As investors continue to flock to the metaverse, it is perhaps not a surprise that ApeCoin (APE-USD) has become one of the most popular cryptos. The token underlies the Bored Ape Yacht Club non-fungible token (NFT) collection. Thanks to this connection, it’s surged in the first two months of existence. However, this popularity also means that APE receives great scrutiny when it doesn’t deliver. This week, the crypto is facing this dynamic again, but developers are taking steps to remedy the situation.
This week’s news traces back to Bored Ape developer Yuga Labs’ Otherside metaverse. In late March, Yuga announced its plans to release a metaverse experience tied to the Bored Ape ecosystem. In conjunction with the Otherside trailer, Yuga announced plans to team up with ApeCoin developers to make APE the official currency of the space.
The partnership is an obvious match. After all, APE cropped up as a direct result of the Bored Ape collection’s success. So, adopting it as a native token makes perfect sense. As a native Bored Ape token as well as a governance token, holding APE is a crucial aspect of interacting with Yuga Labs’ many products.
At the end of April, then, Yuga Labs announced plans to auction plots of land to users in a Dutch-style auction. This announcement triggered a fast surge in APE prices; users sought to broaden their holdings in order to increase their chances of securing land. In a last-minute decision, though, Yuga ditched the Dutch auction in favor of a regular, flat-rate land sale.
ApeCoin Responds to Sale Criticism With Open Mind Toward APE Chain
Hot off of some big gains and high volume, the weekend sale was a roaring success on paper. Yuga Labs ended up selling $561 million worth of its land, all using ApeCoin. However, some issues plagued the sale and ended up putting both Yuga Labs and ApeCoin in the hot seat.
Investors largely have complained about the long and expensive processing of transactions. Ethereum (ETH-USD) transaction volume spiked significantly due to the sale, and with the infamously low scalability of the network, caused gas fees to spike. The fees spiked so high, in fact, that some users were paying thousands of dollars just to process a single transaction.
The fees have led many users to criticize the project — so much so that ApeCoin leaders are responding with a plan just days after the sale was completed. ApeCoin board and Animoca Brands Chairman Yat Siu says that developers had never previously considered a dedicated APE chain before. But, he says developers would be open to deploying such a project given a proposal with majority community support behind it.
Could a New Polygon Integration Improve Scalability?
Another piece of big news from the APE camp could point toward a different approach to scaling. ApeCoin announced it will be teaming up with layer-2 scaling player Polygon (MATIC-USD), an event that might set the stage for a new transaction layer.
By integrating with Polygon, APE crypto will be brought to the 19,000-plus dapps on the Polygon network. The partnership vastly ups the usability of the crypto, allowing it to be used as payment across the whole network. This is great news for APE holders who want more use cases for their crypto, but the partnership has even bigger implications.
Polygon’s chains are a viable and quite popular way to prevent the congestion seen during the Otherside sale. Polygon can support 65,000 transactions per second, making it easily capable of handling the traffic. Taking transactions to Polygon keeps the Ethereum chain from being bogged down by thousands of transactions at a time. More importantly, transaction fees come in at just a few cents, making the integration infinitely more affordable than Ethereum.
It’s certainly worth noting that ApeCoin developers can’t just go off and implement sidechain integrations without community approval. As a decentralized autonomous organization (DAO), it is up to the community to decide on such an upgrade. Someone, be it a user or the Polygon network itself, must draft a proposal on the matter first. Then, the proposal must undergo a voting period. It’s an often long and arduous process. So, it will be quite interesting to see how ApeCoin developers deal with issues in the near future.
On the date of publication, Brenden Rearick did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
