ApeCoin slides 40% in three days despite Otherside metaverse land sale — here’s why

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APE price could see more downside in the coming days as the Otherside hype cools down.

ApeCoin (APE) caught its bulls off-guard with APE price losing nearly 40% in just three days.

No dutch auction

APE’s price reached its second-highest level, hitting $27.57 on April 28, up more than 2,650% from its mid-March debut.

Nonetheless, traders started unwinding their positions after Yuga Labs, the Bored Ape Yacht Club (BAYC) NFT collection’s creator, released the details of the mint of its Otherside Metaverse lands, dubbed “Otherdeed.”

Yuga Labs revealed that the NFT mint would cost a flat 305 APE (~$5,250 at today’s price), in contrast to expectations that the company would sell the metaverse land parcels in a dutch auction manner. Thus, the disclosure may have reduced the need for people to hoard more ApeCoin tokens, leading to a drop in demand.

APE dropped to as low as $17 three days after the Yuga Labs’ announcement.

APE/USD four-hour price chart. Source: TradingView

Additionally, the selloff accelerated due to Yuga Labs’ decision to limit the minting of Otherdeed NFTs, starting with two NFTs per wallet for the first wave. This may have also played a role in driving down demand for APE tokens.

APE a “good buy” after dip?

ApeCoin serves as a primary settlement token for all the Yuga Labs’ products and services. Additionally, it is a governance asset within “ApeCoin DAO,” a decentralized autonomous organization that gives APE holders the right to vote on the proposals made by community members.

But the biggest takeaway remains APE’s close association with Yuga Labs itself, a blue-chip startup whose valuation reached $4 billion almost a year after its debut. So, the hype surrounding its metaverse land sales, all payable via ApeCoin, could absorb the ongoing selling.

OpenSea, the world’s leading NFT marketplace, also announced on April 30 that it has started accepting APE for payments on its platform. Meanwhile, Yuga Labs has requested the ApeCoin DAO to hold a vote on whether APE could migrate from Ethereum to its own blockchain.

Loma, an independent market analyst, signaled APE’s potential of bottoming out despite its latest price dip, citing “interest and speculation” surrounding the Otherside mint.

“The bear market dip-buying of choice seems to un-ironically be $APE and related ecosystem,” the analyst noted, adding:

“I think it’ll be a good buy once the mint-hype dies down.”

ApeCoin technicals agree

APE’s latest selloff has led its price to a support confluence defined by its 100-4H exponential moving average (100-4H EMA; the black wave) and the 0.5 Fib line (around 17.29) of the Fibonacci retracement graph drawn from $10.63-swing low to nearly $24-swing high.

ApeCoin four-hour price chart. Source: TradingView

APE/USD has been attempting to rebound from the said confluence, but lackluster volumes indicate that it would continue falling deeper, with the 0.618 Fib line near $15.72 serving as the next downside target, down over 10% from today’s price.

The level coincides with the 200-4H EMA (the blue wave) and the top of a so-called “demand zone” — the launchpad for APE’s previous 100% price rally.

Related: 2 key metrics point toward further downside for the entire crypto market

Conversely, a rebound from 100-4H EMA could have APE test the 0.382 Fib line near $18.85. Accompanied by convincingly increasing volumes, the price could test $20 and 24 as the next bullish targets.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Here are 3 ways hodlers can profit during bull and bear markets

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The bull market may be over, but that doesn’t mean traders have to stop investing. Here are a few ways to invest in crypto even during a bear market.

For years, cryptocurrency advocates have touted the world-changing capability of digital currency and blockchain technology. Yet with the passing of each market cycle, new projects come and go, and the promised utility of these “real-world use case” projects fails to satisfy.

While a majority of tokens promise to solve real-world problems, only a few achieve this, and the others are mere speculative investments.

Here’s a look at the three things cryptocurrency investors can actually “do” with their coins.

Lending

Perhaps the simplest use case offered to cryptocurrency holders is also one of the oldest monetary applications in finance: lending.

Ever since the decentralized finance (DeFi) sector took off in 2020, the opportunities available for crypto holders to lend out their tokens in exchange for rewards have multiplied.

Blue-chip DeFi protocols like Aave, Maker and Compound offer reasonable yield on stablecoins, and lesser-known protocols often offer higher rewards in an effort to attract liquidity.

Recently, the crypto lending field has expanded into realms that are typically dominated by traditional finance. This is especially true for real estate, where a number of experimental cryptocurrency-based mortgage and listing platforms are making headway.

Platforms like Vesta Equity and the newly launched USDC.homes offer crypto holders the opportunity to collateralize their assets to obtain a mortgage or lend them out to aspiring home buyers in exchange for long-term yield.

Stablecoin farming

Another way to put the hodl bag to use is by farming stablecoins. The cryptocurrency market is well known for its high volatility and high-risk trades, but earning a yield on stablecoins is a safer way to grow a portfolio without the downside risk of investing in Bitcoin (BTC) and altcoins.

In bull and bear markets, liquidity is required for DeFi protocols to function properly, and the integration of stablecoins on centralized and decentralized exchanges has helped the market mature and stay sufficiently liquid.

Platforms like Curve Finance, Beefy Finance and Trader Joe offer yield on stablecoin liquidity pools, and rates can reach as high as 20% APY.

Related: Bipartisan bill to give CFTC authority over exchanges and stablecoins

No-loss token offerings

Another way to “use” cryptocurrency is by participating in the no-loss token offerings launching across the ecosystem.

An example of a no-loss token offering is the parachain auctions that occur on the Polkadot and Kusama networks. In this type of protocol launch, investors interested in supporting a project can lock up DOT or KSM for a specified period of time as a form of collateral backing for the project.

Contributors receive the native token of the newly launched protocol In exchange for locking their investment in the project’s smart contract. After the designated lock-up period is complete, the total balance of tokens is returned to the contributor, meaning they retain their original holdings while also adding new assets to their portfolio.

Lockdrops are another example of this type of no-loss token offering. One was recently employed during the launches of Astroport and Mars Protocol.

Lockdrops have also been referred to as airdrops because they technically don’t help projects raise funds, rather they require some level of commitment for future use from token recipients. While airdrops just distribute tokens to users who opt-in, lockdrops require interested parties to commit to locking up some liquidity that can be utilized by the project during its initial launch.

The Astroport launch involved a novel liquidity bootstrapping phase where contributors could provide liquidity pool pairs in exchange for a higher reward level. Upon lockup, a one-time lockdrop reward is distributed to participants to hold, trade or use to provide liquidity.

Liquidity providers also receive trading fees and other incentives depending on the liquidity pool they are in as a way to improve the opportunity cost of providing that liquidity.

Once the agreed-upon lockup period is complete, users are free to remove the liquidity.

No loss token offerings give long-term crypto holders a chance to earn tokens for newly launched protocols in exchange for yield and a choice of what token they would like to accumulate as a reward.

Want more information about trading and investing in crypto markets?

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Propy partners with Abra to provide crypto-backed real estate loans

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Cryptocurrency investors now have more options for purchasing property without having to sell their digital assets outright.

Blockchain real estate platform Propy has partnered with Abra to allow customers to obtain home loans using their cryptocurrency holdings, potentially widening the financial use cases of digital assets. 

Propy customers can now put up digital assets as collateral for their real estate purchases through Abra Borrow, a cryptocurrency lending and borrowing service. Crypto collateral pledged on Abra is used to borrow United States dollars that can then be applied to home purchases.

The Propy blockchain records the entire transaction process, serving as the technical and legal framework for buyers and sellers. According to Propy, the blockchain records the transaction whether it’s made in crypto, nonfungible tokens (NFT) or traditional fiat currency.

Abra is a crypto-focused wealth management platform that has been around since 2014. The platform allows users to generate yield on their crypto, borrow dollars against their holdings and trade digital assets. Abra has received backing from several major companies, including Amex Ventures, the venture capital arm of American Express, which contributed to its $55 million Series C funding round in September 2021.

While early crypto investors have generated significant wealth over the years, their access to traditional financial products such as mortgages remains limited. Decentralized finance, or DeFi, applications are attempting to fill the void. As Cointelegraph reported, a new homeowner in Austin, Texas recently purchased property through a mortgage obtained from USDC.homes, a crypto loan service based on Circle’s USD Coin (USDC).

Related: Web3 solutions aim to make America’s real estate market more accessible

Fintech startup Milo is also offering crypto mortgages to homebuyers wishing to use their Bitcoin (BTC) as collateral. Meanwhile, decentralized mortgage lender Bacon Protocol launched a program in September 2021 that allows homeowners to exchange a lien on their property for an NFT that represents a percentage of the property they bought.

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Web3 solutions aim to make America’s real estate market more accessible

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Web3 solutions may be the answer to America’s housing market, but will the mainstream want to use blockchain-based platforms?

America’s housing market may soon be facing its next bubble as home prices across the country continue to be fueled by demand, speculation and lavish spending that could result in a collapse. Moreover, many homeowners are opting to stay put due to climbing mortgage rates, creating a housing shortage. 

Data from the Federal National Mortgage Association, commonly known as Fannie Mae, found that 92% of homeowners think their current home is affordable. Yet, findings further show that 69% of the general population, consisting of both homeowners and renters, believe it’s becoming too difficult to find affordable housing.

Web3 and the real-estate market

While the fate of the United States housing market remains unclear, the rise of Web3 business models based around nonfungible tokens (NFTs), blockchain technology and cryptocurrency aim to solve many of the problems currently plaguing America’s trillion-dollar real estate market.

Jerry Chu, CEO of tokenization platform Lofty AI, told Cointelegraph that although real estate is one of the best asset classes for wealth creation across the globe, most people can’t access it due to three main reasons:

“Real estate, especially today, is expensive. Even if someone could get a mortgage, many times a down payment requires too much cash. The real estate process is also frustrating, as mortgages need to be approved and a title escrow process could take up to 60 days. Finally, there isn’t much liquidity in real estate, therefore sellers will likely lose money if they wish to quickly liquidate.”

In order to make real estate attainable for the masses, Chu decided to create a platform that could fractionalize properties. Known as Lofty AI, Chu explained that the platform is built on the Algorand blockchain and consists of various turnkey rental properties that multiple investors can fractionally purchase for as little as $50. “You can think of every property as its own mini blockchain on the Algorand network. Assets, or unique tokens, are created for every property listed. The token supply is different depending on how expensive the properties are,” said Chu.

While the concept of tokenizing real estate has become rather common — for instance, Cointelegraph research recently found that the real estate sector makes up 89% of all traded security tokens — Chu pointed out that Lofty is an active investing platform. “Similar platforms invest in real estate and flip properties to customers, but we allow investors to manage these properties and continually earn rewards and income.”

A property featured on Lofty AI. Source: Lofty AI

Elaborating on this, Chu explained that Lofty is based on a co-ownership model where the deeds for each property listed on the marketplace are held and owned by a limited liability company, or LLC. When investors purchase tokens, they immediately become a member of that entity, meaning they own a percentage of that business.

Like other decentralized finance (DeFi) platforms, Lofty has a governance system that allows token holders to vote on how to manage the properties they own. “Token holders need to reach a supermajority vote of 60% for decisions to be acted upon. The winning vote is then sent to the property manager to carry out. These decisions could include maintenance, rent changes, eviction decisions and more.”

Chu added that investors can also earn portions of rental income generated from tenants, which can either be withdrawn to a bank account or donated to Mercy Housing, an affordable housing organization. “Most Lofty users care about the appreciation of their tokens on the properties they buy into, and, therefore, donate their earned income to affordable housing programs,” Chu mentioned.

While this may be, Chu emphasized that the goal behind Lofty is to make real estate investing more accessible simply. “This seems to be the case, as the platform launched last year and already has close to 4,000 users,” he said. Takahito Torimoto, a solutions architect and Lofty user, further told Cointelegraph that he has been a real estate investor for a few years, but Lofty has been an ideal solution due to the platform’s liquidity and returns. “There are no fees for users, and given the current real estate market, Lofty appears much better for a very big part of my ‘early retirement’ strategy,” he remarked.

In addition to Lofty, mortgage lender LoanSnap launched a mortgage-backed stablecoin on their Bacon Protocol at the end of last year. Karl Jacob, CEO of LoanSnap and co-founder of Bacon Protocol, told Cointelegraph that while a mortgage-backed token solves many issues associated with stablecoins, these digital assets also benefit current homeowners and buyers.

Technically speaking, LoanSnap has minted NFTs tied to individual mortgage liens, which are property ownership rights that collateralize mortgage loans. Those NFTs are then used to back LoanSnap’s stablecoin known as the “bHome token.” Jacob explained that this system is beneficial for a number of reasons:

“Mortgage-backed stablecoins are advantageous to homeowners and buyers because speed is everything in a real-estate transaction. This process works quickly since it leverages the Ethereum blockchain. You can see a loan getting closed and funded in a matter of 24-hours or less, depending on state compliance.”

In other words, wrapping an NFT around a mortgage lien and putting that asset on a blockchain network allows anyone access to those records. “We provide the minimal amount of data, so individuals can only see the address of a property, the lien size and property value,” said Jacob.

Jacob claimed that the bHome stablecoin also opens up access to the U.S. housing market. “Investors that buy into the bHome token are gaining exposure to the housing market without having to own a home. This is simply a pool of mortgages across the country that offers a great way to participate without the costs associated with homeownership.” While the platform is fairly new, Jacob shared that about 30 mortgages on LoanSnap are being used for its stablecoin pool, noting that the platform has lent out over $7 million against its $42 million home value on the platform.

Some U.S. real estate properties have also recently been sold as NFTs, a concept that seems to be attracting Generation-Z homebuyers. This is important, as data shows that Gen Z’s only made up 2% of all home sales in 2020. Natalia Karayaneva, CEO and co-founder of Propy — a blockchain-based real estate platform — told Cointelegraph that Proppy has recently sold three NFT properties: one in Kyiv and two in Florida. “We are the first platform to sell real estate as NFTs, which has resulted in a number of benefits for first-time buyers and sellers,” said Karayaneva.

Tampa home that recently sold as an NFT on Propy. Source: Propy

On a technical level, Karayaneva explained that Propy is able to do this by selling tokenized LLC properties. The purchase records for each property live on the Ethereum blockchain. Once a property sells, the ownership rights are transferred as an NFT to the homebuyer’s wallet address. Karayaneva elaborated:

“The most recent NFT property that sold in Tampa was purchased using the USD Coin stablecoin. Bidding happened in real-time and ownership was transferred in 15 minutes upon closing the sale, which simplifies and speeds up the entire traditional home buying process. This is important because the U.S. housing market is so competitive today that people don’t have time to wait. NFT properties are also fully transparent, so prospective buyers can make informed decisions by seeing any appraisals, contingencies and anything else up front.”

Given the transparency and fast-paced nature of NFT home sales, Karayaneva mentioned that the concept is particularly appealing to the younger generation. “The two properties we sold in Florida attracted many Gen Z’s since you can now buy a house with the click of a button,” she said. Karayaneva added that older clients have expressed interest regarding how secure this process is since everything is recorded on an immutable blockchain ledger.

Giving homeowners access to their data with NFTs

Blockchain Home Registry (BHR) is yet another Web3 project using NFTs to represent homeownership. BHR is a DeFi platform built on the Ethereum blockchain that allows homeowners to claim a verified NFT of their property, giving them access to a permanent, transferrable historical record of their home. James Rogers, CEO of Torii Homes — a real estate technology company that developed BHR — told Cointelegraph:

“While people today own their homes, they don’t own the data associated with it. For example, a title company often knows more about an owner’s home history than they do.There is an opportunity for the entire real estate industry to collaborate with homeowners to make sure individuals own the data associated with their homes.”

Rogers explained that BHR allows homeowners to claim their home as a verified NFT upon completion of a thorough Know Your Customer (KYC) process. Once verified, homeowners’ NFTs are placed on the BHR platform, which then allows for organizations across the real estate industry to build services by consuming data from the platform. This allows both organizations and homeowners the ability to monetize their data.

Blockchain Home Registry dashboard example. Source: Torri Homes

Zach Gorman, co-founder of Torri Homes, told Cointelegraph that homeowners are able to see all their home documents in a dashboard on the BHR platform. “Homeowners can add and maintain their records over time and can then choose to monetize that data by letting other organizations access it.” For example, Gorman explained that an insurance company could more efficiently quote policies using data about homes listed on BHR:

“At the same time, the data added would inform homeowners about risks such as fire or flood that they could face. And, when another insurance company builds an integration on top of the data added, they would compensate the first company for their data. Even if the homeowner chooses to work with the latter company, the former still wins, as well.”

Gorman added that although BHR just launched on April 26, a number of homeowners and service providers have expressed interest in using the platform. “The power of data has never been put on the table before for homeowners, so this is a huge opportunity to democratize that and put power back into homeowners’ hands.”

Challenges may hamper adoption

While Web3 solutions may help solve many of the challenges currently facing homeowners and buyers, it remains questionable as to how the mainstream will react to these innovations.

For instance, Karayaneva shared that properties sold as NFTs through Propy must be purchased using the USD Coin (USDC) stablecoin, yet this may be challenging for non-crypto natives. Even though Karayaneva mentioned that Propy helps facilitate the transfer of fiat to USDC, users who wish to buy an NFT home may also find it difficult due to the fact that loans cannot be taken out. “Currently, we are only accepting full cash offers, but we are working on incorporating a solution to get crypto enabled mortgages on the spot,” said Karayaneva.

Moreover, getting the mainstream to adopt blockchain solutions may also be complicated. For instance, Rogers explained that BHR is initially launching with MetaMask. Although it’s notable that MetaMask’s monthly average user base is growing, MetaMask and other popular crypto wallets are vulnerable to malware attacks and hacks.

From a technical perspective, it’s important to point out that most of the Web3 solutions mentioned are based on the Ethereum blockchain, which is infamous for high gas fees. Jacob shared that, while using the Ethereum network has been beneficial for Bacon Protocol, the team behind the project has worked hard to hide high gas fees from bHome purchasers. On the other hand, Chu said that he chose to build Lofty on the Algorand blockchain due to its low gas fees. “Lofty sends small transfers to user’s wallets regularly, so if this was built on another chain with high gas fees that would cost much more,” he said.

Finally, it’s important to point out that legal issues may arise when applying NFTs and DeFi standards to real estate transactions. With this in mind, Jacob shared that LoanSnap conducted massive amounts of research when considering the regulatory components associated with a mortgage-backed stablecoin. “LoanSnap is regulated and audited by the state, so we already have regulations in place. The question people ask is if this is a security, but the interesting thing about mortgages is that they are not securities.”

Challenges aside, Rogers said that homeowners and buyers using Web3 solutions like BHR don’t need to fully understand the components behind the platforms, they just need to know that they work. “When I explain BHR, people are interested even if they don’t know much about NFTs and blockchain. The idea here is to onboard new users to the Web3 space and transform the traditional real estate industry. That is what excites us.”

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