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 findings suggest that 53.59% of ApeCoin participants prefer to stay on Ethereum in the medium-term future. This, based on 7.1 million APE tokens cast during a six-day snapshot 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 giving concerns
The “AIP-41: Keep ApeCoin within the Ethereum ecosystem” ApeCoin improvement proposal (AIP) was written by BAYC 2491, also known as ASEC. It was inspired by the turbulent Otherdeed mint and Yuga Labs’ reaction.
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 set on staying on Ethereum for some 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 primarily stored on Ethereum. This is why AIP-41 passionately advocated against the migration from Ethereum 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 proposition received 3.8 million votes in favor and 3.3 million votes against, for a 53.59% split. This result is not final and can be reconsidered by submitting fresh 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 transitioning away from the Ethereum blockchain. And, a future AIP might be used to make such a transition to scale to an 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 panic selling on 12 May subsided, ApeCoin hit a swing low of $4.93. Buyers jumped in for a brief while as a result of the severely oversold zone, igniting a 104% recovery surge 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 smashed through the range’s midpoint at $7.37, turning it into a resistance level. This action prompted consolidation, which resulted in the creation of a new support level at $6.01. This was only violated on 8 June.
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.