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Airdrop

Yuga Labs airdropped APE to holders of the Bored Apes

The owners of NFTs from the Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club (MAYC) collections have been rewarded with an airdrop of ApeCoin (APE) tokens. Each BAYC and MAYC holder received a bit over 10,000 and 2,000 APE tokens respectively, valued around $80,000 and $16,000 on the first day of the airdrop.

APE token will be used to govern ApeCoin DAO, with 15% of its 1 billion total supply being allocated for the holders of BAYC and MAYC NFTs, and 47% of APE reserved for the “DAO treasury and resources”.

The airdrop mechanism didn’t distribute tokens based on a historical snapshot as it often happens in the DeFi space, but it rather relied on the spot state, meaning that a user had to hold the NFT at the time of claim.

Such a mechanism has led to two outcomes:

  • Firstly, the floor price of the BAYC collection has temporary spiked by 13% shortly after the airdrop announcement as buyers were trying to get a hold of NFTs that haven’t been yet used to claim the airdrop.

  • Secondly, NFT vaults became vulnerable to attacks - or arbitrage trades - through the use of flash loans.

In one such incident a user bought a Bored Ape NFT on the OpenSea market for under $300,000 and then used it to construct a complex transaction that rewarded him with $1.1 million worth of ETH. The user was able to buy a large amount of NFTX vault’s tokens utilizing a flash loan with the Bored Ape NFT as a collateral. In the same transaction the user redeemed five BAYC NFTs from the NFTX vault, used them to claim the ApeCoin airdrop, and then returned NFTs back to the vault, sold vault tokens, repaid the loan, and pocketed a profit of almost 400 ETH.

The community has divided whether to classify the incident as an innovative arbitrage trade or an attack that exploited the airdrop-claiming process.

The Bored Ape Yacht Club is one of the most hyped NFT projects with many celebrities purchasing the Bored Apes for hundreds of thousands or sometimes millions of dollars. Earlier in March, Yuga Labs - creators of the BAYC collection - acquired CryptoPunks and Meebits’ intellectual property rights. The co-founder of Ethereum Vitalik Buterin slammed BAYC as “another form of gambling” in his recent TIME Magazine interview.

Legislation

The European Parliament backtracks ban on bitcoin mining

The EU ECON committee has voted against a proposal that could have limited proof-of-work cryptocurrencies in the EU. The provision was part of the EU draft legislation to regulate cryptocurrencies, and many feared that it would be a de-facto ban on bitcoin mining.

Instead, an alternative amendment on proof-of-work has passed, which will add bitcoin mining to the EU sustainable finance taxonomy.

Bitcoin and other cryptocurrencies that use the proof-of-work consensus algorithm to secure the network has been constantly under an attack from regulators around the world in the past few years, especially after the mainstream media added environmental concerns to its anti-crypto narrative alongside with money laundering and terrorist financing.

After China’s crackdown on crypto mining last summer, the US and Kazakhstan became the largest countries by Bitcoin hashrate.

In other news

  • Bitcoin mixing service CoinJoin, which is used by privacy-focused Wasabi Wallet, started blacklisting BTC tied to illegal activity. The blacklisting will only apply to the users of the zkSNACKs coordinator run by the Wasabi Wallet. Users can still choose alternative coordinators to circumvent the restrictions.

  • Instagram is reportedly preparing to add non-fungible tokens (NFTs) to its platform in the coming months. Instagram is owned by Meta, which changed its name from Facebook in October last year to focus on metaverse-related projects. Facebook had previously tried to introduce its own stablecoin Libra, later rebranded to Diem, but was stopped by regulators.

  • Ukraine’s president signed a law “on virtual assets”, establishing a framework for a legal cryptocurrency market with regulatory supervision and a licensing regime for Ukrainian and foreign-based crypto exchanges and other crypto-focused companies. The war-torn nation has recently received massive crypto donations, including a highly-valuable CryptoPunk NFT.

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