Fact or fiction? Did ApeCoin (APE) really drop by 80% since launch?

ApeCoin (APE), the governance token of the well-known Bored Ape Yacht Membership (BAYC) NFT mission was airdropped to BAYC and Mutant Ape Yacht Membership (MAYC) house owners at 8.30 am EST on March 17 and solely eight hours after APE grew to become tradable within the open market, it has already jumped to the a hundred and tenth most traded token ranked by CoinGecko, totaling $900 million in buying and selling quantity throughout all tracked platforms.

As one would anticipate, there have been some risky worth actions minutes after the airdrop and headlines present the worth of APE dropping 80% since its launch. This raises the query of whether or not the unusual BAYC and MAYC proprietor might have bought APE at $40 as an alternative of $14, which it’s buying and selling for on the time of publishing.

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Let’s check out APE’s worth minutes after the airdrop was claimed and the token listed on Binance, FTX, Gate and SushiSwap to evaluate the dimensions of the worth discrepancies throughout the preliminary worth discovery intervals.

The spot worth chart above reveals that on the FTX one-minute chart, APE was buying and selling as excessive as $40 within the second minute however the perpetual worth chart beneath reveals that within the first minute, it solely went as much as as excessive as $15 on the highest level.

Binance reveals a excessive of $28 on the minute of the airdrop from the one-minute chart whereas Gate reveals an unbelievably excessive $214 on the identical minute.

Whereas the worth of newly listed tokens are sometimes risky throughout the preliminary worth discovery intervals and it’s tough to know if transactions really occurred at these ranges, the volumes on these minute candles can provide a very good indication of what the precise worth of APE was proper after the airdrop.

The buying and selling quantity of Binance is the best among the many three platforms used on this article and the reader ought to know that APE can also be traded on different platforms. Within the first 5 minutes, Binance’s whole buying and selling quantity was $42 million, whereas FTX perpetual’s buying and selling quantity is in whole $18 million and the spot quantity is $6 million. Gate solely has $1,665 buying and selling quantity on the candle, which reveals the best worth of $214 and solely $43,000 whole quantity within the first 5 minutes.

So it’s clear to see that the extra dependable worth of APE minutes after the airdrop is from Binance, which is round $28 and occurred on the minute of the airdrop. It’s not unusual to see a big drop in worth within the newly launched tokens within the early buying and selling hours, because it occurred to many comparable tokens. The query is whether or not an unusual non-tech savvy proprietor might have bought the token within the first 5 minutes to keep away from such a drop. The reply is nearly actually no.

First, the gasoline worth for minting APE skyrocketed to 10 occasions (or much more) than the conventional worth proper after the airdrop. Until one is keen to take nice dangers bidding up the gasoline worth to get the APE forward of everybody else (and keep in mind, at this level, the APE worth might be not discoverable wherever), it is rather tough to even declare APE inside one minute.

Second, as soon as APE is within the recipient’s Ethereum pockets, it must be transferred to centralized exchanges (CEXs) akin to Binance and FTX to be bought. This additionally takes a while, relying on the visitors on the chain on the time. The quickest manner can be to make use of a decentralized change (DEX) by merely connecting the Ethereum pockets and swapping APE for an additional token.

Nevertheless, one attention-grabbing remark is that APE’s liquidity within the DEX is just not as a lot as within the CEX. The TVL on the time of writing on Uniswap is comparatively small for APE/USDC and APE/DAI swimming pools, and the liquidity on SushiSwap could be very low — the entire worth locked (TVL) within the APE/USDT pool is barely $67,000.

BAYC house owners can declare about 10,000 APE per NFT and MAYC house owners can declare about 2,000 APE per NFT. This implies solely 80 BAYC house owners will be capable to swap your complete airdrop on the worth of $28, given the $45 million TVL of APE/USDC on Uniswap.

No BAYC house owners can swap everything of the airdrop on SushiSwap for USDT because the TVL of $67,000 can not cowl 10,000 APE swaps per BAYC or the two,000 APE per MAYC on the worth of $28.

Given the shortage of liquidity within the DEX and the time it takes to switch APE to a CEX akin to Binance, it’s virtually unimaginable for an unusual proprietor to money out within the first one to 2 minutes on the prime. It appears solely tech-savvy house owners (or bots) who know find out how to work together with the blockchain with code immediately can execute these kind of transactions in such a brief time period.

Even when the worth of $40 is true and APE did drop 80% from there to $8, solely only a few have been capable of promote APE at that worth. A extra affordable manner to take a look at the preliminary worth of a newly launched token is to make use of the amount of USD traded inside the minute divided by the amount of the token. Within the case of Binance within the first minute, the entire USDT quantity is nineteen.66 million and the entire APE quantity is 2.15 million, which supplies a mean worth of $9.14 within the first minute for APE.

Utilizing this fairer manner to take a look at APE’s worth instantly after the launch, the token really solely dropped 12% since its peak, which isn’t overly dramatic, given the present bearish surroundings. When buyers learn headlines such because the token worth falls 80% on its first day subsequent time, be certain to take it with a grain of salt.

With Yuga Lab’s future plans to make use of APE for all its services, and the collaboration with Animoca Manufacturers to construct blockchain NFT video games, the longer term outlook for APE and the Web3 financial system constructed round NFTs might be very attention-grabbing.

The views and opinions expressed listed here are solely these of the writer and don’t essentially mirror the views of Cointelegraph.com. Each funding and buying and selling transfer entails threat, it is best to conduct your individual analysis when making a call.