin or BAYC NFT holders can join in staking. Unfortunately, due to regulatory concerns, ApeStake is not available to residents of the US, Canada, North Korea and more (see full list here).
Until secondary staking channels are established with additional centralized exchanges, users of these geoblocked territories will either have to bet using Binance, directly via the open source smart contract, or using a VPN. For those unfamiliar, VPN stands for “virtual private network.” A VPN works to protect users’ online activity and privacy by hiding their true IP address and creating a secure, encrypted tunnel to access the internet. By and large, using a VPN to engage with stakes on ApeStake.io has been most popular solution of users in the United States and Canada.
Please note that this is not legal advice.
But once a user has gained access to ApeStake, staking is as simple as connecting to a software wallet and validating a transaction. But while the benefits of ApeCoin stakes can be significant, they are not created equal in the BAYC universe. Depending on how much $APE you have and whether you own a Bored Ape NFT (or Kennel Club Dog or Mutant Ape), your benefits can vary greatly.
ApeCoin Stake Rewards
When staking $APE, users must decide which pool to allocate the holding to. To begin with, there are four primary stake pools, available to those with either BAYC (or related) NFTs and $APE tokens. During the first staking year, $100 million of APE will be released across staking pools as rewards. This is how it looks distributed:
- $APE stake pool: 30,000,000 $APE tokens
- BAYC Staking Pool: 47,105,000 $APE tokens
- MAYC Staking Pool: 19,060,000 $APE tokens
- BAKC Staking Pool: 3,835,000 $APE tokens
While staking $APE directly is relatively easy, those hoping to stake their BAYC or related NFTs must take part in a commitment process beforehand. To complete this process, a holder must own the NFT(s) at the time of staking, commit the NFT(s) using $APE, and designate their linked pool if applicable. It might as well be noted that whether you are staking an NFT or just straight ApeCoin, you need $APE to engage in the staking system.
It is also incredibly important to note that if a BAYC NFT holder sells their NFT while it is committed, they will lose their entire $APE stake. ApeCoin strongly recommends that users liquidate their NFTs before selling, saying that users should “consider a BAYC or MAYC [NFT] like a box holding $APE. If you sell the box, the new owner gets the box plus all its contents.
All in all, the most important takeaway for those looking to stake their tokens is that knowledge is power. Always triple check the source of information and the websites/services you use. To learn more about ApeCoin staking, including how to keep your assets safe in the process, visit the official ApeCoin website here, as well as ApeStake.io to get started.
