AIP-141: Ape Accelerator By ApeCoin

The finalized draft looks really good. I feel that Forj has done a great job collaborating and contributing to the community, both DAO & greater Yuga ecosystems. Looking forward to seeing how this helps grow projects like OthersideGangs & Mutant Cartel. I really like how it gives utility reward for staking. Very creative!

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Thanks 0xSword! We updated IP Ecosystem Map of Yuga Labs this month an hour ago. Over the month I get to chat with many founders to find areas of value add. It’s been four months we have been doing the research and we are proud to see the DAO is growing with the ecosystem altogether.

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This all looks like exciting stuff. Great job @Forj and @Harry !

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Hi ApeCoin DAO Community,

Our team has reviewed and discussed @Forj’s AIP Draft and have sent a list of initial questions. We await answers.

Follow this Topic as further updates will be posted here in the comments.

Kind Regards,

-Pearson

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Hi ApeCoin DAO Community,

@Forj has responded to our questions and they are in our review once again.

Follow this Topic as further updates will be posted here in the comments.

Kind Regards,

-river

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Hi ApeCoin DAO Community,

We have sent a list of follow up questions. We await answers.

Follow this Topic as further updates will be posted here in the comments.

Kind Regards,

-Pearson

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I love the idea, promoting and partnering with community projects makes a ton of sense. I do have one worry, though:

If a proposal is approved, voters will share a percentage of commission from the sales by Snapshot.

If we pay voters by sales share, we’ll also be encouraging votes for pump-and-dumps and rug pulls. We will need to make sure that the launching projects can be held accountable if that’s the case.

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Hi Bassen, good question!

Paying voters with revenue share is designed to encourage the community to conduct their own due diligence and select best projects to launch on Ape Accelerator. 100-200 voters will be randomly selected from all voters and share the 0.5% to 1% of commission in $APE token to avoid any complications around currency conversion rates etc. The commission comes from the sale conducted in $APE. This way, we ensure fairness and no voter gets large rewards.

How would the voters be chosen?

  • We will use snapshot dot org’s function to export a CSV file. A random function on the CSV, plus video would allow us to select these random voters.
  • Voters who receive $APE voting reward can use the token for the next Ape Accelerator sale. In this way, we create a healthy token flywheel to avoid pump-and-dumps.

Regarding holding launching projects accountable to avoid rug pulls, we have a due diligence process that scrutinizes projects and makes sure the team is reliable。

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Hi ApeCoin DAO Community,

@Forj has responded to our questions and they are in our review once again.

Follow this Topic as further updates will be posted here in the comments.

Kind Regards,

-Pearson

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Hi Forj,

Thanks for putting in a LOT of work on this. Developing a pre-sales mechanism to promote $ape usage and encourage more community participation is a very good idea. I’ve gone through both the deck you provided as well as the proposal here. The screenshots provided look amazing (Mutant Cartel Dogs!).

With my VC hat on, I had a few questions regarding the economics of the proposal that don’t seem to have been discussed yet. I’ve tried to construct a mini Profit and Loss account below, to get an idea of ongoing operations:

Income:

After the initial grant of $480k, does the 5% commission become the source to fund ongoing operations? (There is also % of commission from sales on Ape Launchpad, range from 10% to 15% mentioned in the body of the proposal)

Based on your experience with other launches, what level of income from commissions would you estimate monthly? ($100k-$1M is referenced above, but is that per project, per month or per annum?)

Costs:

There seems to be a $50k unallocated cost in the total of $480k:
$250k Development cost
$180k operation cost
= $430k.

How is additional $50k allocated?

After the initial build and six month period, will the project be self funding? That is, will the project generate $30k income per month?

What happens if there is a funding shortfall?

There is a % of the commission shared with voters if the proposal gets approved, range from 0.5% to 1% that seems to fit in here as well.

Net Profit:

Assuming the launchpad will be profitable, what happens to excess profits? (Gets burned, goes to a community wallet) Rerouting into other DAO initiatives has been mentioned (@Amplify) but it seems undefined still.

Finally,

I don’t quite follow what this allocation is, and how it’s part of Overall Cost. Could you talk about this point in more detail?

Thanks for clarifying, and for putting in what is clearly a ton of work in to build this proposal!

Jason

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Following along on this one. Very intriguing

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Blockquote
It’s been a while since we’ve seen Gerry — their last post was 8 months ago.

Welcome back, @Gerry :+1:

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Hi Jason,

Appreciate the feedback. Happy to do the breakdown on the cost here.

Given we are proposing Ape Accelerator and there will be constant improvement , there will be
[1] an admin panel on CRM updates for upcoming, live, past projects
[2] Iteration from analyzing web duration to enhance the experience
[3] Iteration from participation and community feedback for tier requirement
[4] Landing page that package the successful launch to attract more founders submit application

10ktf (now part of Yuga), by WENEW, invested by Animoca Brands, has done an excellent job on UI/UX, storytelling to enhance high level of engagement. We have written the home page timeline to reflect the success.

To address your question, we are not able to edit the proposal number above, it is supposed to be $300k for development cost. Below is the breakdown:
$300k Development Cost

  • UI/UX design - $40k
  • Front End - $90k
  • Smart Contract Development - $90k
  • Contract Deploy & Audit - $80k

$180k Operation Cost - for the first six months($30k per month)

  • Team members:
    • 1 product manager
    • 1 Front End Developer
    • 1 designer
    • 1 operation associate
    • 1 business development
    • 1 marketing associate
  • website maintenance/snapshot/airdrop
  • Provide monthly project updates

Where will the 25% allocation go? That is a good question.
Allocation: 25% of total Ape launchpad allocation
This is the allocation for Forj Launchpad. Forj has launched 20+ projects in the past. It helped many Animoca portfolio projects launched successfully including Altava, Phantom Galaxies.

For the selected projects, we will have

  • Animoca Brands ecosystem audience to participate
  • The more audience participate for a Web3 project, the more diverse audience it would be
  • We are looking to expand Web3 IP beyond apecoin, Yuga ecosystem
  • Below you can see the network effect how Animoca Brands ecosystem projects are contributing to the success of Cool Cats ecosystem

Forj team will answer the following:

  • Income from commissions would you estimate monthly
  • After the initial build and six month period, will the project be self funding? That is, will the project generate $30k income per month?
  • What happens if there is a funding shortfall?

Let me know if you have further questions!

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Hi Harry,

Very helpful breakdown, and very clear on the cost structure. Thanks for going through that!

Understood now. It’s great that you want to hang onto launchpad slots - you’ve worked with some great projects :mechanical_arm:

I’ll keep an eye out for Part II.

Thanks again for putting the proposal together - it’s clear you and the Forj team have put in a ton of work!

Jason

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Hi @Forj, first of all, thanks for putting this together! Totally agree with the need for support for builders in the ApeCoin ecosystem and I have a deep appreciation for how Forj has helped Yuga Labs’ growth so far :fire:

Also great that you’ve engaged already @0xSword. That opinion is obv worth a lot :slight_smile:

In my previous life at McKinsey, I was involved in building several start-up accelerators / venture incubation units for some of the world’s leading companies.

I’ve seen too many of these fail so badly that they eventually became memes, so I’d really love to help solve this one!

Open Questions

Reading through the proposal, I have some questions that I would like to hear your opinion on. Maybe this has all been thought through, maybe this will help avoid some mistakes:

1. Voter Incentive Misalignment:

I fear voter incentive misalignment for two reasons.

a. Financial incentive for every Yes:

Blockquote
If a proposal is approved, voters will share a percentage of commission from the sales by Snapshot.

b. Entertainment/Ecosystem incentive for every Yes:
As a community member, my natural incentive is to see as many projects as possible built on ApeCoin.

Both of these lead to the question: What mechanism do you plan to integrate to prevent that „Yes-Bias“ here and have the Voters act as a real quality filter?

2. Quality Filter for Launchpad Projects:

The risk of diluting the quality of launchpad programs is real. We have seen this with the Magic Eden Launchpad, Polkastarter, etc.

Since you as Forj have a financial incentive with every project on Launchpad, how will you prevent this?

3. KPI setting post proposal vote

Maybe I understood it wrong, but are you proposing to define your own „KPIs for each department“ after the proposal went through? How would that work?

Thanks again for all the great work that went into this! Looking forward to hear your answers and help out if any of this is unsolved :pray:t3:

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Hi Jason,

Thanks for sending all those great questions! In addition to the answers that Harry sent above, here is the summary:

  1. How to cover operating expense after the initial 6 months?

After the initial 6 months, $30k operating expense is funded by excess profit accumulated in the DAO-controlled wallet instead of Ecosystem Fund or 5% commission. As the financial projection stated below, the DAO excess profit will allows us to cover the Ape Accelerator’s ongoing operation expense. [Public] Ape Accelerator Financials - Google Sheets

Under realistic scenario - assume 1 project launch per month, raise $400,000, and Ape Accelerator receive 15% commission($60,000). In the first six months, after paying operation commission and voter commission, $38k profit is sent to the DAO controlled wallet each month, which will be used to fund future operation expenses.

  • DAO controlled wallet has an ending balance of $228,000 after 6 months that can sustain operation for the next 7 months.

We will continue to update the DAO on progress against this business model, and of course will remain vigilant of any impact from adverse market conditions. After 6 months, depending on the performance and market conditions, in the case of funding shortfalls which is unlikely to happen, we may submit an additional ecosystem funding proposal to the DAO.

Operational expenses are still incurred even when no projects are launched, as the team is constantly looking for high quality projects, incubating these projects through investment of time and resource, and maintaining/ engaging with the Ape Accelerator community. Our team will show monthly progress on project development.

  1. Commission Breakdown

Ape Accelerator will charge projects a fixed total commission of 15% to all projects.

  • 5% operating commission + the $30k operating expense covered by DAO will allocate to Forj
  • ~0.5% commission of total sales goes to voters
  • The remaining portion after total commission is deducted from operating expenses, operating commissions and voter commissions(excess profit) goes to a DAO-controlled wallet which can be burned, or routed to other DAO initiatives based on community voting.
  1. Projected Income

The sales revenue (total raised amount) per project is $100k-$1M. The BD team is aiming for two projects to be submitted to Ape Accelerator per month, and it is likely we will then have 1-2 projects launched per month. However, much depends on market conditions and community engagement on project votes. Given a commission of 15% charged, we would expect a total commission revenue range of $0k to $300k per month, a net profit of $30k- $160k if self-funded. Please see the revenue projections for different scenarios below. Ape accelerator can breakeven at $47,368 monthly commission revenue.

  1. Total Ecosystem Ask

The total ecosystem ask is $480k, with $300k in development and $180k operation cost for the first 6 months.

$300k Development Cost

  • UI/UX design - $40k
  • Front End - $90k
  • Smart Contract Development - $90k
  • Contract Deploy & Audit - $80k

$180k Operating Cost - for the first six months($30k per month)

  1. Usage of profits that goes back to DAO

After covering all the operational expense and commission, any excess profits goes back to a multisig DAO-controlled wallet. Then it will be up to the community vote on whether it is burned, donated to charity, or directed to other DAO initiatives. An AIP of profit use may be needed to ensure the decisions are fully aligned with the desires of DAO.

  1. Launchpad Allocation Ask

Assuming a project wishes to raise $800,000 in Ape Accelerator, they will need to reserve an additional 25% allocation of the amount raised in Ape Accelerator to be sold via the Forj Launchpad ($200,000). As a primary Launchpad within the Animoca ecosystem, the Forj Launchpad would bring large additional interest and attention to the project. This added investment further fuels the level of funding possible for these projects and in turn increases their likely success rate in strengthening the BAYC ecosystem. Furthermore the additional marketing attention throughout the Animoca ecosystem gained via Forj Launchpad’s own campaigns/audiences will help drive new participants to the Ape Accelerator.

Please let us know if you have other questions!

Thanks!

Best Regards,
Forj Team

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Would be happy to participate in your UX design test as participant when you come to this stage — both as a user and as an expert, I can help your designer with, say, quick heuristics evaluation / adjust the test scenario / etc (yup, both based on what you need more — I can “turn off” the designer mode, haha. I’m a UX specialist by primary specialization)

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Hi Bernard,

Chas from our team previously work for KPMG, me and Rob has been heavily involved in Brinc Accelerator as mentors. Happy to address these questions:

Forj are experts in incubation of Web3 projects and our model for the economic success of the Ape Accelerator is defined by the success of the projects we help incubate and launch. Simply put, it’s not in our interest to propose projects to the DAO that are not (in our opinion) highly likely to succeed, and for that to happen they need to have a sound strategy, tokenomics/economic model, and clearly benefit the BAYC community ecosystem.

In other words the DAO vote is not designed to be the judge of whether a project is of sufficient quality or whether the business is viable, as that level of due diligence is exactly what Forj is adept in. Instead the DAO vote is designed to gauge whether the community wish to support its launch and whether they would be interested in participating. A ‘NO’ vote would essentially prevent an unsuccessful launch taking place.

We understand the concerns around positive vote bias and we would prevent this through two mechanisms:

  1. Rewards would be randomly distributed between 50% of YES and 50% of NO votes.

  2. Where a NO vote has taken place rewards would be halved for the next YES vote, with the other half being distributed to the previous vote participants (randomly, as above). This halving would continue for as many NO votes as may occur, essentially ensuring that there is no benefit to any one party of voter (YES or NO), and the 50% random distribution ensures there’s also no guarantee of rewards to prevent participants ‘gaming the system’.

Note on Increasing Governance Participation

Good question!

Polkastarter, Magic Eden are within Animoca and Forj’s partner network. Polkastarter in bear market has spent more time in education, rather than launching new projects. Forj’s thesis is bear market is quality over quantity.

Summary:
:mag_right: [1] Experienced Team To Vet Projects
:trophy: [2] Case Study on a Recognized Community Project
:gorilla: [3] Track Record of Commitment on Contributing To BAYC IP Growth
:ballot_box: [4] DAO Decision on Projects To Proceed Forward


:mag_right: [1] Experienced Team To Vet Projects
Rob, COO of Forj, spent 6 years advising startups at the DMZ, the number 1 ranked University-based incubator in the world. Harry and Rob are mentors at Brinc and responsible for due diligence for Animoca investment team.

Forj conduct DD on the following

  • Team: advisable, experienced, resilient, track record of contribution
  • Product market fit: product, demo ready to add value to the ecosystem
  • Early validation: recognize by community members
  • Valuation of the project: fair valuation in bear market
  • Value add to apecoin: strong synergy with apecoin, Yuga IP to add strategy value to the ecosystem

Forj’s pass rate is less than 5% for the initial interview stage. Only 3 projects were launched in Forj Launchpad in 2022, but each project was successful.

Launched 20+ projects in the past, with successful launches in the bear market, such as Altava, Phantom Galaxies gave us the experience to filter quality of the projects.

:trophy:[2] Case Study on a Recognized Community Project
Ape Accelerator is responsible for project coordination. Mutant Cartel’s 10k Hounds is the example given in the deck. Lior and his team have checked all the boxes above.

This is an example of Brinc Acceleator’s latest cohort where we worked with teams like Smobler Studios to bring Neymar’s BAYC to Open Metaverse. We’ve validated Smobler Studios through collaboration, continued to work with the team.

:gorilla:[3] Track Record of Commitment on Contributing To BAYC IP Growth
Harry and the team have been chatting with project founders in this map weekly. We track consistent updates, provide guidance for the founders, share insights and best practice on Binance Live to inspire builders to utilize Web3 IP to grow their projects.

OG Collective, Mutant Cartel, Kingship, Otherguild, 10ktf, ApeComms are some of the ecosystem projects that can provide reference to Forj team’s dedication to the BAYC ecosystem, the dedication to put BAYC ecosystem growth as #1 priority.

:ballot_box:[4] DAO Decision on Projects To Proceed Forward
Finally Forj is NOT the final decision maker, the Apecoin DAO participants are here to vote for which projects they would like to support and participate.

These are the roles that are responsible for product, business development and acceleration

  • 1 product manager
  • 1 tech manager
  • 1 designer
  • 1 operation associate
  • 1 business development
  • 1 marketing associate

We have provided low, realistic and optimistic scenarios on project raise, participation in an excel table, see reference above that answer @jasonball 's questions. Given the nature of the market and our strict parameter for due diligence, we do not expect high rate of passing. In Q1, we would spend more time on operations and strategic partnerships to support cohorts to get to product market fit before launch in the Launchpad. Long term sustainability matters more than one off success. This sustainability comes from active participation beyond apecoin community. It also comes from ecosystem support from tools, platforms, lore, creative studios, brands and passed AIP projects where we experience win-win as a group.

We have to use reference for Cool Cats FC as an example again. This is the collaboration win for the Web3 ecosystem.

Let me know if you have further questions.

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A lot of work and thought has gone into this proposal and the Forj team has been super transparent and communicative - well done.
I think this is exactly the sort of idea that helps build the ecosystem in a meaningful way. Two quick thoughts:
-Similar to @themetavince I think that a criteria should be that launchpad projects MUST integrate APE.
-I know voters are required to do their own DD but given there is a commission share and that it is on a platform endorsed and funded by the DAO, I am guessing this will need some legal review to make sure on KYC/Qualified investor type issues
Thanks for all your work on this
ST01C

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Hi @StoicDegen,

Glad to have you here. When you see we are answering your questions over the Thanksgiving Weekend, you know how dedicated we are for this proposal and ApeCoin Ecosystem. Let’s discuss the first question in depth. Second question will be answered on Saturday or Sunday.

This is a good question. This question leads to a bigger question ----

How can we maximize the utility of ApeCoin in Ape Accelerator?

  • The participation itself required staked ApeCoin to qualify from platinum to public tiers
  • Given the nature of the project it needs fiat to pay for payroll for their team, and we are in the bear market, the concern for project founders is that if $ape drops further, they would not have enough fund to cover run rate.
  • This means partial of the received $ape would have to convert into stable coin.
  • So let’s take a step back on what increase the usage of ApeCoin in the long term
  • We can take a look at The Sandbox token usage here, as they are the current leader in the open metaverse space with over 200k monthly active users in Season 3.

The Sandbox Network Effect

We can see the following token utility

  • Governance: the need for ApeCoin to vote on creative decisions in sub community
  • In-game assets purchase: to have a better gaming experience
  • Access: access exclusive area at a premium
  • Service: pay service providers in exchange for services such as land development

What would it look like for ApeCoin?

  • More utility attract to more audience to engage
  • More audience lead to more token holders
  • More token holders lead to higher token demand

There are 2 key factors that would increase token value of ApeCoin

  • Driving new adoption of ApeCoin holders
  • Creating new scenario to use ApeCoin

So how can this be achieved in a practical scenario?

  • Let’s take a look at the scenario shared below for Bored & Hungry :hamburger:
  • We use this example because it is widely recognized by Web2 media & Web3 community
  • Its extension, Food Universe, is also supported by Snoop Dogg
  • This is a post Forj Research team has made earlier this month:

Two paths That Drive ApeCoin Adoption for Bored & Hungry

  • B2C: sell burger in $ape
  • B2B: spend $ape in ApeCoin ecosystem to grow the business

:mag:What is happening here?

  • [1] B2C path: consumer pay $ape to get burgers
  • [2] B2B path: Bored & Hungry reinvest earned $ape to grow the business

:hamburger: B2B path breakdown

  • Bored & Hungry sells burger and fries in $APE
  • They spend $APE on creative guild to build food experiences in Otherside
  • This experience is free for exclusively for ApeCoin holders and past burger buyers
  • Bored & Hungry has partnered with McCain Foods, Web2 company with 20k+ employees, $6.8B in sales, to create unique Web3 burger experience
  • The premium area requires game pass that is paid in $APE
  • More users buy $APE to access the VIP experience
  • Tens of thousands of McCain Foods fans get to know about Bored & Hungry and BAYC IPs
  • $APE gets adoption, demand goes up, value goes up
  • Note: above B2B path is an example, it is not realized yet until Ape Accelerator establishment

:department_store: From Bored & Hungry to IP Driven SMEs

  • Bored & Hungry is an iconic example that represent small and medium enterprises (SMEs)
  • This model applies to food, beverages, fashion, sports SMEs
  • The path where SMEs reinvest their earned $APE to grow is key
  • Reinvestment of guilds, tools, platform, artists establish brand equity
  • It paves path for new commercial activation in The Otherside
  • It attracts more builders to come to the ecosystem to build
  • Ultimately it drives mass adoption and usage of ApeCoin

:building_construction: :man_construction_worker: :construction_worker_woman:Reinvest in Builders

In Ape Accelerator, we focus more on B2B side, given the nature of treasury holding of $ape from initial sales. Instead of having funded projects to sell $APE to convert into stable coin or ETH, we guide and coordinate ecosystem projects to work together to use $APE for

  • Brand building
  • Lore development
  • Open metaverse development
  • Native marketplace development
  • Multiverse interoperability

By doing this, we create ApeCoin network effects and project synergy. See slide #11 and #12 from our pitch deck that highlight this relationship.

See our Twitter Thread on the example of Mutant Cartel’s upcoming Mutant Hounds by @lior.eth

As an official publisher and agency at The Sandbox, builder of the first ever official BAYC experience, we recognize content is king. We also recognize investing into diverse builders to build great content lead to audience retention in open metaverse.

In summary,

  • Integrate $APE in the Launchpad sale would experience short term fiat conversion.
  • Creating a strategic network coordination that use $APE to reinvest in ecosystem service providers is key
  • It would lead to long term project growth.
  • It would drive long sustainability for ApeCoin.
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