ApeChain, the Yuga Labs<\/a>-backed Layer 3 network built for the ApeCoin<\/a> ecosystem, celebrated its first anniversary last month. After a brief rise in on-chain value and activity, ApeChain has been mostly in decline since its launch, while its native token ApeCoin (APE<\/a>) has also struggled to regain its NFT-era highs. <\/p>\n When it launched at ApeFest in Hong Kong on Oct. 20 last year, the project promised a variety of features such as fast transactions, non-fungible token (NFT)<\/a> staking, and multiple utility-cases for APE, which was launched two years prior to the network’s debut.<\/p>\n At first, the launch of ApeChain \u2014 which was initially proposed to the ApeCoin DAO by a team including leads at Horizen Labs, Arbitrum developer Offchain Labs, and the Arbitrum Foundation \u2014 sparked<\/a> a surge in activity<\/a> as the network was supported by \u201cBanana Bill,\u201d an initiative with over 100 million APE tokens aimed at incentivizing developers and apps.<\/p>\n And for a brief period of time, those efforts indeed paid off as the network saw a surge in total value locked (TVL), hitting a peak of $33.8 million in December 2024, according to data from DefiLlama<\/a>. <\/p>\n But TVL has mostly been in steady decline since then, falling as low as $6.7 million at the time of writing \u2014 its lowest level ever, except for a brief drop in November of last year.<\/p>\n Also per DefiLlama, only three of the nearly 30 protocols on ApeChain are making any revenue, and two of them made less than $100 in the past 24 hours.<\/p>\n Since ApeChain\u2019s native token APE launched, its price has also fallen over 95%, trading at $0.36 at press time, according to The Defiant\u2019s price page.<\/p>\n At its launch in March 2022, APE tokenomics included allocations to its DAO treasury and launch contributors, as well as scheduled unlock allocations for founders and Yuga Labs, which left meaningful supply earmarked well before the launch of ApeChain.<\/p>\n By the time the ApeChain network debuted last year, over 495 million APE tokens were already unlocked for the ApeCoin DAO\u2019s Ecosystem Fund, while founders had 42.22 million APE, launch contributors 115.2 million, Yuga Labs 79.17 million APE, and the Jane Goodall Legacy Foundation a more modest 5.28 million and, according to DefiLlama<\/a>. <\/p>\n For context, at that time, ApeCoin was priced around $0.87, giving it a market cap of $628.8 million.<\/p>\n But one year later, the APE price had dropped by over 50%, with market cap falling to around $325 million at the time of writing. Meanwhile, the amount of unlocked tokens has grown and allocations have increased across the board.<\/p>\n The Ecosystem Fund allocation is up 25% to 620 million APE, the founders share has grown nearly 90% to 80 million APE, launch contributors\u2019 allocation grew 21% to 140 million, the Jane Goodall Legacy Foundation nearly doubled to 10 million APE, and Yuga Labs\u2019 share increased 88% to 150 million APE.<\/p>\n Nicolas Lallement, co-founder of NFT analytics site NFT Price Floor, said that token unlocks and ApeCoin\u2019s early tokenomics \u201care only one part of the story behind the TVL decline.\u201d<\/p>\n \u201cWhen you look at crypto more broadly, power laws are always in play, meaning a few dominant players capture most of the value,\u201d Lallement told The Defiant.<\/p>\n \u201cFor example, Aave now represents over 80% of Ethereum\u2019s lending market (if we look across chains, they have more TVL than the next 30 lending protocols combined). The same concentration is happening across L2s, where Base and Arbitrum are far ahead of other chains. So in that context, ApeChain\u2019s declining TVL isn\u2019t an anomaly; it\u2019s part of a broader pattern where capital consolidates around the biggest ecosystems.\u201d<\/p>\n He added that ApeChain\u2019s drop was a mix of fading hype, token unlocks, and a sluggish NFT market<\/a> that \u201chasn\u2019t seen a proper bull run this cycle.\u201d Even in DeFi, Lallement noted, adoption has grown but token performance has lagged, largely because Ethereum itself underperformed<\/a> until recently<\/a>.<\/p>\n \u201cAnd ApeChain isn\u2019t alone,\u201d he continued in comments to The Defiant, adding: \u201cAbstract also peaked around August and has since seen its TVL decline despite Luca Netz [the CEO of the NFT project Pudgy Penguins] efforts.\u201d<\/p>\n Another important element in ApeChain\u2019s decline, according to Lallement, is its governance structure. He said that operating as a DAO in its early stages probably wasn\u2019t optimal, as \u201cmost DAOs have struggled to execute efficiently.\u201d<\/p>\n The initial proposal for ApeChain stated its aim is “to house the next generation of consumer-facing applications and games,” a goal requiring \u201cstrong business development, rapid adaptation to market shifts, and active incentive design,\u201d Lallement noted.<\/p>\n \u201cThat\u2019s why I think the proposed transition from ApeChain DAO to ApeCo is the right move,\u201d he said, referencing a proposal<\/a> from June to transfer governance and operations from the DAO to an entity created by Yuga Labs, with the stated goal being \u201cto supercharge the APE ecosystem by supporting high-quality builders and reinforcing three core pillars: ApeChain, Bored Ape Yacht Club, and Otherside.\u201d<\/p>\n \u201cThere will be time to decentralize later, once the ecosystem is stronger,\u201d Lallement added.<\/p>\n Indeed, later that month, ApeCoin holders voted<\/a> to dissolve the ApeCoin DAO and handed over control of the ecosystem to ApeCo, established by Yuga Labs. Despite the inherent centralization in the move, an overwhelming 99.66% of voters supported it. <\/p>\n By that time, some high-profile figures, like Alexis Ohanian, who had been on the DAO\u2019s Special Council, had already stepped away as governance powers shifted to other community members.<\/p>\n Meanwhile, ApeChain TVL and ApeCoin\u2019s price have remained mostly flat since the voting ended in late June, before declining further last month.<\/p>\n The broader Ape ecosystem and the price of APE also failed to recover after news in March that the U.S. Securities and Exchange Commission had ended<\/a> its long-running probe to determine whether ApeCoin and Bored Ape Yacht Club (BAYC) constituted securities. The SEC\u2019s decision to end the investigation without enforcement removed major regulatory uncertainty that had loomed over the project since October 2022, just seven months after APE was launched. <\/p>\n BAYC, Yuga Labs\u2019 flagship NFT collection at the heart of the Ape ecosystem, remains the second-largest NFT collection<\/a> after CryptoPunks, with a market capitalization of 58,990 ETH, or over $206 million. The collection\u2019s price floor \u2014 the lowest market price of an NFT in the collection \u2014 has stayed around 10-13 ETH since the ApeChain debut, declining in recent months to 5.9 ETH at the time of writing, per data<\/a> from NFT Price Floor.<\/p>\n This May, Yuga Labs sold<\/a> the intellectual property of CryptoPunks, one of the sector\u2019s oldest collections, originally launched by Larva Labs, who sold the IP to Yuga Labs in 2022. Later that month, crypto gaming startup Orange Cap Games acquired<\/a> the IP of another Yuga Labs collection, Moonbirds.<\/p>\n As Lallement explained, Yuga Labs\u2019 focus has now shifted to a longer-term strategy, adding that \u201cthey\u2019ve streamlined by selling non-core IP assets like Meebits, CryptoPunks, and HV-MTL, and are now doubling down on their original IP and metaverse ambitions.\u201d<\/p>\n He suggested that the right market setup \u2014 such as ETH breaking new highs, established DeFi assets pumping, and a wealth effect spilling over into NFTs \u2014 could create \u201cthe perfect storm for a NFT revival.\u201d<\/p>\n The Defiant reached out to Yuga Labs for commentary on the Ape ecosystem and the company\u2019s broader plans, but didn\u2019t hear back by press time.<\/p>\n \u201cWe\u2019re in touch with many communities,\u201d NFT Price Floor\u2019s Lallement said, continuing, \u201cand one thing ApeChain has been relatively successful at is serving as a launchpad for new NFT collections with lower entry prices to attract and onboard new users.\u201d<\/p>\n But with markets struggling<\/a> after the Oct. 10 crash, ETH back below $4,000, and NFT sale volumes down<\/a> over 44% in the past month, an NFT comeback doesn’t appear to be in the cards anytime soon. <\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" Just over a year after its launch, ApeChain\u2019s TVL has dropped over 80%, and only three of its nearly 30 protocols generate any revenue. ApeChain, the Yuga Labs-backed Layer 3 network built for the ApeCoin ecosystem, celebrated its first anniversary last month. After a brief rise in on-chain value and activity, ApeChain has been mostly […]<\/p>\n","protected":false},"author":2,"featured_media":410288,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[274,273,272,244,266,271,268,270,269,267],"class_list":["post-410287","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-de-fi","tag-crypto-finance","tag-decentralized-finance","tag-liquidity","tag-metamask","tag-pancake","tag-slippage","tag-sushiswap","tag-tronlink","tag-trust-wallet","tag-uniswap"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/410287","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=410287"}],"version-history":[{"count":1,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/410287\/revisions"}],"predecessor-version":[{"id":410289,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/410287\/revisions\/410289"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/410288"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=410287"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=410287"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=410287"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"the-defiant\"](\"https:\/\/thedefiant.io\/_next\/image?url=https%3A%2F%2Fcdn.thedefiant.io%2Fpasted-1762279295795-png-85fa5ea4-b446-4353-b5f3-ab813d7cb59c.png&w=3840&q=100\"\/)
![\"the-defiant\"](\"https:\/\/thedefiant.io\/_next\/image?url=https%3A%2F%2Fcdn.thedefiant.io%2Fpasted-1762279300952-png-bc0da08b-1801-4dd5-9faa-03bec24f876f.png&w=3840&q=100\"\/)
Token Before Network<\/h2>\n
![\"the-defiant\"](\"https:\/\/thedefiant.io\/_next\/image?url=https%3A%2F%2Fcdn.thedefiant.io%2Fpasted-1762279305198-png-8bdd6d46-16ff-4cda-ac46-67e28a12f53d.png&w=3840&q=100\"\/)
Capital Consolidation<\/h2>\n
Governance Reset<\/h2>\n
BAYC and the NFT Sector<\/h2>\n
![\"the-defiant\"](\"https:\/\/thedefiant.io\/_next\/image?url=https%3A%2F%2Fcdn.thedefiant.io%2Fpasted-1762279309680-png-6727ebb2-a82f-43a8-a0f2-fb9a0042bbda.png&w=3840&q=100\"\/)