Yuga NFT players may lose all ApeCoin rewards if they sell BAYC, MAYC or BAKC – CryptoMode
Bringing more utility to NFTs and cryptoassets may have some unexpected consequences. Users who stake their Yuga assets – NFTs from BAYC, MAYC and BAKC – can earn ApeCoin returns. But if they sell that stake NFT, they will also lose the associated ApeCoin if they are not careful.
Remove your Yuga NFTs before selling
It’s commendable to see Yuga Labs bring betting functionality to its flagship NFT collections. Bored Ape Yacht Club, Mutant Ape Yacht Club and Bored Ape Kennel Club holders have the option to stake their non-fungible tokens through dedicated smart contracts. In exchange for doing so, they will earn ApeCoin tokens, which are still considered valuable. Also, $APE is crucial in Yuga Labs’ metaverse plans.
Many users are engaging in betting these NFTs today. There is a good reason to do so, as these collections tend to retain their value well. Moreover, some expect even higher prices for these non-fungible tokens. Earning some $APE on the site without much effort will always appeal to speculators. Passive income is certainly possible in cryptocurrency, but it also comes with new responsibilities.
As pointed out by OKHotShot, some people will lose ApeCoin. Not because of smart contract bugs, but because they are selling their Yuga NFTs without claiming $APE first. Transferring ownership of these NFTs enables the new owner to claim the ApeCoin balance and quickly resell the NFT. The example below shows how a person earned $27,000 in $APE and then repaid their loan to buy BAYC NFT. That is a healthy profit and a solid NFT to hold.
Here you can see a buyer taking advantage of this
• borrower 82E
• buys BAYC 1633
• requires $27ki ApeCoin
• exchange ApeCoin for 19.9 wETH
• repays 82E loans pic.twitter.com/22Rl3CouzO— OKHotshot (@NFTherder) 6 December 2022
What is remarkable is how transparency can be a downfall for this venture. More specifically, the ApeStake website lists all addresses and their current earnings. Matching these NFTs with available listings makes it easy to identify a new “tag” and take their ApeCoin from them. Also, the users who bet NFT are not informed about losing the $APE claim when they sell. It’s a huge oversight by Yuga Labs, but one that should be easy to fix.
Pay more attention
One could argue that the problem is native to Yuga Labs and how their smart contracts are created. Additionally, the ease with which Yuga NFTs can be found and their associated stake value makes this “arbitrage” quite accessible. However, users also play a role in these proceedings. If assets are staked – NFTs or otherwise – it makes sense to deposit all proceeds before a sale. However, it can be pointed out much better.
Unfortunately, those who have already lost $APE due to this “arb” will be out of luck. It seems unlikely that Yuga Labs will refund them, as it will further inflate the ApeCoin supply. However, there must be some action before things get further out of hand.
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