The ApeCoin community has been presented with its first set of proposals. There are precisely five AIPs (Ape Improvement Proposals) open to voting by APE holders, two of which aim to modify the structure of the ApeCoin DAO (Decentralized Autonomous Organization), while others seek to introduce a staking mechanism to the ecosystem.
This article discusses the five AIPs, their significance or proposed improvement, and the current voting state.
ApeCoin 5 AIPs explained
AIP-1 basically proposes the structure of the decentralized autonomous organization (DAO). The DAO will be governed by the APE holders, who also can vote and submit proposals in the interest of the ecosystem. The APE Foundation shall also be governed by the DAO, and cannot implement any change, except if voted in favour by the DAO community. So far, about 12 million APE (99.56%) have been committed in favour of AIP-1 at the time of publication.
The second improvement proposal is also for the DAO structure. AIP-2 proposes the voting protocol outlined in AIP-1. It seeks to create the voting infrastructure for ApeCoin holders to participate or vote proposals presented to the DAO. Among other things, AIP-2 aims to ensure that the proposed voting system will not require gas payment, will guarantee transparency, and expand governance participation to all holders of ApeCoin. About 12 million APE (98.88%) were committed in favour of AIP-2.
The third proposal is about the APE Foundation’s budget for the rest of 2022. AIP-3 seeks to allocate 6% of the total APE Ecosystem Fund to activities like events, game & NFT marketplace development, education, marketing, and merch production, to prepare the APE Ecosystem “for success in year 1.” Up to 99.5% of the votes are in favour of AIP-3.
The last two proposals (AIP-4 and AIP-5) have been making rounds the most, as both seek to introduce a staking function to ApeCoin. AIP-4 proposes a staking system for ApeCoin holders and Bored Ape Yacht Club (BAYC) NFT ecosystem, which comprises BAYC, Mutant Ape Yacht Club (MAYC), and Bored Ape Kennel Club (BAKC). While APE holders stake their tokens, holders of the aforementioned NFT collections will also be provided with a pool to stake their NFTs to “receive ApeCoin from a preset pool over a set period of time.”
Hence, there shall be four staking pools made available for these communities – a pool for BAYC, MAYC, and BAKC (but needs to be merged with either BAYC or MAYC) and APE itself. Each of these pools is expected to have an allocated number of APE tokens for reward. AIP-5 proposes a three-year staking period where the rewards start to get progressively lower, except for the ApeCoin pool. About 10% of total APE supply as staking rewards in year 1, 5% in year 2, and 2.5% in year 3.
“Staking models should seed the growth of the related token and NFT ecosystem. They can do this by expanding the audience while incentivizing early adopters and existing ecosystem participants,” reads the document.
However, the staking proposals may need to be revised as the majority of the ApeCoin DAO community has voted against them. At publication time, about 8.1 million APE
(52.8%) were committed against AIP-4, and 7.5 million APE (50.59%) against AIP-5. If after six days staking proposals were not supported, they can be revised and resubmitted for future consideration.
How APE governance works
The governance of the ApeCoin ecosystem lies with a decentralized autonomous organization, which in this case, can comprise of anyone who holds the APE token. “Holding ApeCoin is the only requirement for membership in the ApeCoin DAO,” according to the ApeCoin Foundation, which is the body that oversees and administers the decisions of the ApeCoin DAO.
The board of the Foundation constitutes of five high-profile cryptocurrency investors, Alexis Ohanian Co-founder of Reddit; Amy Wu Head of Ventures & Gaming at FTX; Maaria Bajwa Principal at Sound Ventures; Yat Siu Co-founder of Animoca Brands; and Dean Steinbeck President & General Counsel at Horizen Labs. The board cannot introduce any new change to the ecosystem by themselves, as “participating in idea submission, commentary, proposal submission, and voting is restricted to ApeCoin DAO members.”
What is APE token?
Many cryptocurrency users were hyped last week, following the release of ApeCoin (APE) because Yuga Labs, the NFT company behind BAYC, planned to harness it as its utility token. APE was introduced as the “token for culture, gaming, and commerce used to empower a decentralized community building at the forefront of web3.” Up to 15% percent of the total APE supply was airdropped to the BAYC community.
Currently, APE is down 6.52% over the last 24 hours at the price of $13.40. The token has dropped 66% from the all-time high of $39, which was recorded shortly after the launch. With a market capitalization of $3.7 billion, APE ranks as the 40th largest cryptocurrency, despite it launched seven days ago.