Proposal Name: Reallocation of Ecosystem Fund into Ethereum and USDC
Proposal Category: Ecosystem Fund Allocation
Abstract: This proposal suggests reallocating 10% of the ApeCoin DAO’s available ecosystem fund into both Ethereum (ETH) and USDC (USD Coin). These funds will be utilized for various activities related to operating the ApeCoin DAO, facilitating grant requests, and ensuring the financial stability of the ecosystem.
Author Description: The author of this proposal @0xSword is a longstanding member of the ApeCoin DAO community with a background in proposal writing, community building, and research in the ecosystem.
Team Description: There is no specific team involved in this proposal. The reallocation of funds will be managed by the existing ApeCoin DAO administrators and service providers.
Benefit to ApeCoin Ecosystem: The reallocation of funds into Ethereum and USDC ensures the long-term financial health of the ApeCoin DAO. It provides the following benefits:
Liquidity for grant requests and ecosystem projects.
A buffer against market fluctuations.
Flexibility to adapt to changing circumstances.
Increased confidence among stakeholders.
Platform & Technologies :The fund reallocation will occur on the Ethereum blockchain, utilizing trusted and secure decentralized exchanges or platforms chosen for the conversion processes.
Steps to Implement & Timeline:
Confirm the current balance of the available ecosystem fund.
Execute the conversion of 5% of the fund into Ethereum.
Execute the conversion of 5% of the fund into USDC.
Ensure proper record-keeping of the reallocated funds.
The reallocation should be completed over a period of time reasonably determined with the APE Foundation.
Overall Cost: The cost associated with this proposal is limited to 10% of the available ApeCoin in the Ecosystem Fund and the transaction fees for converting funds into Ethereum and USDC. The exact amount of the fees will depend on market conditions at the time of execution, and the fees from any service providers responsible for the execution of this proposal, but are not expected to exceed $200,000.
We request that the ApeCoin DAO administration do their utmost in aiding the Over the Counter (OTC) sale of the coin to mitigate any potential adverse price effects.
the apedao treasury was created to carefully drip out $ape to worthy projects as a Non-Profit grant engine, over a long period of time.
I don’t believe this reallocation provides any of the benefits you outlined.
market sell 10%,
$ape price tanks (by 10%? maybe more, who knows),
taking down the treasury book value as well.
so the negative price impact on insta-selling 10% of the treasury would negate liquidity for grant request. and you have defeated the dao purpose of slowly distributing $ape to worthy projects by dumping it on random market makers.
the “flexibility/confidence/buffer” offered is artificial, just based on who you ask imo
Hey @rembrandt thanks for taking a look at this. I’ve had a lot of conversations in the ecosystem, lately about the health of the liquidity in the ecosystem. Last year would’ve probably been the best time to make reallocations like this, but I still think its an important step to take today, mainly for the Ape Foundation and service providers to have the ability to adapt to changing circumstances.
As far as timeline for how fast to sell, thats something that could be adjusted. I’m also looking at a couple additional early ideas to improve liquidity pool health. Is there some things you’d like to see that address similar problems? I’m happy to adjust this one(a little bit) or write up some additional ideas. Reach out anytime, or I’m happy continue the conversation here. Thank you, ser!
I don’t understand the reason for transferring part of 10% of the funds into tokens other than the main one, around which, in principle, the entire ecosystem is built. To me, this looks like doubt about the reliability of your own financial product.
Ethereum is also unstable, and recently the stables, one after another, are losing their peg to the dollar
The level of volatility of a primary coin like BTC or ETH compared to something like APE isn’t even comparable. APE is 1/27th of its all-time high value. ETH is 1/3. The purpose is to de-risk, as any halfway decent investment portfolio is diversified to hedge against the loss of value of any singular asset. Whether you agree that a DAO built around a certain token should diversify away from that token is a different matter.
IMO a bare minimum here would be assurance that the sale of the coin would be done OTC to negate negative price impacts. Would likely take quite a bit of effort to find buyers at the full quantity you’re looking to offload here, so I’d want to see that the framework for making that happen is established.
Because it’s still tens of millions that will pay for the DAO employee salaries for years and years. I’m sure the author knows if they’re too aggressive with how much is diversified, this will have no chance at passing.
I believe it is more interesting to have our entire economy in APE tokens.
And bring more usability to the token here within the community.
Everyone has to start seeing that our APE token is our trading currency for everything here, let’s forget everything else first.
We are committed to everything and we must also be committed to our currency.
There’s also a reality that people who work at the DAO will need to covert it to fiat to actually pay bills. So it’s a matter of how and when that conversion will happen. Your point is understood though.
Hey @mattborchert I’ve been thinking about how to incorporate a framework into the proposal, but not sure how to add that in using a paragraph or section. Without outlining their every move, could we add some basic language in here for a framework? Any ideas? I’m cautious to add too much!
IMO a bare minimum here would be assurance that the sale of the coin would be done OTC to negate negative price impacts. Would likely take quite a bit of effort to find buyers at the full quantity you’re looking to offload here, so I’d want to see that the framework for making that happen is established.
Hey there @LySunMoonStarLy and (I see few others chiming in too in the thread). This is a 10% reallocation that mostly meant for grant requests, ecosystem products, operational stability, etc. It’s not a larger diversification proposal for exciting new tokens or investments, but instead is a reallocation of 10% for some high priority things in the ecosystem. Helps with grant requests, ecosystem projects, service providers. Not a fun proposal but its probably a good idea to do this!
DAO admin and SC are paid a fixed $usd amount regardless of performance for some unclear reason. making sure they get paid their millions should be the last of DAO’s concern tbh.
i don’t consider the DAO treasury an “investment portfolio”. it’s goal is not to de-risk, its to distribute $ape.
If it’s purpose was such, then it wouldn’t be a non profit, it wouldn’t consist of 100% $ape, and it would’ve been formed with yield generating assets from the get-go.
Yuga might as well have altered the initial distribution plan of $ape and allocated 40 million more tokens to launch contributors for dumping instead of locking in treasury. it’s the same economic outcome as selling 10% otc.
My personal opinion is that if $APE goes to 0, the DAO failed and should dissolve along with it. Merely highlighting as to why people may request a diversification of funds.
USDC is a consideration, much like how countries have part of their sovereign reserves in USD, EURO, CNY etc.
This should be part of an overall treasury strategy not just one adhoc move. As an overall strategy considering the positive and negative impacts it is more likely to pass in snapshot.
Where are you getting the number for the fees to do this?
Hey @bigbull this proposal is pretty necessary for the health of the ecosystem. Unless you’re writing a treasury strategy, that is ready to send to vote today, the above proposal is important to run. Numbers were based on calculations working with a few others in the ecosystem. Thank you for your input.
Why is this necessary, can you elaborate? Specifically, what happens if you don’t execute this?
What calculations are you running, what are the numbers, and who are the others involved?
Hey @rembrandt yes, I’m glad to talk more about this. Overall health of the liquidity in the ecosystem is important. When looking at giving out grants or paying for services, we have to consider availability of liquidity. Inevitably, in many cases, its necessary to swap APE to ETH or into fiat, to pay for things like parties or software development.
By giving the Ape Foundation and service providers this allocation to work with, they are able to better coordinate and execute on grant agreements, meaning that even in times where liquidity pools are low, they can ensure that slippage and market impact are minimized. There are several advantages to doing this 10% reallocation. Now is the time!
As far as transaction fees, I’ve had a few talks with different apes in the ecosystem about what that could cost, ultimately landing at the number above, which is written into the proposal to not exceed $200,000. Goal was to keep the proposal above as simple as possible, as its not a full diversification or treasury strategy, but instead a move to ensure liquidity.
