AIP-318: APECOIN DAO Voting Reforms

[bigbull]

That is not what Yat said. He said the multiplier based on human capital component should be capped.

[badteeth]

My suggestion if you want voting reform to happen is to gather up a list of voting system options and have discussion with the greater community around which make the most sense.

Then test different systems prior to full scale change, with the OKR being approval of AIPs that create use cases and add clear value to the ecosystem.

Then put a few of the most promising options to vote as multiple choice along with a none of the above option.

In order to convince whales to sacrifice some of their perceived power, you’ll need to get them to understand that creating a loop of equitable voting empowering meaningful grants that add use cases and value to the $APE ecosystem is in their best interest. Which of course it is, because the more we decentralize $APE the stronger we become. It’s a tough but valuable road - thank you for taking this on.

BT

[12GAUGE.Admin]

Hi ApeCoin DAO Community,

@SmartAPE has requested to extend the community discussion period for this AIP idea. This topic will automatically close a further 7 days from now. We encourage the community to continue to engage in thoughtful discussions through constructive criticism, honest feedback, and helpful suggestions.

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

-@Facilitators

[SmartAPE]

@badteeth This thread was already ready to go do draft, but then I saw your post and requested that it be re-opened and extended a further 7 days because, after all, there’s no rush. Even though I believe this will likely fail - in every iteration - I want to ensure that I do my best, while reviewing all suggestions in order to find a middle ground of sorts.

@badteeth

My suggestion if you want voting reform to happen is to gather up a list of voting system options and have discussion with the greater community around which make the most sense.

I spent over a month pondering this voting issue before I created the AIP. Not sure how else I should engage the “greater community”. I am neither in the mood nor in the least bit interested in chasing people down for something that is of tangible benefit to the community they claim to belong to. They’re either interested or they’re not. I’m not doing Spaces. I’m not doing Discord VC. I’m not Tweeting anything related to it because I tend not to engage in time-wasting ventures because I tend to be very efficient with my time.

The fact is that there are many - many - posts and discussions about the general dissatisfaction with the DAO voting system. In fact, AIP-1 passed on Mar 30th, 2022, with this very same voting mechanism in place. Yet, all this time, literally nobody - nobody - thought to create an AIP to revise and make it better. Why? Because people tend to be complacent with the status quo if it remains unchallenged.

Having spent a good part of my lifetime in various communities which have either risen or fallen, it was immediately clear to me that the prosperity of this DAO lies in the revision of the voting system so that people can find a reason to engage and be assured that their vote counts. I have been harping about this since I got here; and that’s why I decided to do something even though I know that the odds are stacked against me. Which is probably the same feeling that has prevented someone else from trying to pull this off.

Then test different systems prior to full scale change, with the OKR being approval of AIPs that create use cases and add clear value to the ecosystem.

Then put a few of the most promising options to vote as multiple choice along with a none of the above option.

Right. So, how am I supposed to do any of that? Or do you mean this can/should be done in coop with the governance WG and/or SC - who have access to the voting backend systems? Even so, that would most likely require yet another AIP because I am all but certain that sending them a nice message isn’t going to cut it. I mean, it’s not as if they’re not already aware that people are in fact unhappy about the voting system.

In order to convince whales to sacrifice some of their perceived power, you’ll need to get them to understand that creating a loop of equitable voting empowering meaningful grants that add use cases and value to the $APE ecosystem is in their best interest. Which of course it is, because the more we decentralize $APE the stronger we become. It’s a tough but valuable road - thank you for taking this on.

I doubt that’s going to work. I mean, it’s not as if they’re not already aware of those things.

Human nature is to cling onto power. It’s a simple primeval instinct. And in order to relinquish such power, even to the extent of compromising for the greater good, tends not to yield the expected results because people in a position of power have zero incentive to relinquish that edge. At least not without getting something back in return. Entire studies have been written about this, but I won’t go off-topic by citing them.

So, while the simple incentive that you laid out makes sense and it’s targeted for the greater good, you’re missing the other half of the equation which is the part where whales get to ask themselves, why would I do this? They’re already aware of everything or anything that you and I can come up with in our pursuit of fairness. But we have nothing to offer in return. Nothing. So, why would they vote against their own best interests which is from the basis of power?

In board rooms where shareholders with a majority tend to act in the best interests of the corp, this battle is no different. Except that most votes that affect the corp in meaningful and/or detrimental ways, tend to make majority shareholders think twice before flaunting their power in an adverse manner. And it’s precisely why such shareholders tend to get sued - regularly. In a DOA such as this, we do not have any leverage. None.

To wit: The main driving force is the spending of the DAO treasury. Most - if not all - whales would rather not spend it because it affects their staking. That, right there, would normally get any board shareholder sued so fast because it would be illegal to engage in anything that holds a board shareholder’s position/interest over the corp. And that’s when you even set aside fiduciary issues. But we have zero recourse or leverage here.

Here’s the thing. There was no AIP that determined the voting structure. AFAIK, it just happened. A group of people, got together, laid it all out - and came up with this voting system. So, it seems to me that the Special Council and to some extend even the Governance Working Group, have the power and authority to change the voting system. No AIP needed. And they already showed this flex over the much discussed abstain voting issue. To that end, and with this authority, they are in a better position to put your suggestion above to the community, run some tests based on what I have outlined here in the AIP, and come up with a common ground in order to create a better voting system. But ask yourself this: what incentive do they have to do it? My guess? None.

My AIP will fail, we know this. But at least it will remain as a testament that someone tried to do something. But I want to go on the record and say this again: If the voting system doesn’t change, this DAO is going to die a slow death even as the treasury bleeds out from the monthly expenses and inconsequential AIPs which do nothing - nothing - to help save it or move it toward prosperity.

[SmartAPE]

I wanted to add something to this.

At issue - at least from Yat’s position, a 1 person = 1 vote system can easily be gamed and/or will lead to the demise of the DAO. I wholeheartedly - and without reservation - disagree.

I believe with that simple concept as a starting point, it goes a long way to building confidence in the voting system; and in turn, will likely lead to more engagement. And guess what that does? You guessed it, more people here and outside the community will be incentivized to create meaningful AIPs.

When I see some of our friends here Tweeting that others should come to this DAO to build something and that it only costs 1 $APE, I just resist the urge to respond. I mean, everyone not in this ApeCoin bubble is laughing at us. Why would anyone of sound mind and body come here - to build anything - when the odds are already stacked against them due to a highly deficient voting system which, regardless of how great their AIP is or how it benefits the DAO, they’re likely to fail? No serious builder will bother. This is an absolute fact as demonstrated by the fact that our DAO is currently stagnant, like a deer caught in headlights.

I mean, go look at the crop of builders who have come through here with their AIP and see if you can come up with five - just five - that had it pass, and it had some tangible benefit to the DAO. I came up with just three. And yes, I have an entire spreadsheet of every AIP that’s come through here, including their disposition, requirement, targeting etc.

Let me repeat that:

THREE

Below are Yat’s suggestions about a cap on $APE holdings without taking it away entirely. The emphasis are mine.

What I would propose that we could consider is the principal of having a stake which means that instead of removing voting power we can enhance voting power with caps for committed community members because they have demonstrated and worked is earned their stake.

For instance a member who has been active for a year might get +X token voting power or a multiplier of 1.1 or 1.2x as a hypothetical example (probably a cap may be needed) It creates a dynamic that you can earn your voting power rather than just have anyone join at a cost of a few dollars and vote the same as someone who might have invested significantly. This creates in my view a better sense of shared equity amongst all DAO members as you either buy or work your way into the DAO in a sense.

In that sense a stake in capitalism represents both earned (labour) and owned (capital) and I believe we need to strike a balance between the two for it to be successful for the DAO hence my proposal to have a kind of “earned” structure to complement the capital structure not its wholesale elimination which is what you are suggestion. In removing any reason to have a meaningful capital incentive (i.e. a holding of APE in this case) doing you are removing the capitalist incentive which I believe is essential for the DAO to be sustainable.

Pure token holdings isn’t optimal either but provides a simple mechanism to provide a public defense that is auditable with rules that are at least simple to understand that are not subject to the same sybil attacks because it requires substantial cost to do so, for the time being.

I believe the mechanism that I introduced maintains the element of both labour and capital, you need both and the ratios can be determined to create the right incentives for it to be sustainable in my view.

it is certainly an interesting idea to give people higher voting power if they stake their apecoin because it demonstrates commitment although that might mean the commitment needs to be somehow time demonstrated too because you can just as easily unstake

I understand the rationale behind this idea and honestly support many aspects of it. However, it is my opinion that such a system will either be gamed, or have a high enough barrier to stop it from being gamed, but instead suppress an already incredibly low voter turnout. For me to support such an idea, I’d need to be confident that both of those concerns would be addressed.

Which brings me to this: As a math guy, I see a lot more in numbers than most people do. I believe that Yat is of the same mindset given his background.

That said, I absolutely do not see the benefits of the above because then, 1 voter holding 500 $APE is still a whale when you consider that the average 1 voter holds 1 $APE.

If we do this, we’re still creating a system that is still governed by whales. The only change is in the number of allowed $APE whereby a whale with 1M $APE is capped to say, 500 $APE based on a formula (which I already wrote and have btw). So, now you end up with 17 whales voting with, say, 2M $APE, vs 17 whales voting with, say, 100K $APE.

Guess what happens when an AIP goes up that said whales are against. Yes - the results will remain the same. And that will only change if the number of regular voters are significant enough to be adequately weighted against the influence of whale voting power. And from the looks of the voting engagement - which Yat himself yields to - we don’t [yet] have the numbers to make any weight consequential to the vote.

Right. Then what?

Finally, the argument about doing it the way (based on shareholder holdings) it’s done in the boardroom fails because in the boardroom there are tangible RL consequences and remedies against various actions taken by shareholders. We do not have that here in the DAO. Unless some enterprising attorney joins the DAO with 1 $APE and promptly sues the DAO for racketeering or some similar bs. At which point, the DAO is likely dead before it even gets to discovery.

[Rubinato]

@0xSword

If we’re going to be messing with vote reform, lets do it right and make it 1 BAYC / MAYC = 1 VOTE. Can token-gate these idea channels for higher quality conversations also.

If so, it wouldn’t be a DAO, it would be a private club.

[Rubinato]

I don’t see many problems like that in the current voting system, I think it’s very democratic, also with the issue of voting delegation etc…
members need to work hard over time to be able to accumulate more $ape tokens to increase their voting power in the AIP’s.
But I understand your idea well and I respect it too. @SmartAPE

[badteeth]

@SmartAPE

@badteeth This thread was already ready to go do draft, but then I saw your post and requested that it be re-opened and extended a further 7 days because, after all, there’s no rush. Even though I believe this will likely fail - in every iteration - I want to ensure that I do my best, while reviewing all suggestions in order to find a middle ground of sorts.

I appreciate this very much, thank you.

@SmartAPE

I’m not doing Spaces. I’m not doing Discord VC. I’m not Tweeting anything related to it because I tend not to engage in time-wasting ventures because I tend to be very efficient with my time.

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

@SmartAPE

Right. So, how am I supposed to do any of that? Or do you mean this can/should be done in coop with the governance WG and/or SC

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.

@SmartAPE

So, why would they vote against their own best interests which is from the basis of power?

I fully recognize and appreciate the challenge of attempting to pass voting reform with the support of the same people it will impact. There are three paths that I believe could be used as effective arguments.

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.
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.
3. 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.

@SmartAPE

My AIP will fail, we know this. But at least it will remain as a testament that someone tried to do something.

“Whether you think you can, or you think you can’t – you’re right.”
-A good quote by a cancelled industrialist.

[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.

[SmartAPE]

I have made some revisions to my original AIP and also formatted it for draft.

[leyota]

3. Require voters to have a Gitcoin Passport in order to vote. This is a requirement of the ticket voting Snapshot strategy above.

I think you need to do a little bit more research into how gitcoin passport works. A gitcoin passport can be created by bots en-masse. It’s not the passport itself that is sybil resistant. It’s the stamps you collect in it. If you check their docs there are more details. Basically your AIP is missing what stamps are required to vote. Therein lies the rub.

[SmartAPE]

@leyota

Basically your AIP is missing what stamps are required to vote. Therein lies the rub.

No. I don’t need to specify that because it’s based on the implementation itself. I am certain that the dev who would be implementing the Snapshot strategy, already knows what criteria to use without me having to micro-manage it.

I actually have a Gitcoin Passport, and I know how it works. Don’t make presumptions about things that you know nothing about.

[leyota]

No. I don’t need to specify that because it’s based on the implementation itself. I am certain that the dev who would be implementing the Snapshot strategy, already knows what criteria to use without me having to micro-manage it.

This is the literal equivalent of saying “I want a website, the dev will know how what I will want on it”. There are a large number of Gitcoin passports stamps. What will you use for your sybil resistance? It’s such a difficult decision, and actually a very important one. For example there are some stamps that require you to connect twitter. Would you want that? Some that require you to do a semi-kyc even.

I actually have a Gitcoin Passport, and I know how it works. Don’t make presumptions about things that you know nothing about.

The reason I said that is because if you did, you wouldn’t have accidentally given the most important decision in sybil resistance; the thing that will require the most amount of discussion - for the dev to handle. Any decision on the stamps will be scrutinized. You, as the AIP author are supposed to make the decision. So it’s confusing to me that you claim to understand but choose to delegate the most important decision like its not a big deal.

As another example, if BrightID was included as a requirement, it will change who will vote for this, vs if the requirements were more relaxed. Like I said, the most important decision.

P.S I’m willing to put money on: when it goes to admin review, they will force you to come up with the requirements.

[SmartAPE]

Again, you’re missing the point.

Why would the dev think about implementing Twitter - or any stamp that’s not required in the specification or implementation - if they already have clear guidelines on what’s intended?

I hire people from all over the world and I don’t micro-manage them because I am always of the opinion that people know what it is they’re hired to do once you give them a task. This AIP is no different.

If you were a dev, you’d understand my position. Until it becomes an issue (e.g. in admin review), I will trust that the dev knows what is required to implement the requested AIP revisions.

FWIW, you’re here arguing with me about this issue, notwithstanding the fact that AIP-2 provided no clarity or guidance on the Snapshot voting strategy itself. So the dev went ahead and implemented what they assumed was appropriate based on the AIP guidelines. Either that or they received behind-the-scenes guidance from the foundation on what they wanted him to implement in said strategy - and that’s what he ended up doing, thus bringing us to this moment in time.

[leyota]

Why would the dev think about implementing Twitter - or any stamp that’s not required in the specification or implementation - if they already have clear guidelines on what’s intended?

Your specifications don’t have any guidelines for the stamps is my point! Twitter can be used for sybil resistance. So can every stamp on their list.

notwithstanding the fact that AIP-2 provided no clarity or guidance on the Snapshot voting strategy itself.

From the very beginning it has been mentioned 1 APE = 1 Vote. That is the exact strategy that has been implemented. Your AIP has no such guidelines which allows admins to select the right stamps. There are multiple types of KYC stamps. Again, instead of trying to defend your omission, it could be worthwhile browsing the list and actually including it here so people can have a productive discussion as to whether a stamp is worth it or not.

Or you can choose to wait till the very last minute until you are forced to do so and rush it into the AIP. I’ll leave it at that.

[SmartAPE]

@leyota

From the very beginning it has been mentioned 1 APE = 1 Vote. That is the exact strategy that has been implemented.

That’s not inherent in the current voting strategy. If it was, the value of the wallet would be immaterial.

Explain to me how these results equate to “1 APE = 1 Vote”. And I am specifically talking about the voters.

I’ll wait.

[leyota]

APE = ApeCoin (its the ticker). Not a person. You keep using APE to imply person, and no one really uses it that way. And it’s confusing. Whenever anyone mentioned APE, most probably they are talking about the coin, and not the person.

You didn’t have to wait long

P.S It says right there on the screenshot what APE means. Maybe if you want to insist on calling a person Ape, you could just capitalize it and then its obvious.

[SmartAPE]

I am aware of the differences between APE and $APE.

For the purposes of voting - the whole reason for this AIP - 1 APE with 500 $APE isn’t the same as 1 APE with 1 $APE.

And it’s certainly not the same as One APE equals one APE

ergo, the entire premise of that aspect of my AIP - as clearly stated in the AIP itself - is that for 1 APE to truly equal 1 vote, the value of $APE in the APE wallet must be disregarded. And thus we end up with the true intent of One APE equals one APE