Author: JamesX (@0xJamesXXX)

Yuga Labs and Horizen Labs officially launched the ApeStake.io website on December 5, and also started the one-week pre-staking phase of Ape Staking. The official Ape token staking incentives will be distributed on December 12, and based on the current pre-staking data (December 8), the expected APY income is 1000%+.

Although there are still a few days until the official mining starts, and the expected APY yield will decrease after more APE tokens and BAYC/MAYC/BAKC series NFTs participate in staking, it is still a good thing for investors and NFT collections. For everyone, Ape Staking is an investment opportunity not to be missed.

Then this article will elaborate on the official rules of Ape Staking and risk precautions for participation, and compare the staking rules and expected returns of three third-party Ape Staking platforms (ParaSpace, BendDAO, Binance NFT) to help you make decisions based on your own situation. Make the most rational decision.

ApeStake.io Official Staking

Ape Staking’s earliest solution, AIP 4&5, was voted down by the community. After a lot of community discussions, it was not until the voting of AIP 21&22 was passed that the activity details of Ape Staking were considered to have formed a community consensus and the preparation process began.

The figure below shows the amount of APE token incentives released in each quarter of the three-year Ape Staking activity. It can be seen that early participants can obtain more APE token incentives and higher expected returns.

The activity participation form of APE Staking is divided into four independent pledge pools: APE token pledge pool, BAYC pool, MAYC pool, and BAKC matching pool. Any number of APE tokens can be directly pledged in the Ape token pledge pool, so the income of participants depends on the proportion of APE tokens invested in the total pool. As for the BAYC and MAYC pledge pools, NFT is more like a container holding APE tokens. APE tokens need to be paired with them to participate in APE Staking mining. Their mining share is determined by the number of paired APE tokens, and each NFT has The upper limit of paired APE tokens. BAKC must be paired with a BAYC/MAYC before it can participate in staking with APE tokens. Please refer to the figure below for the specific APE token mortgage limit and the APE token release amount for each asset pool.

Note: If you choose to directly participate in staking mining activities through ApeStake.io, please note that if you sell the corresponding Ape NFT during the staking period, you will lose all paired pledged Ape tokens. Therefore, please remember to unpledge Ape NFT and recover all pledged Ape tokens before the transaction occurs to prevent being attacked by arbitrageurs.

The above introduces you to the details of participating in Ape Staking through official channels, but please note that the premise is that you must have BAYC/MAYC/BAKC NFTs and the corresponding upper limit of APE tokens at the same time to achieve the highest expected income. Rate. So if you only own the corresponding NFT or APE, or if you want to obtain a higher expected rate of return and more liquidity, then you have three better options: ParaSpace, BendDAO and Binance NFT.

ParaSpace

The name ParaSpace may be unfamiliar to everyone, because it is indeed a new player in the NFT lending market, but its sister project Parallel Finance, the largest lending protocol in the Polkadot ecosystem, is certainly familiar to everyone, and the development team is also Para Labs.

Para Labs’ first exploration of multi-chain deployment + multi-market layout is ParaSpace, an innovative NFT lending platform based on the Ethereum ecosystem. This strategic layout is somewhat similar to the logic of Uniswap Labs’ recent entry into the NFT trading market. As its first battle to open the Ethereum NFT lending market, the ParaSpace team also developed a complete set of products for Ape Staking, and launched an additional 30% APY mining reward for APE tokens during the pre-staking stage to encourage early users to participate.

ParaSpace Ape Staking, like BendDAO to be analyzed below, uses NFT mortgage lending as the basic logic of the platform. Coupled with the mechanism of Ape Staking, NFT holders can obtain additional liquidity through mortgage lending. Participate in Ape Staking liquidity mining to obtain continuous APE token mining rewards. However, ParaSpace adopted an innovative Peer-to-Pool model, which greatly improved capital utilization efficiency.

First, after holders of Ape NFT stake the NFT on the ParaSpace platform, they can borrow the required paired APE tokens from the APE lending pool to pair with their NFT, without having to find a specific APE token holder to let them Pairing the token pledge to your own NFT greatly reduces market friction. At the same time, APE token holders only need to deposit their APE tokens into the ParaSpace lending pool to receive APE Staking incentives in the form of lending interest rates.

（ParaSpace Twitter）

APE Staking paired mining in the form of NFT lending has a mechanical risk of Ape NFT being liquidated, but ParaSpace has also solved this problem very cleverly. First of all, the currency price of APE tokens has a relatively strong correlation with the floor price of Ape NFT, so the liquidation risk itself is lower than the NFT mortgage lending ETH model. At the same time, in extreme cases, when the liquidation process is about to start, ParaSpace will automatically redeem the pledged Ape NFT, but will deduct the necessary part from its Staking rewards to ensure the repayment of APE token lending, and the Ape NFT itself will not Really enter the liquidation auction process.

（ParaSpace Twitter）

In addition, as mentioned in the previous section, if Ape NFT is sold during the staking period, the original holder will also lose the paired APE tokens. ParaSpace has also avoided this risk through the developed smart contract. For any Ape NFT staking and mining through ParaSpace, if a transaction occurs during the staking period, ParaSpace will automatically unstake and return all Ape tokens before the transfer of the transaction occurs. It fundamentally eliminates the occurrence of this bug in the official mechanism and ensures the safety of its own APE lending pool.

Regarding the contract security aspect that users are most worried about, although ParaSpace is a brand new NFT lending platform and a new contract developed for Ape Staking was launched on the mainnet on December 10, its contract has already passed 0xQuit, Certik, trailofbits, and secure3io security audit, and several other leading security audit companies are also conducting final stage security reviews, including SlowMist, VeridiseInc, and Quantstamp.

For users who want to directly participate in Ape Staking, but are restricted by ApeStake.io due to geographical location, ParaSpace has developed a front-end interface that directly interacts with the official Staking contract to facilitate the use of restricted users.

BendDAO

BendDAO is no stranger to most NFT blue-chip players and has been running smoothly for nearly 9 months. During this period, BendDAO also experienced violent fluctuations in blue-chip NFT prices, causing many NFTs to be liquidated. Not long ago, the industry was also questioning whether it would be the culprit of blue-chip NFT prices entering a death spiral and its ability to resolve bad debts. However, with the continuous iterative upgrade of products and efforts to modify important parameters through community proposals and decisions, BendDAO uses data And time has proven its leading position in the NFTFi field. Therefore, BendDAO is also a very important third-party participation platform in Ape Staking activities.

BendDAO's product planning to support Ape Staking began with a community proposal, and through another subsequent proposal vote, it was decided that the APE Staking protocol fee that BendDAO will charge is 4%, which can be called the leader in DAO governance in the NFTFi field. A benchmark case.

The Ape Staking product design idea adopted by BendDAO is different from ParaSpace's Peer-to-Pool logic, but adopts a Peer-to-Peer model with a higher degree of user freedom. When each BAYC/MAYC is deposited into BendApe Staking, NFT holders are free to set several parameters: 1. The total APE token reward for each role of Ape NFT, APE tokens, and BAKC matching pledgers percentage. 2. Quantity requirements for APE token pledge.

For APE token holders, they can choose any Ape NFT pair for staking, but the most important selection basis is definitely the reward distribution ratio preset by Ape NFT holders.

This is BendDAO’s Peer-to-Peer pairing mining model, which gives users the greatest freedom, but it also brings some problems with high pairing friction, such as the setting of the reward distribution ratio. If the set profit share of APE token pledge is high, there is a high probability that there will be enough APE tokens to participate in the matching pledge, but the profit shared by Ape NFT holders may not be as good as the expected rate of return on other platforms; If the profit share of staking APE tokens is low, it may happen that no APE tokens are willing to pair up with the Ape NFT and pledge it. Therefore, it is very likely that after the official start of the Ape Staking activity, Ape NFT holders will continue to redeem and readjust the reward distribution ratio based on the expected yields of other platforms, making it impossible for users of different roles to obtain long-term stability. income.

Binance NFT

Centralized exchanges have also found their own angle of entry in Ape Staking activities. Binance NFT issued an announcement on December 6, announcing that it would start the Ape NFT staking activity on December 12.

The rules of the activity can be said to be the simplest and most straightforward among these Ape Staking projects. Users only need to stake BAYC and MAYC NFT on the Binance NFT platform to receive daily APE token mining rewards. It is equivalent to providing a centralized staking service for Ape NFT holders, and users do not need to worry about the matching pledge rules of APE tokens to earn profits from Ape Staking activities.

Users can choose to pledge BAYC or MAYC NFT in the form of current deposits or fixed periods of 30 days, 60 days, or 90 days. Although the official announcement did not mention the difference in yields between different pledge periods, it can be expected that longer fixed-term pledges should correspond to higher expected yields.

It is worth noting that after the staking starts, if the user wants to withdraw the pledged Ape NFT, the official announcement reminds that the redemption process of current pledge will take 48 hours, and the early redemption process of fixed-term pledge will take as long as 7 days, and the APE mining income of these 7 days will be lost. This is not a user-friendly pledge and redemption mechanism for the highly volatile NFT market. At the same time, compared to the "DeFi" form of ParaSpace and BendDAO, where all processes are carried out through smart contracts and guaranteed by numerous audit reports, Binance NFT's centralized pledge mechanism also has certain centralized operational risks, but the holding of Ape NFT Investors can also check whether their BAYC/MAYC has participated in the pledge through the on-chain data at any time through official channels.

Binance NFT has not yet announced its specific profit methods and revenue expectations, including how it will be paired with APE tokens to participate in Ape Staking (the source of this part of APE tokens should be Binance Earn’s APE Staking activities), and it will be divided from it How much profit will be gained is still unknown. Therefore, the specific staking rate of return can only wait until the event is officially launched on December 12 before users can make a direct comparison and make their own decisions. However, it is estimated that the rate of return at that time should be higher than the rate of return of the official pure NFT pledge, but lower than the rate of return of NFT + APE token pairing.

Summarize

In order to facilitate a direct comparison between the above four participating Ape Staking platforms, I have made the following table for your reference.

Although, regarding the design of the Ape Staking activity, NFT users and currency holders in the APE ecosystem have mixed reviews. But as a DeFi researcher, I am very pleased to see that NFT native projects are integrating more design ideas from the DeFi track, including Art Gobblers, which became popular some time ago, and draws on the (3, 3) model of the DeFi project OlympusDAO.

At the same time, this is even more true in the NFTFi track: LooksRare and X2Y2, which trade as mining, Blur.io, which upgrades to Listing + Bid, that is, "mining" blind boxes, ParaSpace, BendDAO and BendDAO, which use over-collateralized lending as the underlying logic of the product. JPEG'd, these projects provide huge support for the underlying liquidity of the NFT track and improve the overall capital utilization efficiency.

I believe that with the continuous exploration of the entire NFT ecosystem to combine token economic models, as well as the continuous efforts of builders on the NFTFi track and the innovation of mechanisms combined with the characteristics of NFT itself, we will soon gain a more attractive PFP series, using NFT With RWA on-chain investment opportunities, customized financial bills, etc., NFT will definitely play a more important role in the future on-chain financial system.