GNANA Tokenomics: The Golden Bananas on ApeSwap

The DeFi space is exploding with new arrivals on the scene. New decentralized exchanges (DEX), automated market makers (AMMs), and yield farms seem to be mushrooming all over this ecosystem. Though much younger compared to Ethereum, the Binance Smart Chain is gaining popularity and its fastest rising star seems to be the PancakeSwap.

Challenging this leadership and claim to fame is none other than ApeSwap. With cool-looking apes with sunglasses and bananas, Apeswap is an exciting playground for those looking to monkey around with some banana tokens.

But ApeSwap is more than just a monkey business. It is proving to be a worthy rival to not just PancakeSwap, but also its competitors such as Uniswap and SushiSwap on the Ethereum network. ApeSwap has its own decentralized exchange and liquidity. So it’s not reliant on PancakeSwap. 

ApeSwap can be considered a financial ecosystem of its own where you can do so many activities. - swap tokens, stake them, or farm for yields, try your luck in lotteries, dabble in non-fungible apes or invest in initial ape offerings.

Here’s a short introduction to ApeSwap, and its Banana tokens so we finally get to the focus of this article- GNANAs or the Golden Bananas.

• What is ApeSwap?
• What are BANANA Token?
• What is GNANA?
• What can you do with GNANA?

Let’s dive in!

What is ApeSwap?

ApeSwap is an automated market maker. As mentioned earlier, this multi-purpose DeFi platform is built on the Binance Smart Chain (BSC). So its users enjoy much lower gas fees compared to the Ethereum network. ApeSwap is forked from PancakeSwap.

For more information on ApeSwap, read our Beginner’s Guide to ApeSwap. It gives you step-by-step instructions on how to swap, stake, or farm on ApeSwap.

Suggested reading: The Beginner’s Guide to PancakeSwap

What is BANANA?

The native token on this platform is called ‘Banana’ with the ticker symbol Ticker: $BANANA. For participating in any of the activities offered on ApeSwap, you need these BANANA tokens. You can use them for yield farming and staking. You also get rewarded $BANANAs for staking your LP tokens.

Now that you have a general idea of the BANANA tokens, let's see what GNANAs are and what you can do with them on the ApeSwap platform.

What is $GNANA?

GNANA is the ticker symbol for the ‘Golden Banana’. If you are a GNANA holder, then you are a VIP in the world of ApeSwap.

GNANAs were released, by ApeSwap, in April 2021 to reward its most loyal community members - the true ApeSwap Apes!

Buying GNANA: You can choose to upgrade your $BANANAs to $GNANAs by paying 30% additional cost. Of this 2% is the reflected fee while the remaining 28% is the burn fee.

Value of GNANA: The $GNANA is backed 1:1 by the $BANANA 🍌.

Selling GNANA: If you put up your GNANAs for sale, they remain locked in a treasury fund till someone else comes along to buy them. If you want to buy GNANA and no one seems to be selling theirs (no GNANAs locked up in the treasury) then new GNANAs are minted. And no ApeSwap developers do not own the treasury supply nor do they control it. All the above-mentioned mechanics are regulated by smart contracts.

So when you sell 1GNANA, you get 1 BANANA in return. But when you switch your $GNANA back to $BANANA, you end up losing the extra 30% fee you paid to buy it in the first place.

For example - If you swap 100 BANANAs you will get 70 GNANAs. And when you sell these GNANAs, you get back only 70 BANANAs. So think before you buy or sell them. Know why you are buying the $GNANAs in the first place.

What Can You Do With GNANA?

Ok, So why should I buy these Golden Bananas by spending 30% more when their value seems to be the same as a BANANA on ApeSwap.

Well, the value of GNANA may be set at a 1:1 ratio with BANANA, but that doesn’t mean they are the same. There’s a reason it’s called the “GOLDEN’ Banana. It is indeed more valuable in ways that are totally new to the DeFi ecosystem.

You can go straight to the ApeZone (from the menu options) for activities related to GNANA.

Let’s check out these GNANA activities one by one.

1. Core Governance Token

$GNANAs are being developed as the core governance tokens for the ApeSwap platform. A governance token is a crypto token that represents voting power for specific blockchain projects such as ApeSwap.

In order to remain decentralized, every DeFi project has its own integrated governance tokens to distribute powers and rights to its user community. With governance tokens, you can be involved in vital decisions regarding how the DEX distributes fees, what the development funds are to be used for, user interface changes, and so on.

2. Access to Exclusive Initial Ape Offerings

Golden Banana holders can gain access to exclusive token allocations for IAOs. These Initial Ape Offerings are used for introducing new tokens with the goal of acquiring liquidity for these tokens and thus raise the much-needed funds for growing the platform.

Normally, you need BANANA-BNB LP tokens to take part in IAOs. GNANAs cannot be used for yield farming nor do they have trading pairs. But, in the case of IAO’s, GNANA is valued at 1.389x the current BANANA price.

3. Reflect Tokens for Passive Farming Income

Rather than simply holding your crypto assets in your wallet, why don’t you allow them to earn some passive income? This is where yield farming comes in. When you lock your crypto tokens into yield farms, you get back rewards according to the quantity of tokens locked.

But as I mentioned earlier, Golden Bananas or GNANAs do not have farms. Still, there is a way for you to earn passive income from GNANAs. And that’s by using them as reflect tokens.

Reflect tokens earn back a percentage of every transaction to its holders. This gives people more reason to hold on to their tokens. There is a 2% transfer fee for using $GNANAs as reflected tokens. When you have $GNANAs in your wallet, you get a share of the fees proportional to your holdings.

4. Exclusive GNANA-Only Staking Pools

ApeSwap announced that they will not open up trading pairs or farms for GNANA. But don’t worry, you can still ‘Stake’ your GNANA in pools and earn other tokens in return. This is not just any pool, but exclusive GNANA-only staking pools reserved for the V.I.P Apes.

To stake your GNANA tokens, you can click on the ‘Pools’ option on the left side menu of the ApeSwap website. Now you come to a page with various pool choices. Look for the ones that have a button with ‘Approve GNANA’ (not BANANA or any other token). You have to connect your wallet to view these options.

A much easier option is to head straight to ApeZone from the menu choices and choose any pool given there.

5. Burning BANANA for $GNANA

If you remember, when you convert BANANAs to GNANAs, you pay an additional  30% cost. The vast majority of this fee (28%, in fact) is the burn fee. They burn the BANANAs you offered in exchange.

Note that ApeSwap has announced:

“We may increase the burn fee down the line so get those GNANA while they are cheap!”

Though it sounds like a rather mean thing to do - burning the BANANAs - this is actually a process by which the Apeswap developers remove these tokens from circulation. 

Burning is intended to slow down inflation rates and reduce the total circulating supply of coins. Burning these tokens restricts their supply. If demand for the token increases or even stays the same, its price naturally goes up due to the laws of supply and demand.

Before You Go…

The release of the Golden Banana or GNANA did make the DeFi Apes go bananas. There was indeed a lot of excitement surrounding its launch.

If you are a beginner in the crypto-world, I suggest you stick with BANANA tokens till you fully understand the GNANA Tokenomics. One advantage that ApeSwap has is that it is built on the Binance Smart Chain. This allows you to take advantage of the faster transactions at lower fees, compared to the increasing gas costs on Ethereum.

But switching between GNANA and BANANA is a costly affair, especially if you have no idea what you are doing. GNANA is 30% costlier than BANANA and you lose the extra you invested if you swap it back to BANANA.

If you are into GNANA, then go ahead and buy them. Use your GNANA to earn passive income, stake them in GNANA-staking pools, participate in IAOs and hold on to them for the long term. After all, GNANAs are meant for the V.I.Ps of ApeSwap, the most loyal of the DeFi Apes.