Hi 0xSword and ApeCoin Community,
In additional to @Harry 's thread above, here are FAQs from the community in the previous proposal:
1. Is there any accounting for longstanding holders who may have been looking for an opportunity like this?
Everyone has a fair opportunity to submit projects on Ape Accelerator. Team experience, product, tokenomics, business model sustainability, and utility are all important criteria for project evaluation. BAYC and MAYC long-standing holders would be considered higher credibility than non-BAYC/MAYC holders. It will be up to the DAO members to conduct due diligence and vote on which project to proceed forward.
2. How to differentiate a project that should be submitted via the standard mechanics on Discourse, from a project that should be proposed in the Launchpad?
The current AIP structure sticks around for branding-type projects, and is more generic that covers decisions for ecosystem fund allocation, brand decision, process, information that don’t involve staking $APE or using $APE. While launchpad is aimed to bring the Ape community exclusive access to various web3 native projects before other communities. With the Ape Launchpad, we together as a community can contribute, fund, and empower the growth of the ecosystem.
3. Why give the initiator the “option” to raise in $Ape or other token,instead of ApeCoin only?
The current plan requires launchpad projects to raise a % of funds both in $APE and stablecoin. This is designed to reduce the selling pressure of $APE after the launchpad sale, and lower market price volatility of $APE. Explanations as follows:
Reducing sale pressure: Projects conduct launchpads to raise funds to support their business operations, and owing to the volatility of $APE many projects will choose to immediately sell the raised $APE in a large volume which will increase further sell pressure. Allowing projects to raise both in stablecoins and $APE (fixed % of both) will allow them to immediately fund their operation through stablecoin and also provide an incentive to hold the % of $APE they received and further integrate into the APE Community. Asking projects to lock tokens/vest $APE is a potential solution but this can detract good quality projects who need liquidity to grow from wanting to participate in the launchpad.
Price volatility: Since the $APE price fluctuates daily, whenever there is a new launchpad sale the amount of $APE required for purchasing each project token/NFT on the sale date (which will have an indicative $ value assigned to it by the project) will vary. This means that if the $APE price drops by 10%, participants suddenly require 10% more $APE to purchase the NFT/Token on the day. Giving users the option of purchasing using $APE or stablecoin on the day will ensure a better user experience, and of course the $APE token entry requirement remains in place either way and it’s this that is the primary driver for healthy tokenomics.
In terms of what percentage of launchpad sales are raised using $APE, it will range from 30%-100% depending on the $APE’s performance which is primarily driven by its utility. As more projects are introduced to the APE ecosystem by Launchpad, $APE will have more use cases, not to mention upcoming launch of Otherside. We are looking to increase the ratio of using $APE to stablecoin, or $APE only for launchpad sales in the future, if $APE becomes the fundamental token with a stable price.
4. Voter Incentive misalignment
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.
5. Usage of $APE profits that goes back to DAO?
Regarding the use of collected $APE, we proposed 3 solutions, including burning, donation to charity, and sending to a separate multi-sig wallet for other use (for example routing into other DAO initiatives). AIP-124 is definitely an interesting option we would to explore. We are open to community feedback and may require an AIP to ensure the decisions are fully aligned with the desires of DAO!
6. Commission Breakdown
Revenue generated from launchpad is commission based on the amount of funds raised by projects through the platform. For reference, the raised amount typically ranges from $100k to $1M. The industry standard commission ranges from 10%-17%.
Ape Accelerator will charge projects a total commission of 15%, with 5% allocate to Forj, ~0.5% goes to voters. The remaining portion after total commission is deducted from operating expenses, operating commissions and voter commissions(excess profit) goes to a multi-sig wallet which can be burned, or routed to other DAO initiatives based on community voting.
7. 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.
8. How to cover operating expenses 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 allow us to cover the Ape Accelerator’s ongoing operation expense. [Public] Ape Accelerator Financials
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.
9. What is the “Launchpad Allocation Ask: 25% of total Ape launchpad allocation”, and how it’s part of Overall Cost?
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.
Best,
Forj Team