On 2 May, ApeCoin DAO, a governance system that protects ApeCoin holders’ democratic rights — a digital asset linked to the Bored Ape Yacht Club ecosystem — published an official proposal. It discussed whether the asset should stay on Ethereum, migrate to a layer-2 alternative, or consider chain migration.
The final results suggest that 53.59% of ApeCoin participants prefer to stay on Ethereum in the medium term. This, based on 7.1 million APE tokens launched during a six-day instant voting period.
Votes dropped from a high level of support (those in favor of ApeCoin DAO being on Ethereum) to fewer than 60%. At press time, 45.10% of ApeCoin holders opposed the plan to stay on Ethereum exclusively rather than migrate to other networks.
Ethereum gas fees cause concern
The ApeCoin Improvement Proposal (AIP) “AIP-41: Retaining ApeCoin in the Ethereum Ecosystem” was authored by BAYC 2491, also known as ASEC. It was inspired by the turbulent mint Otherdeed and the reaction from Yuga Labs.
Following the launch of the Otherside NFTs, Yuga Labs triggered a network outage on Ethereum, with sky-high gas fees hitting $175 million. This prompted the BAYC developer to imply that ApeCoin would need to relocate to its chain.
The community, on the other hand, is determined to stay on Ethereum for valid reasons, as well as the fact that the DAO does not want to be separated from the profitable Yuga Labs. Especially since its NFTs are mainly stored on Ethereum. This is why AIP-41 passionately argued against Ethereum migration saying –
“Migrating to a different chain is a costly, risky, and complex endeavour with many moving parts that, if not thoughtfully considered, may result in catastrophic loss, or at worst, abandonment by Yuga Labs and other entities that would otherwise (be meaningful) to ApeCoin. We the ApeCoin DAO believe that, at least for the time being, ApeCoin should remain within the Ethereum ecosystem, and not migrate elsewhere to an L1 chain or sidechain not secured by Ethereum.”
The proposal received 3.8 million votes in favor and 3.3 million votes against, for a distribution of 53.59%. This result is not final and can be reconsidered by submitting new suggestions within a three-month grace period.
Other options for ApeCoin
While the proposal just asks for votes to keep ApeCoin on Ethereum, it does not rule out the option of moving to an Ethereum layer two network. This would still benefit from the mainnet’s security.
According to the proposal, few projects succeed in moving away from the Ethereum blockchain. And, a future AIP could be used to make such a transition to a level l2.
While the ApeCoin community is still in limbo, Avalanche recommended last month that ApeCoin DAO be added as a subnet to their blockchain. While Avalanche subnets promised infinite scalability as well as other advantages like decreased gas rates and transaction throughput, Ethereum’s inertia reigns supreme.
After the May 12 panic selling subsided, ApeCoin hit a low of $4.93. Buyers intervened for a brief moment due to the severe oversold zone, triggering a 104% rally to $9.82.
This swing from $4.93 to $9.82 became a trading range that ApeCoin has been in for more than three weeks. APE has consistently posted lower highs during this consolidation, with no bulls to counter the bears’ free rein.
As a result, APE broke through the midpoint of the range at $7.37, turning it into a resistance level. This action led to a consolidation, which resulted in the creation of a new support level at $6.01. This was not breached until June 8.
Now that the price of ApeCoin is hovering below the aforementioned level, it is expected to go down and sweep the range bottom at $4.93 before any buyers enter the market. As a result, investors could expect APE to fall by another 15% in the following days.
