On the first day of APE staking, arbitrageurs made the biggest profits.

Source: Ten Articles, ODAILY Daily Planet

For holders of BAYC and its derivative series NFTs and APE tokens, APE staking is the most noteworthy event in the near future, and it also has reference significance for the subsequent development of the NFT industry.

Early this morning, the APE staking smart contract, which has undergone numerous tests and audits, was officially deployed on the mainnet. This also means that the APE staking function is officially online, and users can now start depositing APE through ApeStake.io. Staking rewards will be available for redemption starting on December 12th.

How did the data perform on the first day of APE's open staking? What was the user feedback? What kind of strange news appeared? Odaily Star Daily takes a look back.

Explanation of Ape Staking Mechanism

The APE staking system has 4 token pools, each with different staking rules and rewards:

The first pool is the "ApeCoin Pool". This mining pool does not require users to hold NFTs, and any APE token holder can deposit as many APE tokens as possible into the mining pool.

The second pool is the "BAYC pool". Users are required to hold a Bored Ape in order to participate in this mining pool. In the BAYC pool, users can deposit up to 10,094 APE tokens for each Bored Ape they hold.

The third pool is the "MAYC pool". Users are required to hold a Mutant Ape to participate in this pool. In the MAYC pool, users can deposit up to 2,042 APE for each Mutant Ape they hold.

The fourth and final pool is "BAKC + BAYC or MAYC". This pool is different from the BAYC and MAYC pools because users not only need to own a Bored Ape or Mutant Ape, but also need to own a Bored Ape Kennel Club Dog. Eligible users can deposit up to 856 APE for each Bored Ape/Mutant Ape and BAKC Dog they hold.

Regarding reward distribution, 175 million APE tokens (17.5% of total token distribution) will be allocated to four pools over a period of three years. The first year will have 100 million APE tokens, the second year will have 50 million APE tokens, and the third year will have 25 million APE tokens.

Specifically, for the reward distribution of the four token pools, it will be determined based on the NFT prices in Q4 of the previous year. The "ApeCoin pool" will receive a fixed allocation of 30% of the total reward pool for the year, while the other three will fluctuate based on the subsequent NFT prices. The higher the NFT price, the higher the corresponding APE allocation ratio for the staking pool.

As of now, a total of 5,377,915 APE tokens have been staked. The data for the four staking pools are as follows:

ApeCoin Pool: A total of 1,488,361.1 coins are staked, accounting for 27.6% of the total.

BAYC Pool: A total of 2,792,046.26 tokens are staked, accounting for 51.9% of the total.

MAYC Pool: Co-staked 887,965.84 tokens, accounting for 16.5% of the total.

BAKC + BAYC or MAYC: Co-staking 213,798.2 coins, accounting for 3.9%.

Hidden BUG triggers arbitrage mechanism?

Before the launch of the APE staking function, many big V's on Twitter had already reminded users participating in staking to delist their BAYC and its derivative series NFTs from all NFT markets. Otherwise, if someone buys the NFTs you have listed, you will also lose the APE tokens you staked.

Obviously, this friendly reminder was not widely spread, resulting in the triggering of the arbitrage mechanism within a few hours of the launch of the APE staking function.

According to Pai Shield's monitoring, an arbitrageur borrowed 82 ETH from dYdX through flash loans to purchase BAYC #6762, and obtained 6400 APE tokens pledged as collateral. The arbitrageur sold the APE tokens for 20 ETH, and later sold BAYC #6762 at a price of 68 ETH, earning a net profit of about 6 ETH.

Soon, the arbitrage model was successfully replicated. An arbitrager also borrowed 90 ETH from the dYdX platform through flash loans and purchased BAYC #1633, while also receiving 10,000 APE staked under the NFT. The arbitrager then exchanged the received APE for approximately 9.1 ETH and 23.54 ETH in batches, totaling 32.68 ETH, and sold BAYC #1633 for 65 ETH, making a net profit of about 7 ETH.

Arbitrageurs discovered the vulnerability and made profits, but the staked users of APE suffered losses. The significance of ApeCoin DAO's staking plan is to incentivize ecosystem participants, but there is obviously room for improvement in the mechanism.   

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