ApeCo is the centralized corporate entity established in June 2025 to manage the governance, treasury, and strategic direction of the ApeCoin (APE) ecosystem.1 Formed by Yuga Labs, the creators of the Bored Ape Yacht Club (BAYC) non-fungible token (NFT) collection, ApeCo replaced the ecosystem’s original decentralized governance body, the ApeCoin Decentralized Autonomous Organization (DAO).2 The transition was authorized by a near-unanimous community vote on a formal proposal, Ape Improvement Proposal (AIP) 596, which cited the DAO’s operational inefficiencies and bureaucratic delays as the primary motivation for the change.4
ApeCo’s mandate is to streamline development and focus the ecosystem’s substantial resources on three core pillars: the ApeChain blockchain, the Bored Ape Yacht Club NFT brand, and the Otherside metaverse project.2 The creation of ApeCo represents a significant event in the Web3 space, marking a deliberate and community-ratified pivot from a decentralized, token-holder-led governance model to one of centralized corporate management.1 This shift has sparked considerable debate about the practical trade-offs between decentralization and operational efficiency in large-scale crypto projects.7
History: The Precursor ApeCoin DAO (2022–2025)
Before the establishment of ApeCo, the ApeCoin ecosystem was governed by the ApeCoin DAO, a structure designed to embody the Web3 principles of community ownership and decentralized decision-making.10 Launched on March 17, 2022, the DAO was presented as an experiment in bottom-up governance for one of the most prominent cultural ecosystems in the NFT space.3
Formation and Mandate
ApeCoin (APE) was introduced as an ERC-20 token on the Ethereum blockchain, intended to function as the primary governance and utility token for the APE Ecosystem.3 Although deeply connected to Yuga Labs and its flagship BAYC collection, the token was officially launched by the ApeCoin DAO.3 This structural separation was a deliberate choice to foster a sense of decentralization and potentially navigate the complex regulatory landscape surrounding token issuance by corporate entities.10
The ApeCoin DAO’s core purpose was to provide a decentralized framework through which APE holders could collectively steer the ecosystem’s future.14 Any individual holding at least one
APE token was granted membership and the right to participate in governance.14 Members could submit and vote on proposals concerning a wide range of issues, including the allocation of the DAO’s substantial Ecosystem Fund, the establishment of governance rules, the formation of strategic partnerships, and the funding of new projects and initiatives.14
Governance Structure: The APE Foundation and the AIP Process
While the DAO provided the framework for decision-making, it lacked the legal personhood required to execute those decisions in the real world, such as signing contracts or hiring personnel.17 To bridge this gap, the
APE Foundation was established to act as the legal steward and administrative arm of the DAO.16 The Foundation was responsible for the day-to-day administration, bookkeeping, and project management necessary to implement the proposals passed by the DAO community.16 Its board members were subject to election by DAO members, further linking its operations to the community’s will.14
The formal mechanism for proposing changes was the Ape Improvement Proposal (AIP) system, a process modeled after Ethereum’s well-established EIP (Ethereum Improvement Proposal) framework.14 Proposals were classified into three main categories:10
- Core: For decisions related to Ecosystem Fund allocations and brand direction.
- Process: For amendments to governance procedures, guidelines, or decision-making frameworks.
- Informational: For providing general guidelines or information to the community.
Proposals would move through stages of discussion on a community forum before being put to a formal vote on the off-chain voting platform Snapshot.14 On Snapshot,
APE holders could cast their votes directly or delegate their voting power to other community members they trusted to represent their interests.14
Perceived Inefficiencies and Criticisms
Despite its ambitious and ideologically aligned design, the ApeCoin DAO’s operational reality began to draw significant criticism over its two-year existence.4 The open and permissionless nature of the AIP process, intended to foster broad participation, also created a pathway for a high volume of proposals that many community members and key stakeholders viewed as low-impact or frivolous. Yuga Labs CEO Greg Solano later characterized the environment as having “devolved into sluggish, noisy, and often unserious governance theater”.4
The DAO was criticized for allocating substantial resources to “vanity proposals and low-impact initiatives” while struggling to execute on larger, more strategic goals.2 The formal governance process was perceived as slow and bureaucratic, creating a structural misalignment between the need for agile, long-term product development and a system designed for broad, often-disjointed community consensus.4 This operational drag became a significant bottleneck, hindering progress on capital-intensive pillars like ApeChain and Otherside. The resulting sentiment was one of widespread “DAO fatigue,” with some participants describing the organization as a “drag on the entire ecosystem, pillaged and slow and inefficient and overpoliticized since inception”.4 This growing frustration created the necessary community support for a radical overhaul of the entire governance model.
The Transition to ApeCo: Ape Improvement Proposal 596
The culmination of the community’s dissatisfaction with the DAO’s performance was Ape Improvement Proposal 596, a landmark proposal that fundamentally reshaped the ecosystem’s governance structure.
The Proposal
On June 5, 2025, Yuga Labs CEO Greg Solano submitted AIP-596, titled “Sunsetting the DAO and Launching ApeCo – A New Operating Model for ApeCoin”.4 The proposal was a direct and unambiguous call to dissolve the existing decentralized governance framework. The stated motivation was to replace the DAO, which Solano described as an experiment “born of a different era,” with a “leaner, faster org to take the reins”.4 The core objective was to “eliminate governance gridlock that holds real builders back” and refocus the ecosystem on quality, impact, and strategic alignment.4
The proposal’s specifications were sweeping. It called for the complete termination of the DAO governance system, which included:4
- The revocation of all governance and voting rights held by APE token holders.2
- The nullification of all prior AIPs, with the exception of ongoing contractual and legal obligations.4
- The immediate dissolution of all DAO working groups, committees, and election processes.4
The Vote and Asset Transfer
The vote on AIP-596 was held on Snapshot from June 13 to June 26, 2025.21 The proposal passed with an overwhelming majority, securing a
99.66% approval rate.5 The vote saw the highest participation in the DAO’s history, with 3,175 unique wallets casting a total of 46.75 million
APE tokens in favor of the transition.5 This decisive outcome served as a clear mandate from the community to proceed with the proposed changes.
| AIP-596 Vote Summary | |
| Proposal Title | Sunsetting the DAO and Launching ApeCo – A New Operating Model for ApeCoin |
| AIP Number | 596 |
| Proposer | Greg Solano (CEO, Yuga Labs) |
| Vote Start Date | June 13, 2025 |
| Vote End Date | June 26, 2025 |
| Total Wallets Voting | 3,175 |
| Total APE Voted | 46.75 million |
| Votes For | 99.66% |
| Votes Against | 0.32% |
| Votes Abstain | 0.01% |
With the passage of the AIP, all assets previously under the control of the ApeCoin DAO and its treasury were authorized for transfer to the newly formed ApeCo. This included a significant treasury of approximately 169 million APE, valued at over $168 million at the time of the proposal, as well as all associated intellectual property, social media accounts, smart contracts, and technical infrastructure.9
Dissolution of the APE Foundation
The transition to ApeCo also marked the end of the APE Foundation. As the administrative arm of the now-defunct DAO, its purpose became obsolete.4 The AIP-596 proposal specified that the Foundation would be wound down, with its responsibilities, assets, and key personnel absorbed into the new ApeCo entity.4 This move was designed to ensure operational continuity, with former APE Foundation Executive Director Cameron Kates and other team members slated to form the core of the new ApeCo leadership team.4
Governance, Structure, and Leadership
ApeCo represents a fundamental departure from the decentralized, community-driven ethos of the ApeCoin DAO, implementing a centralized corporate structure designed for efficiency and strategic focus.
Corporate Structure
ApeCo is a centralized entity established and directly controlled by Yuga Labs.2 Under this new model, all major decisions regarding the ApeCoin ecosystem, including treasury management, strategic partnerships, the project roadmap, and funding allocations, are no longer subject to a public vote by token holders.5 Instead, these responsibilities are managed internally by the ApeCo team, operating under the direction of Yuga Labs.5 This structure is intended to mirror a traditional corporate model, prioritizing speed, accountability, and professional execution over the often-cumbersome processes of decentralized consensus.
The establishment of ApeCo can be interpreted as a re-centralization of power. Yuga Labs, which had initially maintained a public distance from the direct governance of ApeCoin, intervened decisively when the DAO’s performance failed to meet its strategic objectives.1 By transferring all assets and control to an entity it established, Yuga Labs effectively reclaimed de jure control over an ecosystem where it had always held significant de facto influence.1 This suggests the DAO phase was less a permanent transfer of power and more a temporary and experimental period of community stewardship.
Leadership and Team
The leadership of ApeCo is composed of experienced operators from the previous governance structure, ensuring a degree of continuity. The team includes former members of the APE Foundation and the “Banana Bill” team.4
Cameron Kates, who served as the Executive Director of the APE Foundation, was named as a key figure in the new ApeCo organization.4 The overall strategic direction is driven by the leadership at Yuga Labs, with CEO
Greg Solano acting as the primary architect and public advocate for the transition.4
Strategic Mandate and Operational Model
ApeCo’s stated mission is to “supercharge the APE ecosystem” by applying a more rigorous and focused approach to growth and development.4 Its operational model has shifted away from the DAO’s open-ended grant system, which was susceptible to funding low-impact projects. The new model emphasizes a more disciplined, venture-style approach to capital allocation, offering
milestone-based grants and demanding tighter accountability from project teams and builders.4
This new mandate explicitly directs all resources toward advancing the ecosystem’s three core pillars: ApeChain, the Bored Ape Yacht Club brand, and the Otherside metaverse.4
Core Ecosystem Pillars
Under ApeCo’s management, the ecosystem’s development efforts are concentrated on three strategic priorities designed to enhance the utility of APE and expand the reach of the Yuga Labs universe.
ApeChain: Technical Architecture
ApeChain is a dedicated blockchain infrastructure layer launched to serve as the primary on-chain environment for the ApeCoin ecosystem, particularly for gaming, NFTs, and other high-throughput applications.29
Its architecture is built using Arbitrum Orbit, a technology stack that allows for the creation of customizable Layer-3 (L3) blockchains.30 ApeChain operates as an optimistic L3 rollup that settles its transactions on the Arbitrum One (L2) network. Arbitrum One, in turn, is secured by the Ethereum (L1) mainnet.32 This layered design allows ApeChain to inherit the robust security and liquidity of Ethereum while benefiting from the high scalability and low transaction costs of the Arbitrum ecosystem.30
A critical feature of ApeChain is the native integration of APE as its gas token.29 This provides a fundamental utility for the token, as it is required to pay for all transactions on the network. To ensure transaction costs remain exceptionally low, ApeChain utilizes Arbitrum’s
AnyTrust data availability model.30 Instead of posting all transaction data directly to the more expensive L1 chain, AnyTrust relies on a permissioned Data Availability Committee (DAC) to store the data off-chain.32 This reduces transaction costs to less than a cent, making the chain viable for high-volume gaming and microtransactions.33 This model was a key factor in the selection of Arbitrum, as it significantly reduces the need for the ecosystem’s treasury to sell
APE to acquire the ETH required for on-chain data posting, thereby minimizing sell pressure on the token.33
The network’s security is augmented by a Security Council, a body tasked with addressing critical protocol risks and managing emergency upgrades.31 While an interim council was established at launch, the governance framework anticipates that future members will be determined through a process administered by the ApeCoin community, now presumably under the guidance of ApeCo.31
| ApeChain Technical Specifications | |
| Architecture | Optimistic Layer-3 (L3) Rollup |
| Technology Stack | Arbitrum Orbit |
| Host Chain (L2) | Arbitrum One |
| Security Provider (L1) | Ethereum |
| Consensus | Optimistic (assumes transactions are valid unless challenged) |
| Block Time | ~0.25 seconds |
| Native Gas Token | APE |
| Data Availability Model | Arbitrum AnyTrust (off-chain via a DAC) |
| Key Features | Ultra-low transaction fees, dedicated throughput, fast withdrawals, native bridging, EVM equivalence |
Bored Ape Yacht Club (BAYC) and Otherside
As two of the three core pillars, the BAYC brand and the Otherside metaverse are central to ApeCo’s mission. ApeCo is tasked with stewarding the cultural and commercial growth of the Bored Ape Yacht Club, the flagship NFT collection that anchors the entire ecosystem.4 This includes managing brand partnerships, community events like ApeFest, and other initiatives that maintain its cultural relevance.5
Furthermore, ApeCo will direct resources toward the development of Otherside, Yuga Labs’ ambitious metaverse project.4 ApeChain is designed to be the foundational technical layer for Otherside, with
APE serving as the primary in-game currency for transactions, virtual land sales, and other economic activities within this virtual world.5
Reception and Controversy: The Centralization Debate
The transition from the ApeCoin DAO to ApeCo was a pivotal moment that elicited strong and varied reactions from the Web3 community, crystallizing a broader industry debate about the merits of decentralized governance versus centralized execution.
Community Support and Rationale
The overwhelming 99.66% vote in favor of AIP-596 demonstrated a clear and powerful consensus among active token holders that the DAO model had failed to deliver on its promise.5 Supporters of the transition frequently cited “DAO fatigue”, a sense of exhaustion with the slow, inefficient, and often contentious nature of decentralized governance.2 Many viewed the move to ApeCo as a “positive reset” that would install clearer leadership, streamline decision-making, and bring a much-needed focus to the ecosystem.7
A core argument among proponents was that Yuga Labs, as the creator of BAYC and the primary driver of value and culture within the ecosystem, was inherently a better steward of its future than a decentralized collective.4 This perspective prioritizes results and effective execution over ideological adherence to decentralization, reflecting a pragmatic belief that a more controlled corporate structure was necessary to compete and innovate effectively.8
Criticism and Concerns
Despite the lopsided vote, a vocal minority of decentralization advocates and community members expressed significant concern over the transition. Critics framed the move as a “power grab” by Yuga Labs that fundamentally betrayed the Web3 principle of community ownership and control.7 The dissolution of one of the most visible and well-funded DAOs in the crypto space was seen as having “bad optics” and the potential to cause long-term “reputational damage” to the project and its founders.2
The primary concerns centered on the concentration of power and the loss of the token-holder’s voice.8 With ApeCo in full control of the treasury and roadmap, there is a risk that decisions could be made to prioritize Yuga Labs’ corporate interests over those of the broader community of
APE holders.8 These critics argue that while the DAO may have been inefficient, it provided an essential check on centralized authority, a safeguard that has now been removed.
Market Impact and Broader Implications
The market’s reaction to the governance shift was mixed, reflecting the divided sentiment. In the second quarter of 2025, which encompassed the proposal and vote, the price of APE rose 30.1%, outpacing the growth of Ethereum during the same period.5 This suggests that investors largely viewed the move toward greater efficiency as a positive catalyst. However, the announcement also triggered short-term price volatility, including an initial drop, indicating some market uncertainty about the implications of centralization.5
The ApeCo transition has become a major case study in the ongoing evolution of Web3 governance. It raises critical questions about the scalability and long-term viability of DAOs, especially for ecosystems that require the cohesive, long-term product strategy of a technology company.3 The community’s decision to vote for centralization demonstrates a pragmatic shift in the space; when faced with a choice between a struggling decentralized model and a promise of decisive, founder-led execution, token holders acted as rational economic agents and chose the path they believed was more likely to generate value.9 This suggests that for many participants, decentralization is a means to an end; a healthy, growing ecosystem, rather than an immutable ideological principle. The success or failure of ApeCo to deliver on its promises of accelerated growth and innovation will likely serve as a key precedent for other large-scale Web3 projects grappling with similar governance challenges.9
References
- Yuga Labs Proposes Possible Restructuring of ApeCoin Governance Amid Asset Transfer Plans. (2025). Bitget News. https://www.bitget.com/news/detail/12560604801827
- Reguerra, E. (2025). Yuga Labs Seeks to Replace ApeCoin DAO With New Entity, ApeCo. Cointelegraph. https://cointelegraph.com/news/yuga-labs-aims-to-replace-apecoin-dao-with-apeco
- Solano, G. (2025). AIP-596: Sunsetting the DAO and Launching ApeCo – A New Operating Model for ApeCoin. ApeCoin DAO Forum. https://forum.apecoin.com/t/aip-596-sunsetting-the-dao-and-launching-apeco-a-new-operating-model-for-apecoin/28242
- ApeCoin Soars 30% in Q2 as Unveils Radical ApeCo Governance Model. (2025). MEXC. https://www.mexc.co/fil-PH/news/apecoin-soars-30-in-q2-as-unveils-radical-apeco-governance-model/96142
- Park, D. (2025). Yuga Labs proposes dismantling ApeCoin DAO over failed governance, replacing it with new entity ApeCo. The Block. https://www.theblock.co/post/357230/yuga-labs-proposes-dismantling-apecoin-dao-over-failed-governance-replacing-it-with-new-entity-apeco
- Stefanov, A. (2025). Yuga Labs Moves to Dismantle ApeCoin DAO in Favor of Centralized Structure. Cryptodnes.bg. https://cryptodnes.bg/en/yuga-labs-moves-to-dismantle-apecoin-dao-in-favor-of-centralized-structure/
- Yuga Moves to Kill ApeCoin DAO, Transfer $168M in Assets to New Entity. (n.d.). Cryptorank.io. https://cryptorank.io/news/feed/358f1-yuga-moves-to-kill-apecoin-dao-transfer-168m-in-assets-to-new-entity
- ApeCo Gaining Momentum as ApeCoin DAO Dissolution Governance Voting Progresses. (n.d.). Tekedia. https://www.tekedia.com/apeco-gaining-momentum-as-apecoin-dao-dissolution-governance-voting-progresses/
- ApeCoin: The Yuga Labs ERC-20 Token Explained. (2025). OneKey. https://onekey.so/blog/ecosystem/apecoin-the-yuga-labs-erc-20-token-explained/
- ApeCoin: The Yuga Labs ERC-20 Token Explained. (n.d.). Ledger. https://www.ledger.com/academy/apecoin-the-yuga-labs-erc-20-token-explained
- About ApeCoin. (n.d.). Coinbase. https://www.coinbase.com/price/apecoin
- Shocking Yuga Labs Move: ApeCoin DAO Faces Dissolution Proposal. (n.d.). Bitget News. https://www.bitget.com/news/detail/12560604799460
- ApeCoin DAO Governance. (n.d.). ApeCoin.com. https://apecoin.com/governance
- ApeCoin Research Hub. (2025). ONUS. https://goonus.io/en/research/ape/
- ApeCoin (APE). (n.d.). CoinMarketCap. https://coinmarketcap.com/currencies/apecoin-ape/
- Oregon v. Coinbase Complaint. (2025). State of Oregon Department of Justice. https://www.doj.state.or.us/wp-content/uploads/2025/05/Oregon-v.-Coinbase-Complaint.pdf
- AIP-1: Proposing the DAO – Process. (2023). ApeCoin DAO Forum. https://forum.apecoin.com/t/aip-1-proposing-the-dao-process/39
- What is ApeCoin? (n.d.). Northcrypto. https://www.northcrypto.com/learn/about/apecoin
- Bush, T. (2021). API Improvement Proposals: Google’s Take on the API Style Guide. Nordic APIs. https://nordicapis.com/api-improvement-proposals-googles-take-on-the-api-style-guide/
- Latest ApeCoin News. (2025). CoinMarketCap. https://coinmarketcap.com/cmc-ai/apecoin-ape/latest-updates/
- ApeCoin DAO Governance. (n.d.). DefiLlama. https://defillama.com/governance/apecoin-dao
- AIP Voting Results for AIP-596. (2025). ApeCoin DAO Forum. https://forum.apecoin.com/t/aip-voting-results-for-aip-596/28452
- Voting on Proposal AIP-596 to Dissolve ApeCoin DAO Concludes with 99.66% Approval Rate. (2025). Bitget News. https://www.bitget.com/news/detail/12560604836424
- The voting for the proposal AIP-596 to dissolve ApeCoin DAO has officially started and will end on June 26. (n.d.). ChainCatcher. https://www.chaincatcher.com/en/article/2186183
- Voting for the proposal to dissolve the ApeCoin DAO and initiate the new entity ApeCo has started, and will conclude on June 26. (2025). Binance Square. https://www.binance.com/en/square/post/25603064099898
- Yuga Labs. (n.d.). Tracxn. https://tracxn.com/d/companies/yuga-labs/__BxpG5rBGgDLyXaXdjuWB4-nnIk-Hzhj_WGF-DlwCVzw
- Yuga Labs Proposes Dissolution of ApeCoin DAO. (2025). ForkLog. https://forklog.com/en/yuga-labs-proposes-dissolution-of-apecoin-dao/
- ApeChain Chooses Arbitrum to Support ApeCoin. (2025). GAM3S.GG. https://gam3s.gg/news/apechain-chooses-arbitrum-support-apecoin/
- Inside ApeChain: The Infrastructure Powering the $APE Ecosystem. (n.d.). nft now. https://nftnow.com/guides/apechain-guide-apecoin-ape-ecosystem/
- ApeChain Architecture. (n.d.). ApeChain Docs. https://docs.apechain.com/architecture
- ApeChain. (n.d.). L2BEAT. https://l2beat.com/scaling/projects/apechain
- ApeChain: Bid – ApeChain developed with Arbitrum technology with growth led by Horizen Labs. (n.d.). ApeCoin DAO Forum. https://forum.apecoin.com/t/aip-378-apechain-bid-apechain-developed-with-arbitrum-technology-with-growth-led-by-horizen-labs/20779
- ApeChain Docs. (n.d.). ApeChain Docs. https://docs.apechain.com/
- APE Coin 2025 Latest Use Cases, Risks and Ecosystem Analysis. (2025). Gate.com. https://www.gate.com/blog/6799/what-is-ape-coin
- ApeChain Chooses Arbitrum to Support ApeCoin. (2025). GAM3S.GG. https://gam3s.gg/news/apechain-chooses-arbitrum-support-apecoin/
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- APE Coin 2025 Latest Use Cases, Risks and Ecosystem Analysis. (2025). Gate.com. https://www.gate.com/blog/6799/what-is-ape-coin
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