After the disastrous minting of non-fungible tokens (NFTs) for the metaverse "Otherside" cost investors more than $100 million in transaction fees, both Yuga Labs and ApeCoin DAO board members are listening to bids to migrate ApeCoin from Ethereum, CoinDesk has learned.
Two suitors are Avalanche and Flow, according to executives at the companies behind both networks. Both blockchains consider themselves better suited to host a large-scale NFT ecosystem like Yuga's.
Yuga Labs first alluded to a possible migration of ApeCoin at the end of an April 30 Twitter thread, "encouraging" the decentralized autonomous organization (DAO) made up of APE holders to consider it as a possibility.
A source familiar with the ApeCoin Foundation told CoinDesk that the board had not previously considered migrating to another Layer 1, but that the tweet sparked a discussion among DAO members about a potential move that is ongoing.
While the DAO board is not actively seeking new Chains, the source said it recognizes its responsibility to implement the DAO's wishes, including a Chain migration should it be adopted in a proposal.
ApeCoin board members include Reddit co-founder Alex Ohanian, Animoca Brands chairman Yat Siu and FTX's head of gaming Amy Wu.
The DAO has so far voted on 11 different proposals since its inception in March. Yuga Labs did not directly respond to CoinDesk's inquiry about its influence on the decision-making process.
The case for AVAX and FLOW
In the event of Avalanche's move, the Yuga ecosystem could exist on its own subnet, a technology that allows a single application's transactions to be isolated without clogging the broader network.
Avalanche committed $290 million in March to win subnets, but talks with Yuga are still preliminary.
"We had some early conversations with Yuga about subnets, and we certainly have our pitch ready to go," Kevin Sekniqi, co-founder and COO at Ava Labs, told CoinDesk in an interview. "We've all seen it with land sales, NFT ecosystems of this size need to exist in a scalable environment."
Flow's blockchain offers a similar value proposition and has proven its ability to handle high transaction volumes with NBA Top Shot, where tens of thousands of transactions occur daily.
Dapper Labs, the company behind Flow, also developed the blockchain out of a similar need after the infamous CryptoKitties NFT debacle temporarily crippled Ethereum to a similar extent as the Otherside sale.
"We've had some conversations with people who are board members [of the ApeCoin DAO], and I think it will come down to a vote," Mik Naayem, chief business officer of Dapper Labs, said in an interview with CoinDesk. "CryptoKitties faced similar challenges and I think Flow would be a great home for [ApeCoin], while still having a lot of assets on Ethereum and things to consider."
Pros and cons
The advantages of moving the Yuga ecosystem to its own chain are obvious: lower transaction costs, faster network speeds, the ability to pay gas fees in APE, etc. But potential problems that could arise from the move are obvious, as is the question of what the company would do with all of its existing Ethereum assets, which amount to a market cap of over $1 billion.
Even with its own chain, there could be numerous complications. The popular game Axie Infinity is seen by many as a cautionary tale for migration, as it was recently hit by a $625 million exploit of the gaming-focused Ronin network. On the other hand, Crabada - based on its own Avalanche subnet - has become an emerging Web 3 gaming hit.
As Dapper Labs' Naayem said, the decision to migrate Chains is ultimately made by members of the ApeCoin DAO, an entity over which Yuga has asserted it has no control, though it undoubtedly has influence.