AIP-318: APECOIN DAO Voting Reforms

[SmartAPE]

@badteeth

I understand, but unfortunately without a functional Ape Assembly there is no other way to reach potential voters short of one-on-one outreach.

Yeah, there’s that.

I’d work with SC and GWG to write this process into the AIP you’re putting up to vote. It’s literally their job to protect the DAO and I tend to agree with you that this will become an existential crisis if not properly addressed.

I will add your suggestions to the AIP, and then they are likely to review it during the admin review and ask questions for clarity etc. Engaging them outside of the AIP isn’t a good use of my time because I’m not hopeful that it will lead to any beneficial results. Remember, unlike you guys who all know each other due to tenure, engagement etc., I only know you guys from here; and so I don’t have the influence required to actually bring about change. And for all intent and purposes, I’m still the new guy.

1. The current whales aren’t really the whales. There is literally nothing but social convention preventing any of the launch partners from voting and once they do, a couple million $APE become meaningless when it comes to determining the fate of AIPs. So, would they rather give up some power, that they recognize is for the greater good of the community, or would they rather be rendered meaningless at the whim of an institutional holder? I don’t know the answer, but it’s an angle worth exploring.

While true, you have to ask yourself whether or not you believe that they don’t actually know what’s at stake. I believe that they do. They just don’t care. But that’s subjective, isn’t it? And we won’t know the answer until a well-written AIP such as this one goes to vote.

2. An inequitable voting process disenfranchises DAO members, further centralizes DAO functions, and risks running afoul of regulatory and compliance requirements. While we’re all familiar with HODLing to zero, this would be the most spectacular failure of a culture-based DAO ever. I know our whale holders are smarter than this and doubt they want to go down with the ship so to speak.

Yes that. All of it. And that’s the crux of all this. Though I had been visiting the forums off and on since Feb of this year, only joining in June, I spent quite a bit of time reading, researching and trying to understand the politics at play here. The SC election fiasco alone was worth the lols. And that led me to write the voting RFC thread about a month ago. My conclusion is that there’s neither ignorance nor stupidity at play here.

I am convinced that the DAO wasn’t setup to do most of the things that it’s now embarking on; and that the AIP activity was probably just a cover to keep regulators at bay by operating as a grant-based non-prof. To that end, you fund a few AIPs here and there without adversely affecting the treasury. Rinse. Repeat. It’s not as if all the whales got together and decided that they were going to do this. It’s not some grand conspiracy. It’s just common sense that if the treasury is the basis for your investment and involvement, then it’s in your best interests to preserve it. I mean, c’mon, a DAO that was setup to flourish and prosper by giving away money to “worthy” grants only happens in movies. So, what’s the incentive for actually sticking to that mandate? There is none. Ask yourself this. If the DAO is giving away money and that affects your bottom line, why would you want it to continue giving money away? It’s all so very transparent it’s not even funny. And this situation was created by the whales who, by their very own investment holdings, completely control the DAO’s ability to perform effectively. And the Ape Foundation - which has the ultimate power to fix this - don’t seem in the least bit interested in doing that.

But here’s the thing, I am certain that the regulators at the SEC and CFTC are smart enough to poke holes in that premise. It’s as obvious as daylight that there’s near zero incentive to spend the DAO treasury when in fact it’s the core of the staking (which is basically illegal in the US) and similar activities which lead to yields. And that’s not the fault of the Ape Foundation because they don’t actually control the voting outcome.

Speaking of regulations, you are probably aware that Yuga Labs was reported to be under investigation by the SEC. And my guess is that the Ape Foundation probably has more insight into what’s actually going on with that.

Citation:

"To determine if an asset is considered a security, the SEC uses something known as the Howey Test. Named after a Supreme Court case in the 1940s, the Howey Test defines a security as “an investment of money in a common enterprise with the expectation of profit to be derived from the efforts of others.”

Let’s unpack that. The key pieces here are the “expectation of profit” and the “efforts of others.” ApeCoin was created by the efforts of others, specifically developers who probably spent hours writing and analyzing code.

Once it was released, investors likely bought ApeCoin hoping it would produce a profit. The same goes for BAYC NFTs. People purchased these due to the potential value they would produce."

Basically, the horse already left the barn. And as I type this:

@badteeth

Machi is pressure-testing the voting system in real-time. From an X Space with Frank today: RPReplay_Final1692139742.mov - Google Drive
Needless to say I don’t believe this is what our founders had in mind when they codified, “One APE equals one APE,” and it’s definitely something the SC and GWG need to address.

Someone sent me that via DM and I listened to it. Last evening JonahBlake posted this on Twitter

Jonah and I rarely see eye to eye, but he is absolutely right. When Web3 denizens make fun of the fact that Machi is basically the source of liquidity, they’re only half joking.

The ApeCoin voting system is just like any other Web3 system waiting to be exploited. An AIP isn’t likely to fix it. Only the Ape Foundation has the ultimate power to fix it. Assuming they actually want to. And even so, how do we get them to do it? We don’t have any leverage. None.