GM DOers! 😎
After a fierce battle between Optimism, Polygon, zkSync and Arbitrum, we finally have a winner for the L2 upon which the ApeChain will be built. 🙈
Yuga Labs, like many other developers in the $APE ecosystem, is excited about what it can build on ApeChain.
1,144
With over 50% of the votes, ApeCoin holders showed their clear preference for Arbitrum. 🥳
The remaining votes went to Polygon (32.5%), A-Team: Optimism (11%) and zkSync (6%).
Arbitrum will provide its tech stack (called Arbitrum Orbit), so that ApeChain can be built as a so-called Layer 3, on top of Arbitrum One (the L2).
This setup enables ApeCoin DAO to build a chain that provides extremely fast settlements at insanely low costs for the community members.
Today, I’ll explain:
What ApeChain is 🐵
Why it makes sense to build on Arbitrum 🔵
Why this is a big win for Arbitrum’s tech stack 💪
Let’s get it. ⏬
What is ApeChain? 🐵
The ApeCoin DAO is a community consisting of 145k token holders, making decisions on the future of the ApeCoin token – $APE.
$APE is Yuga Labs’ ecosystem token that was airdropped to holders in March 2022. Since then, the token has already been integrated into various Yuga games such as Dookey Dash and Legends of the Mara.
Furthermore, brands like Gucci accept $APE as a form of payment.
The problem? $APE is currently on the Ethereum mainnet, which is like using a Brinks truck to carry your wallet when you go to buy a pair of Gucci shoes – very expensive and inefficient.
ApeCoin DAO’s ultimate goal is to integrate $APE into a wide variety of games and gaming ecosystems.
For this to make sense, transactions in $APE need to cost pennies at the most.
To solve this, the ApeCoin DAO decided to build ApeChain. And it’s no surprise they decided to do this on Arbitrum Orbit, which is one of the leading L2 tech stacks.
There’s 4 reasons why they chose Arbitrum:
1. $APE – Gas and Governance Token for ApeChain
Typically, Ethereum L2 networks are forced to pay gas fees in $ETH. That’s not the case here.
ApeChain will use a technology called AnyTrust with $APE as its gas token, which means it doesn't have to sell $APE for $ETH to pay for transactions.
AnyTrust also makes creating new blocks cheaper and helps keep $APE useful for things like gas, staking, and voting on decisions, all while keeping it secure and connected to Ethereum.
2. ApeCoin DAO Customized Fee
In the future, ApeCoin DAO can add a fee to transactions on ApeChain. This could create a healthy income stream.
For example, charging $0.02 extra per transaction could bring in over $7 million a year for ApeCoin DAO, if there are 1 million transactions daily.
1 million transactions may seem like a lot but not when your partner is Yuga Labs which has billions in their war chest and a CEO that is former President of Activision Blizzard.
3. Low Fees for Users
One of the biggest hurdles for blockchain game developers is the impact of gas fees. Arbitrum Nova and AnyTrust were developed specifically with that pain point in mind.
By using a DAC, AnyTrust chains are able to deliver gas 10x less expensive than traditional rollups, making transactions less than a cent for users.
4. Customizability
ApeCoin DAO will have the ability to customize the codebase as it sees fit.
Example: ApeChain could work with a technology partner to implement hardcoded creator royalty enforcement.
This is something that Rarible’s RARIChain, which is also built on Arbitrum Orbit, did recently.
All of this is super bullish for Arbitrum. Let me tell you why. 👇
The Latest in Crypto & Web3 🗞
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Listen to our Rollup episode to get caught up on all the latest news on your favorite podcast platform.
Wrapping Up – Bullish on Arbitrum 🐂
ApeChain will be deployed as an Arbitrum Orbit chain on top of Arbitrum One.
Introduced earlier this year, Arbitrum Orbit has quickly expanded, with four chains already live, more than 15 chains announced publicly, and over 30 in the works.
This is bullish for Arbitrum DAO, as they own and govern Arbitrum One and Arbitrum Nova, which are the L2 chains that an Arbitrum Orbit chain can settle on.
In return for using the Arbitrum Orbit tech stack, the DAO charges a 10% fee on revenues to ApeChain and the other custom chains that are built on top of it.
This revenue flows back to the DAO, which turns around and spends that money on grant programs which attract more builders to Arbitrum which brings more users and leads to the price of $ARB to rise.
In comparison, Optimism charges 15% for blockchains built on the OP Stack such as Base, Zora, Mode and others. Over time I’m pretty sure these fees will end up being the same.
The amount of revenue Arbitrum Orbit and OP Tech Stacks will drive for their respective DAOs and foundations is going to be enormous.
Right now there’s only 30 projects on Arbitrum Orbit.
Imagine when there’s thousands? 🤯
Custom chains are mostly developed by ecosystems right now. In the future when there are hundreds of millions of users onchain many apps will need their own chain.
Not to mention, building your own custom chain will get easier and easier.
So, there is a massive opportunity for whoever becomes the leading tech stack for custom chains.
That’s why the head boss of Polygon, Offchain Labs (Arbitrum), Matter Labs (ZkSync) and Machi Big Brother (head of A-Team building on Optimism) showed up to a Twitter space last week.
ApeChain Debate in 1 hour! Catch:
@MachiBigBrother of A-Team
@0xmarcb, CEO of @0xPolygon
@sgoldfed, CEO of @OffchainLabs
@CashBowie, Senior VP at @the_matter_labs
and more...
Don't miss it
Hear from @MachiBigBrother of A-Team, @0xmarcb, CEO of @0xPolygon, @sgoldfed, CEO off @OffchainLabs, & @CashBowie, Senior VP of @the_matter_labs as they discuss ApeChain proposals built on @Arbitrum, @Optimism, @0xPolygon & @zksync
The only other time you would see these people in the same room would be at a conference.
Clearly, Steven Goldfeder, Co-Founder of Arbitrum, impressed the 1300 people in attendance.
Well done, Steven. You continue to impress us as well! 🫡
P.S.- I think the L2 narrative will be a main driver in the bull market – to prepare, I suggest you take 10 minutes of your time to read our detailed tokenomics report on $ARB & $OP.
Give it a read & thank us later. 🙏
Thanks for reading. And remember, you're strong, you’re powerful, you’re alpha! ❤
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Disclaimer: This article is for informational purposes only and not financial advice. Conduct your own research and consult a financial advisor before making investment decisions or taking any action based on the content.
