ApeCoin (APE) sees price drop after NFT sells for Metaverse Otherside

The hype surrounding ApeCoin (APE) and the connected metaverse Otherside has gotten a hit. ApeCoin slips in minus for the third day in a row after Saturday’s chaos at Otherside’s first NFT sale.

Probably no other new project in the crypto year 2022 has been discussed as controversially as ApeCoin (APE): ApeCoin’s stock market debut in mid-March brought APE directly into the top 50 cryptocurrencies with the most capital – although not much was known about possible uses at. the time. The huge attention for ApeCoin stems from the fact that this project is associated with Bored Ape Yacht Club, the most commercially successful NFT collection 2021. But among the investors who jumped on the ApeCoin bandwagon, there are also many losers today . In the last few days of April, the APE traded almost constantly above $ 20, with the price curve topping as high as $ 26. Less than a week later, ApeCoin has fallen back to around $ 15 and has had to accept a real price drop.

In addition to negative trends in the overall crypto market, it is the NFTs at ApeCoin that are causing disillusionment. You should know that ApeCoin should become the original currency for a planned Metaverse Otherside. Otherside was mysteriously announced in late March, and this metaverse started on Saturday. It was announced in advance that there would be virtual properties that Otherside could auction in the form of NFTs. To be able to strike, many interested people filled up with APE. But just one day before the auction, the rules were changed and a fixed price of 305 ApeCoin per NFT was set. That’s not all: When Otherside NFT sales went live, demand was overwhelming. This then led to those who were willing to buy being willing to pay awful Ethereum transaction fees. These were needed in addition to the actual APE price tag because ApeCoin is an ERC-20 token and the NFTs are also based on the Ethereum standard.

Ethereum had to cope with the ApeCoin moment

Ultra Sound data shows how nearly 56,000 ETH Ethereum transaction fees for Burning came together in connection with Apecoin and Otherside. Volume was several times larger than normal trading days for Ethereum, with the majority of transaction fees mostly coming from the NFT marketplace OpenSea and the decentralized crypto exchange Uniswap. In the hours of NFT sales for Otherside with ApecCoin, Ethereum transaction fees of up to $ 10,000 had to be temporarily taken into account – this momentum put all other activities in the Ethereum ecosystem on hold due to inefficiency.

In retrospect, the Ethereum community still finds something good about the situation: as transaction fees are partially automatically destroyed (“burned”), they also have a deflationary effect on ETH. This principle has been applicable to Ethereum since the London update of EIP-1559 from August 2021. So you can get something positive from ETH, equivalent to almost 160 million US dollars, which has now been taken off the market by ApeCoin and Otherside, with a deflation effect for Ethereum.

Conclusion: Stormy times for ApeCoin

Among the so-called Metaverse tokens, ApeCoin has so far been able to defend its top position ahead of Decentraland (MANA) and Sandbox (SAND) despite the price drop. But shortly after the launch of ApeCoin, there was serious criticism of the APE concept, which was triggered by distribution mechanisms and autonomy that may have only been pretended. The repercussions of the NFT sale for Otherside should not be apt to classify ApeCoin as solid. On the other hand, the Apecoin / Otherside project is still in its infancy and will still have opportunities to learn from mistakes.

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