What is ApeCoin?
Launched in March 2022, ApeCoin (APE) is a governance and utility token used within the APE ecosystem to empower decentralized community building. ApeCoin is intended to be used as a governance token for voting on proposals to the ApeCoin DAO (Decentralized Autonomous Organization), as a shared currency within the APE ecosystem, as a means of exclusive access to parts of the APE ecosystem, such as a games, merchandise and services, and as a tool that third parties can integrate into services, games or other projects to participate in the APE ecosystem.
ApeCoin is associated with the Bored Apes Yacht Club (BAYC) non-fungible tokens (NFTs). Yuga Labs, the creator of BAYC, and Yuga Labs’ founders received APE tokens when APE was first launched and are therefore members of the ApeCoin DAO. Yuga Labs has adopted APE as the primary token for BAYC projects. Holders of BAYC NFTs also received APE tokens as part of an airdrop when APE was first launched.
ApeCoin was launched and is governed by the ApeCoin DAO, which can field proposals from the ApeCoin community. Only APE token holders are members of the ApeCoin DAO and can vote on proposals. Any decisions made by the DAO are administered by the APE Foundation, which is responsible for the day-to-day administration, bookkeeping and project management of any ApeCoin community proposals. The ApeCoin DAO can elect members of a special council of the APE Foundation, referred to as the DAO’s Board, to oversee the Foundation’s administrators.
On the technical side, ApeCoin is an ERC-20 governance token that operates on the Ethereum (ETH) blockchain. The total supply of APE is fixed at 1 billion tokens. APE’s ERC-20 contract will not allow minting beyond this number, and so this supply should never increase. Moreover, there is also no burning capability, so the supply won’t decrease either.
Unlike the BAYC NFTs, APE tokens are meant to be “fungible” – as with Bitcoin (BTC) or Ethereum (ETH), any one ApeCoin will be worth exactly as much as any other ApeCoin, and you can buy, sell, and trade them freely on any centralized or decentralized exchange that supports the token.
Before trading any crypto assets it is important to understand the risks. This overview is a starting point for you to perform your own research prior to investing in a crypto asset.
No securities regulatory authority or regulator in Canada has evaluated or endorsed the Crypto Contracts or any of the crypto assets made available through the platform.
Wealthsimple has performed an assessment of whether APE can be supported by Wealthsimple’s platform, including whether APE is a security and/or a derivative and is being offered in compliance with securities and derivatives laws.
We evaluated APE based on publicly available information, including (but not limited to):
- The creation, governance, usage and design of APE, including the source code, security and roadmap for growth in the developer community and, if applicable, the background of the developer(s) that first created ApeCoin;
- The supply, demand, maturity, utility and liquidity of APE;
- Material technical risks associated with APE, including any code defects, security breaches and other threats concerning APE and its supporting blockchain (such as the susceptibility to hacking and impact of forking), or the practices and protocols that apply to them;
- Legal and regulatory risks associated with APE, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of APE; and
- Statements made by regulators or securities regulatory authorities in Canada and other jurisdictions regarding whether APE, or generally about whether the type of crypto asset, is a security and/or a derivative.
Wealthsimple monitors ongoing developments related to crypto assets available on its platform for significant changes that may affect Wealthsimple’s original assessment of those assets, including Wealthsimple’s assessment of the application of securities and derivatives laws. Any significant changes relating to APE may result in changes to this Crypto Asset Statement and/or Wealthsimple’s ability to support APE.
Like all other crypto assets, there are some general risks to investing in APE. These include short history risk, volatility risk, liquidity risk, demand risk, forking risk, cryptography risk, regulatory risk, concentration risk, electronic trading risk and cyber security risk. Please review the Wealthsimple Crypto Product Risk Disclosure for additional discussion of general risks associated with the crypto assets made available through the platform.
Additional Risks / Information
In addition to these general risks, APE presents elevated short history risk (having launched March 17th, 2022) and other unique risks, notably potential significant volatility given its vulnerability to public sentiment, short market history, and reliance on the activity of other projects like the demand for NFTs. APE may also be subject to other risks, including regulatory risks, due to the limited adoption of its intended utility to date and the project’s potential dependency on its association with Yuga Labs and the BAYC intellectual property.
We emphasize that this Crypto Asset Statement is not exhaustive of all risks associated with trading APE. Investors should perform their own assessment to determine the appropriate level of risk for their personal circumstances.
Wealthsimple is offering Crypto Contracts in reliance on a prospectus exemption contained in the exemptive relief decision Re Wealthsimple Investments Inc. dated December 18, 2023 (the Decision).
The statutory rights of action for damages and rescission in section 130.1 of the Securities Act (Ontario), and, if applicable, similar statutory rights under securities legislation of other jurisdictions of Canada, do not apply in respect of this Crypto Asset Statement to the extent a Crypto Contract is distributed under the prospectus relief in the Decision.
Last updated: January 1, 2024