AIP-396: LFG VENTURES presents: Made by Apes - Powered by ApeCoin

Administrative Review
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LFG VENTURES presents:

Made by Apes - Powered by ApeCoin™

PROPOSAL NAME:

LFG VENTURES presents: Made by Apes - Powered by ApeCoin™

PROPOSAL CATEGORY:

Ecosystem Fund Allocation

You heard it last Thursday, January 18, on our show Coffee with Captain - Illa and Jeff, speaking in their personal capacity not as spokespersons of Yuga Labs said that “ApeCoin should power every single Ape that has an idea or every MBA brand that needs funding, they shouldn’t have to go anywhere but ApeCoin”.

This proposal is the start of that mission.

THE SNAPSHOT

We believe that the DAO needs to put our Treasury Funds to work, not sit around bleeding red - and what better way than to invest in the talented founders, builders, devs and entrepreneurs in our ecosystem. And now that we know that Made by Apes is a major focus for Yuga Labs in 2024, we believe that now is the time for the DAO to step up and support Made by Apes (and soon Made by Mocas, Moonbirds, Pudgys, etc) with a professionally managed strategic guidance and investment fund - The LFG VENTURE FUND.

  • ONE: The LFG VENTURE FUND receives and manages the grant and utilizes DeFi protocols to create reasonable returns.
  • TWO: LFG VENTURES conducts research, outreach, and due diligence to identify promising projects and businesses licensed by Made by Apes to help them grow, scale and succeed, reporting all progress and performance to the DAO through an automated and transparent process.
  • THREE (OPTIONAL): To add a little fun to the proposal, LFG VENTURES will create, manage and execute an exciting IRL activation at ApeFest 2024 - giving powerful exposure and fuel to Made by Apes and complementing everything being done at The Bodega. Read on for more details as this will require a separate budget.

IMPORTANT NOTE: The goal of this AIP is to be cost neutral, or breakeven with zero realized cost to the DAO.

Sure, we’re asking for a 6.9m $APE Grant, but because of our talented DeFi team this AIP is powered by the returns from the principal for all investments and expenses.

TEAM DESCRIPTION:

@CaptainZwingli @VonFrontin @ssp1111 @Amplify @dominic

There are 3 roles involved in the secure and sustainable management of the fund:

PROJECT MANAGERS (3)

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Captain Zwingli: (@CaptainZwingli) Co-Host Coffee with Captain, Bored Shorts MBA Licensee - Brand Partnerships & Business Development

Captain Zwingli (Chris): With extensive experience in Brand Partnerships & Business Development, Chris, also known as Captain Zwingli, is a Co-Host of Coffee with Captain, the community voted Daily Spaces of the Year in 2023 and awarded the most consistent show in 2023 from SuperSpaces. Chris is also making waves with Bored Shorts, a MBA Licensee. His strategic insights and business acumen make him a valuable asset in fostering collaborations within the ApeCoin and Mocaverse ecosystems.

VonFrontin: (@VonFrontin) Attorney, Founder of Web3 incubator - Strategic Advisor, Marketing & Business Development

VonFrontin: An attorney by training with 20 years of experience in tech, finance, marketing and business development, currently leads strategy, marketing and business development for several large brands totaling over $9B+ in annual sales. An avid collector and builder in Web3 since late 2020, co-founding and running a community led Web3 incubator before its sale in 2023.

SSP: (@ssp1111) ApeComms, Accepted AIP Author, IRL Events AIPs - Community Coordination and IRL Events Activation Lead

Accepted AIP Author, Top 5 ApeCoinDAO, and ApeComms. Managed and founded several Coworking Spaces and Startup Studios, sold mobile gaming studio to king.com, IRL Events professional, responsible for luxury IRL activations at CoachellaFest for over a decade.

DEFI CUSTODIANS (2)

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Amplify: (@Amplify) DeFi Expert, ex-ApeCoinDAO Governance WG Steward, ApeComms Team Member - Treasury and Grant Fund Management Lead and MultiSig Signer

Amplify has been active in the ApeCoin DAO since its inception and BAYC since June 2021. He previously served as the first Lead Steward of the Governance Working Group. He is also the lead author of AIP-239: Working Group Guidelines, and co-author of AIP-196: BORED AIP: Bringing Order and Reliability via Ecosystem Decentralization, in addition to 4 other AIPs, all of which have passed. Amplify has over 7 years of asset management experience, being early and active in DAOs, using DeFi and collecting NFTs with ~4,000 mainnet txns at his public ENS 0xamplify.eth. A Boring Security Alumni, he has previously managed a seven-figure on-chain investment club and currently serves as a multisig-signer for ThankAPE, and the ApeCoin Marketplace.

dominic: (@dominic) DeFi protocol founding member and a Chartered Financial Analyst (CFA)

A seasoned Chartered Financial Analyst (CFA) with extensive experience in fintech innovation, wealth management, and private equity. His expertise extends to his current role as a founding member of a cutting-edge DeFi lending protocol.

ADVISORY BOARD & MULTI SIG SIGNERS (7)

  • Feld: (@Feld) BoringSecurityDAO
  • NFTBark: Published Author, CoHost Coffee with Captain, Community - Starbucks Odyssey
  • Papii: Head of Web3 @ Quirkies, Business Advisor
  • Outer Lumen: Data Viz Designer, UI/UX Specialist, ex-YugaLabs
  • Drucritt (@drucritt ) Startup advisory, startup tech products & financial modeling
  • Loxley: CEO, RugRadio, previous Venture Fund Manager
  • Pieter: (@pieter) Founder, Bored Brewing, previous advisor to Startup Accelerators

ABSTRACT:

The landscape of Web3 is evolving rapidly, and the recent indications by the Special Council that the DAO is able to receive revenues have ignited a spark within the ApeCoin community. Whether in the form of revenues or assets, this opens up exciting avenues for strategic initiatives. The Made by Apes - Powered by ApeCoin™ initiative is born out of this opportunity with the keen understanding that the DAO possesses the potential to become a catalyst for growth within the web3 ecosystem.

The primary motivation is to expedite the process of fueling promising projects and businesses licensed under the Made by Apes (and soon Made by Mocas, Moonbirds, Pudgys, etc). By creating an on-chain investment platform, we aim to streamline funding processes, accelerate approvals, and infuse projects with the necessary resources to thrive. This initiative is not merely about financial support; it’s about creating a symbiotic relationship where the DAO’s funds contribute to the growth of lifestyle brands and innovative ventures while bringing back tangible value in the form of collaborative connections and possibly future RevShare and equity.

As the DAO ventures into the realm of becoming an active investor, this initiative aligns with our commitment to community-driven success. It ensures that the ApeCoin DAO is not just a passive holder of assets but an active participant in shaping the future of the projects that share the DAO’s Guiding Values. Furthermore, this initiative strengthens the bonds with our collaborative communities, fostering a spirit of cooperation and mutual growth within the web3 ecosystem.

Additionally, leveraging our DeFi Team’s expertise, the initiative seeks to create a sustainable fund via audited and permissionless protocols like Aave, UniSwap, MYSO, Pendle. This innovative DeFi management approach aims for a zero cost proposal for the DAO.

IDENTIFYING, VETTING, AND ENGAGING PROJECTS:

The initiative will systematically source, identify, and vet promising projects and businesses within the Made by Apes, partner collaborative communities and our own ApeCoin DAO ecosystem. This process involves:

  • Sourcing: Actively seeking potential projects through community engagement, social platforms, and direct outreach. This may take the shape of an open Shark-Tank style pitching format in the future, but in the beginning will be an outreach process until we determine a streamlined operation.
  • Identifying: Utilizing objective criteria to evaluate the feasibility, innovation, and alignment with ApeCoin values along with pinpointing excellent founders and entrepreneurs.
  • Vetting: Conducting thorough due diligence, including but not limited to legal, financial, and operational aspects, to ensure the viability and authenticity of the projects.
  • Community Engagement: Presenting vetted projects to the communities for feedback, discussion, and transparency.

BENEFITS TO THE APECOIN ECOSYSTEM:

  1. Building a DeFi Infrastructure for a Venture Fund on Web3 Protocols: The Made by Apes - Powered by ApeCoin™ initiative paves the way for the establishment of a professionally managed venture fund within the Web3 ecosystem. It sets the standard for how Multi-Sigs can efficiently allocate funds to promising projects and businesses.
  2. Revenue Participation Leading to a Sustainable Business Model: By primarily engaging in ongoing RevShare agreements (and later Simple Agreements for Future Equity) with licensed projects and businesses, the initiative aims to create a sustainable business model. This benefits the DAO by aiming to be a zero-cost initiative.
  3. Onboarding More Founders, Builders, Developers, and Entrepreneurs: The streamlined funding process and proactive outreach will attract a diverse array of founders, builders, developers, and entrepreneurs to the ApeCoin DAO. This influx of talent and creativity will contribute to the growth of the DAO through diverse AIPs, propagation across various verticals and increased ApeCoin success stories (hello, Marketing & Comms).
  4. Creating Stronger Ties with Collaborative Communities: Collaboration is key in the Web3 space. By expanding our focus to include collaborative communities like Made by Apes, Made by Mocas, and others, we strengthen our connections within the broader ecosystem.
  5. Propagating Positive DAO Success Stories: Through Twitter Spaces, social platforms, and traditional media and PR outlets, we will actively help share success stories and achievements of projects funded by the initiative. These narratives will serve as beacons of inspiration and showcase the impact and potential of the ApeCoin DAO to a wider audience both within the Web3 and broader Web2 ecosystems.
  6. A wild IRL activation, pitch competition, at ApeFest 2024

KEY TERMS:

  • Multi-Sig Investment Pool: The treasury-managed fund held for investing in promising projects and businesses licensed under the Made by Apes protocol.
  • SAFE: Simple Agreement for Future Equity a founder-friendly note
  • Project Managers: Team responsible for the coordination, communication and collaboration with the Made by Apes Licensees and the IRL Activation at ApeFest 2024
  • DeFi Custodians: Team responsible for the performance and sustainability of the grant
  • Advisory Board and Multi-Sig Signers: Trusted community members responsible for the strategic guidance of the fund and the safeguarding of the Gnosis Safe where 4 of 7 signers will always be required

PLATFORMS & TECHNOLOGIES:

Uniswap: Uniswap is a suite of smart contracts utilizing idle liquidity to facilitate token swaps without the need for a traditional order book. It allows users to trade, or add liquidity to different token pairs on Ethereum.
Myso: Myso is a DeFi platform that specializes in fixed-rate lending and borrowing services. It allows users to lock in fixed interest rates for their loans or deposits, providing a level of predictability and stability.
Pendle: Pendle Finance is a DeFi platform that enables the tokenization and trading of future yield. It allows users to lock in future yield upfront and trade these future yield tokens, offering innovative ways to hedge against interest rate volatility and optimize yield strategies in the DeFi space.
Aave: Aave is a money market protocol that enables users to lend and borrow a wide range of cryptocurrencies in a trustless environment.

STEPS TO IMPLEMENT & TIMELINE:

Implementation Period: March 1 - December 31, 2024
Expected Term: Indefinite

Execution Phases:

Feb/March: Development of the LFG VENTURES process and funding infrastructure and initial collaborations with Made by Apes.
  • The fund would establish a legal entity in the Marshall Islands as a DAO LLC with the Program Managers and DeFi Custodians serving as employees of the LLC.
  • Funds would be managed via the offshore entity and would adhere to all legally required tax laws in that jurisdiction. The financial performance of the fund would be reviewed with the Advisory Board on a quarterly basis, as would any changes to operating procedures or policies.
  • @VonFrontin (licensed attorney) would be in charge of establishing and maintaining the fund compliance plan with the support of outside council.
  • We would not plan on raising additional capital outside of the grant from the ApeCoin DAO.
April 1 - December 31: Monthly execution of identifying, vetting, Investing and showcasing investment opportunities, community reporting and transparent performance tracking.
  • The Fund would hold monthly Spaces following each investment decision round to announce the projects/companies that received funding. It would also provide written communication of these decisions. Community members would be able to ask questions/provide feedback in the ApeCoin DAO forum.
  • The Marshall Islands DAO LLC would not collect management or performance fees. Rather, the MIDAO LLC would simply pay their employees within their ability to do so without disrupting operations.
  • The funds would be placed in the custody and control of the offshore entity. [@Amplify and @dominic would be given access to the funds to deploy DeFi strategies. As yield is created, the Program Managers would establish budgets for operations (e.g. fees to maintain entity, legal fees as needed, marketing, etc) and investment. Investment proposals would be brought to the Advisory Board on a monthly basis for review.
  • Only surplus funds would be invested and the fund would ensure all committed investment funds reside in low risk assets (e.g. USDC) to ensure they can be fully dispensed to the funded companies.
  • The Advisory Board would have full control over the Fund’s investment decisions through a simple majority vote.
  • Advisory Board and team members may be removed following a simple process: Any removal of an advisory board member would require a majority vote from the remaining Advisory Board members. Similarly, any replacement member would need to be voted on by the same methodology. In the event of a tie vote, the Project Managers would cast the tie breaking vote, decided by a simple majority within that group.
  • In addition to the DeFi strategy investments the fund would utilize to generate yield, additional investments in companies would be considered that that align to the following criteria:
    1. Are officially licensed via the Made By Apes process
    2. Have a credible path to profitability within 2 years from investment
    3. Advance the Web3 ecosystem (e.g. via use of Web3 IP, advancing technical protocols, expanding use cases for ApeCoin, etc)
  • We anticipate aligning with industry standard investment periods, optimizing for medium to long-term growth.
  • Professional accountants would be utilized to ensure all tax obligations are met.

Reporting and Transparency:

  • Monthly reporting on investments, performance, and progress.
  • Transparent tracking of funds and their sources through audited DeFi protocols.

OVERALL COST:

The Made by Apes - Powered by ApeCoin™ initiative requests a Principal Grant of 6,900,420 $APE to be transferred to a Multi-Sig to the LFG VENTURE FUND.

Investment Focus

The Made by Apes - Powered by ApeCoin™ initiative recognizes the diversity of opportunities within the web3 ecosystem. We understand that our investments may span a range of categories, including lifestyle businesses, technology, software, and protocol projects. Our primary goal is to support and kickstart founders, builders, and entrepreneurs within our collaborative communities while maintaining a sustainable approach.

Investment Fund Matrix:

Principal: 6,900,420 $APE

Expected Yield: 15-20%

Monthly Investment: Approximately 99,000 $APE

Fund Allocation (Monthly):

Investment Pool: The monthly investments will be allocated to fund promising projects and businesses licensed under the Made by Apes brand.

Operating Expenses: The operating expenses for the initiative, including administration and management, will be covered by the yield generated from the principal amount. This aims to minimize the direct cost to the DAO.

Please note that this matrix provides a high-level overview, and the actual fund management strategy may involve more detailed financial planning and monitoring to achieve the desired objectives and sustainability of the initiative. We would not accept custody of the grant until the successful establishment of an incorporated offshore entity, and would like the AIP to find resolution through the AIP process before incorporating. We are very happy for the Foundation to withhold funding indefinitely until our offshore entity is incorporated.

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Here’s an FAQ, based on questions we’ve been asked since posting this AIP:

General FAQs:

What is the Made by Apes - Powered by ApeCoin™ initiative?
The Made by Apes - Powered by ApeCoin™ initiative is a strategic proposal aimed at strengthening collaboration between the ApeCoin DAO and the Made by Apes community. It proposes to utilize a portion of the DAO’s treasury funds to strategically invest in promising projects and businesses, particularly those licensed under the Made by Apes protocol. The initiative seeks to create a symbiotic relationship between the DAO and these ventures, fostering growth within the web3 ecosystem.

How does this initiative benefit the ApeCoin DAO?
This initiative offers several benefits to the ApeCoin DAO:

  • Building a DeFi infrastructure for a venture fund: It establishes a framework for efficiently allocating funds to promising projects and businesses.
  • Revenue Participation: By primarily engaging in ongoing RevShare agreements (and potentially Simple Agreements for Future Equity) with licensed projects and businesses, the initiative aims to create a sustainable business model. This aligns with the goal of making this a zero-cost proposal to the DAO.
  • Onboarding Talent: The streamlined funding process and proactive outreach will attract a diverse array of founders, builders, developers, and entrepreneurs to the ApeCoin DAO, contributing to its growth and success.
  • Strengthening Collaborative Bonds: By expanding its focus to include collaborative communities like Made by Apes, Made by Mocas, and others, the initiative strengthens the DAO’s connections within the broader web3 ecosystem.
  • Propagating Success Stories: The initiative actively shares success stories and achievements of projects funded by the initiative through various channels, acting as beacons of inspiration and showcasing the impact and potential of the ApeCoin DAO to a wider audience.

What is the primary goal of this initiative?
The primary goal of the Made by Apes - Powered by ApeCoin™ initiative is to expedite the growth of projects and businesses licensed under the Made by Apes (and similar) protocols by providing them with funding and resources. This initiative is not merely about financial support; it’s about creating a symbiotic relationship where the DAO’s funds contribute to the growth of lifestyle brands and innovative ventures while bringing back tangible value in the form of collaborative connections and, potentially, future revenue-sharing and equity opportunities.

How will the initiative ensure transparency in its operations?
Transparency is a fundamental principle of the initiative. We’re building in Public and the following steps will be taken:

  • Monthly Reporting: The initiative will provide monthly reports detailing its investments, performance, and progress.
  • Audited DeFi Protocols: The funds will be managed through audited and permissionless DeFi protocols like Aave, UniSwap, MYSO, Pendle, and others. This will allow for transparent tracking of funds and their sources.
  • Community Engagement: We will hold Twitter Spaces on an ongoing basis with the team and the projects funded.

Will the ApeCoin DAO have any equity ownership in the projects funded?
Equity ownership will absolutely be considered in the future utilizing SAFEs, but for now we’re focused on Revenue Sharing and creating the infrastructure for a streamlined funding process.

How is this initiative a cost-neutral proposal for the ApeCoin DAO?
Yes, this initiative aims to be cost-neutral. The 6.9M $APE grant will be deployed into DeFi strategies, and the returns from these strategies will cover monthly grant rewards and operational expenses. This approach is designed to ensure that the initiative operates without incurring direct costs to the DAO.

Is this a proof of concept for future initiatives then?
Yes, this initiative serves as a proof of concept for a more ambitious initiative, an OnChain Venture Fund. It demonstrates the potential for the DAO to actively contribute to the growth of web3 projects and highlights a new path for proposals by utilizing a small portion of the treasury for strategic investments while covering all expenses from returns on those investments.

Business Development FAQs:

How will projects and businesses be identified for investment?
We expecting to systematically source, identify, and vet promising projects and businesses within the Made by Apes ecosystem and in the future, other partner collaborative communities. The process involves active sourcing, objective criteria evaluation, and community engagement. Initially, this takes the form of an outreach process, inbound applications could be created if/when we see the need for it.

What criteria will be used to vet projects?
Projects will undergo aspects of due diligence, including but not limited to legal, financial, and operational aspects. The criteria for vetting will focus on the feasibility and innovation of the projects, their alignment with ApeCoin’s values, and the quality of their founders and entrepreneurs.

What types of projects will be funded?
Investments may span various categories, including lifestyle businesses, technology, software, and protocol projects. The primary goal is to support and kickstart founders and builders within Made by Apes to begin with and our partner collaborative communities.

Is this an incubator or accelerator?
Not at this time. Several members on our team and Advisory Board have deep experience in running Incubators/Accelerators, so we’ll create the infrastructure in anticipation of growing into one in the future if warranted, but for now it’s an MVP Venture Fund. Keep in mind, the DAO approved and funded an ApeAccelerator, so we’re looking to direct MBAs their way when appropriate.

Other FAQs:

How can the community stay updated on the progress and performance of the initiative between monthly reports?
We’re building in public, so just reach out. Additionally, stay engaged through regular updates through the LFG Ventures Twitter account, where we’ll also host ongoing Twitter Spaces for direct communication.

Are there plans to expand the initiative beyond Made by Apes?
Absolutely! So, while the initial focus is on Made by Apes, this initiative aims to expand its scope to include other collaborative communities within the web3 ecosystem. This expansion would potentially broaden the reach and impact of the initiative, benefiting a wider range of projects and ventures, including Made by Mocas, Made by Moonbirds, and so many more.

Is there follow-on funding?
Follow-on funding may be considered based on the needs and performance of projects funded by the initiative.

What’s stage two of this plan?
So glad you asked. Stage two may involve broader initiatives, such as the establishment of a DAO-owned OnChain Venture Fund, if the first year demonstrates successful outcomes and warrants further expansion.

What are the team’s roles and how are they paid?
The team consists of (3) Project Managers, (2) DeFi Custodians, and (7) Advisory Board & Multi-Sig Signers, each with specific responsibilities related to the initiative’s management and governance. The Project Managers and DeFi Custodians will be paid based on the performance of the fund while the Advisory Board is a non-compensated role for the time-being.

What does business development consist of?
Business development involves sourcing, identifying, vetting, and engaging projects and businesses within the Made by Apes ecosystem and partner communities. It focuses on fostering growth, connections, and the success of these projects.

How many Twitter Spaces will you hold each week?
The frequency of Twitter Spaces may vary, but they serve as a direct communication channel for providing updates, engaging with the community, and facilitating discussions.

How does this initiative compare to OverPass by Pudgy Penguins?
While both initiatives support web3 projects, Made by Apes - Powered by ApeCoin™ focuses on Made by Apes projects and emphasizes self-sustainability through DeFi strategies, making it unique in its approach. We love what Luca and the OverPass team are doing and expect to collaborate in some shape or form sometime soon.

What’s the deal with the IRL event at ApeFest 2024?
The IRL event at ApeFest 2024 is an exciting component of the initiative. It aims to provide exposure and support to Made by Apes projects by hosting a real-live pitch competition. This event complements the activities at The Bodega, fostering real-world connections within the web3 community.

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Hello! I thought I’d take this opportunity to provide some additional information about our DeFi strategy and investment focus, as well as an FAQ to help answer some questions. :blue_heart:

Investment Focus:

The Made by Apes - Powered by ApeCoin™ initiative recognizes the diversity of opportunities within the web3 ecosystem. We understand that our investments may span a range of categories, including lifestyle businesses, technology, software, and protocol projects. Our primary goal is to support and kickstart founders, builders, and entrepreneurs within our collaborative communities while maintaining a sustainable approach.

Investment Fund Matrix

Principal: 6,900,420 $APE

Expected Yield: 15-20%

Monthly MBA Investment: $100,000

Monthly LFG Fund Expenses: $32,500

Expected Monthly Return with Managed Risk: $144,416.67

Net Monthly Return with Managed Risk: $11,916.67

LFGNEW

  • If we properly manage our risk, we can expect revenue of roughly ~$174,750 USD to “rollover” into the new year, after all of our year 1 expenses, investments, and revenue.

  • If we can only achieve a relatively low risk adjusted return of 5.5%, we will enter the new year “flat,” able to continue our initiative for another year, but without any growth.

MBA Investments: The monthly investments will be allocated to fund promising projects and businesses licensed under the Made by Apes brand.

Team and Other Expenses: The operating expenses for the initiative, including administration and management, will be covered by the yield generated from the principal amount. This aims to minimize the direct cost to the DAO.

Please note that this matrix provides a high-level overview, and the actual fund management strategy may involve more detailed financial planning and monitoring to achieve the desired objectives and sustainability of the initiative.

[details=“DeFi FAQ:”]

  1. What is the role of DeFi in this proposal?
  • DeFi (Decentralized Finance) plays a crucial role in the management of the LFG VENTURE FUND. The proposal outlines the use of DeFi protocols to generate reasonable returns from the 6.9 million $APE grant, aiming to make the initiative self-sustainable for the DAO.
  1. Which DeFi protocols will be used in this initiative?
  • We would be leveraging audited and permissionless protocols like Aave, UniSwap, MYSO, and Pendle.
  1. Who will manage the DeFi aspect of the fund?
  • The DeFi Custodians team, including individuals with expertise in DeFi, such as Amplify and Dominic, will be responsible for the performance and sustainability of the grant. Dominic is a seasoned Chartered Financial Analyst (CFA) with extensive experience in fintech innovation, wealth management, and private equity. Amplify is a 5+ year liquidity provider and DeFi power user with a top 30 DegenScore and over 4,000 txns on his public ENS: 0xamplify.eth. Together with our advisors, including Feld from Boring Security, we will carefully evaluate and assess every available allocation strategy for the LFG Fund.
  1. How will the DeFi management approach ensure a sustainable initiative?
  • The initiative aims to use the returns generated from the principal investment in DeFi protocols to cover all investments and expenses, thereby ensuring no continued expenses.
  1. What is the expected yield from DeFi investments?
  • The proposal anticipates an expected yield of 15-20% from DeFi investments. This is fairly conservative given our allocation strategy, with nearly half of the grant sitting in Aave, and we like it that way.
  1. How will the DeFi investment returns be used?
  • The returns are intended to fund the monthly investments in projects and businesses licensed under the Made by Apes brand and to cover operating expenses of the initiative. As the size of the fund grows, it means we can fund more MBA licensees, brands, and events within the APE ecosystem.
  1. What is the risk management strategy for DeFi investments?

Our risk management strategy is comprehensive and thorough, and includes:

  • Asset and platform diversification: We’re not putting all our eggs in one basket, nor are we keeping it all in volatile assets. We’re remaining heavily diversified to minimize the impact of market volatility.
  • Due diligence and continuous monitoring.
  • Only using audited protocols.
  • Exploring the potential for purchasing cover for our strategies from a smart contract insurance provider like Nexus Mutual.
  • Maintaining yield-bearing tablecoin reserves
  • Managing LP risk: Providing liquidity is inherently a “short volatility” trade. We need to ensure our LP is balanced according to market volatility such that we don’t find ourselves overly long or short.
  • Technical and operational security: We will be using a minimum 4/7 Gnosis SAFE multisig.
  • Using sophisticated asset management techniques to establish our initial allocations: We will only use limit orders, Time Weighted Average Price (TWAP), or Volume Weighted Average Price (VWAP) orders, to minimize any volatility in the markets when exchanging assets into or out of APE.
  • Contingency / Emergency Planning: By keeping nearly half of our fund in stablecoins on Aave, we maintain a buffer for any unforeseen events.
  1. How will the DeFi investment performance be tracked and reported?
  • The initiative will provide monthly reporting on investments, performance, and progress, with transparent tracking of funds and their sources through audited DeFi protocols.
  1. What happens if the DeFi returns are lower than expected?
  • Generally, contingency plans or adjustments in investment strategies are employed in such cases.
  1. Can DAO members influence the DeFi investment decisions?
  • We encourage and emphasize community engagement and suggestions, but will always take a risk adjusted outlook on any potential allocation decisions.
  1. How does Uniswap work?
  • Uniswap is a suite of smart contracts utilizing idle liquidity to facilitate token swaps without the need for a traditional order book. It allows users to trade, or add liquidity to different token pairs on Ethereum.
  1. How does Myso work?
  • Myso is a DeFi platform that specializes in fixed-rate lending and borrowing services. It allows users to lock in fixed interest rates for their loans or deposits, providing a level of predictability and stability.
  1. How does Pendle Work?
  • Pendle Finance is a DeFi platform that enables the tokenization and trading of future yield. It allows users to lock in future yield upfront and trade these future yield tokens, offering innovative ways to hedge against interest rate volatility and optimize yield strategies in the DeFi space.
  1. How does Aave work?
  • Aave is a money market protocol that enables users to lend and borrow a wide range of cryptocurrencies in a trustless environment.
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Proud of the work here helping builders build w/ ApeCoin. LFG!

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Interesting AIP. What do you think of your proposed yield compared to other benchmarks such as current $ape stake yield, other defi protocols, etc.

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While I haven’t carefully read the full AIP yet, you have a super strong team listed (and, well @ssp1111 too. :joy: ), so I’m interested to see where this goes!

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thanks, @buuvei

will defer to @Amplify and @dominic as it relates to yield benchmarks

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This is a step in the right direction! I need to digest it some more but wanted to hop in here and give props on taking these steps. Good stuff gents!

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Hey @buuvei!

So we’ve intentionally left out APE staking from this proposal as it is primarily dilutive to the rest of the community and doesn’t serve to add any real value. :slight_smile:

In terms of a benchmark though, currently staking APE returns about ~18-25% so I do think it serves as a fairly good benchmark for us to aim for!

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Big :brain: thoughts. :handshake:

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Would this replace the need for projects to come straight to the DAO asking for money through an AIP? Or would this just be another option for said projects (meaning a project could through this process or through the DAO via AIP or go to both asking for money).

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this would not replace the current DAO or AIP process, rather create an alternative option.

& yes, nothing would prohibit someone from securing funds both from the DAO directly and this fund.

although this fund will primarily be focused on early stage and/or lifestyle businesses.

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Sorry, few more questions, if you don’t mind, as I’m not familiar with the specifics of the MBA (Made by Apes) program.

Does MBA require there to be an actual product created prior to issuance of the MBA? If not, do you plan on allowing individuals, groups, or organizations to pitch potential products/ideas to you for funding which will then lead to an MBA license?

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Hey Livefast,

Thanks for asking your questions, always appreciated.

From my own experience, I don’t think MBA has a hard and fast rule of requiring an existing product/service to apply, but it does look like most current licensees have something already produced or in the pipeline.

Our focus, at least for the first few months, will be to identify MBA Licensees through our outbound efforts with an aim of progressively moving towards a process for inbound applications.

Trust this helps - :mechanical_arm:

SSP

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I had the same perceived understanding that this was the case, but wasn’t sure as I haven’t gone through it myself and figured you all may know better.

Yup. Completely see that and love it. Reading through your application, it left me with the impression that you may be a sort of VC or Angel Investor (I think I’m using these terms properly in this context) as your application appears to position yourself as potentially being one. I guess that may be a future endeavor for this program.

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Reading this a bit better, this is a bold AIP! I’m operating on the assumption that you’re going to move 100% of the funds you receive into DeFi, and then use the DeFi profits that you receive to fund investments in projects that you identify as being worthy of said investment. If my assumption is incorrect, let me know.

One big question is how do you intend to hedge asset volatility? Obviously it can work for you, but it could dramatically reduce your overall funding quickly in a crash scenario as well. For example, if Gordon tweets Apes are done, Penguins are the new new and $APE goes down 50%, how would you see that impacting funds based on your current strategy?

I do think this would be a great way to push funding to quality projects while avoiding the plutocracy that is the current DAO governance structure.

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Thanks, Matt

Your assumptions are correct - we’ve received some other similar feedback and will update some verbiage to make this more clear.

Regarding asset violatility, it could reduce overall funding; however, as part of the strategy to mitigate this, nearly half or ~3.6MM will be USDC in Aave earning a modest 5% and outside of protocol hack there is little to no downside risk.

& yes, we hope this provides a streamlined way to get funding to quality projects.

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Love the proposal (although I liked the ape16z name better but I understand why it wasn’t picked)

What would be the kind of support you’ll be willing to provide these companies later down the line where they’re sustainable and need CapEx for expansion.

Will you also be willing to look into platforms which allow permission less access to credit via revenue based financing ? In form of short term lines of credit which would be payed back in full along with any incurred interest as a %age of their revenue

This not only reduces risk for the investor, increases cash flow within the business, but also ensures there’s no form of equity dilution which might be a nice prospect for already established native (web 3) companies or non native companies who need to be on-boarded.

I think there’s a huge market for democratizing access to credit in form of short term lines of credit, especially in traditional markets for short to mid size companies, thereby circumventing ESG considerations as a whole, which people aren’t a big fan of.

Also, It would be cool if it had a social media presence like the other giants, be it How To’s, Sharing Insights or case studies

The examples being A16z’ → https://www.youtube.com/@a16z/featured (case study types)

or yCombinator’s → https://www.youtube.com/@ycombinator or https://www.youtube.com/@ycvault for a more How To perspective tailored for an authentic web 3 experience in the startup ecosystem

Finally, is there anything I can do in order to add to this initiative, I’d love to do that.

Hope all goes well and we’ll be able to see a self sustaining value addition machine in all its glory

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Thanks for the feedback, @CEOofWeb3.0

Great questions and ideas.

If all goes well, we can foresee a larger fund in the future and that could certainly help companies looking for larger rounds. Additionally, we will make introductions whenever possible.

& yes, we can explor permissionless platrforms that provide credit - any in particular that you’d recommend we explore?

I too agree that the market for democratizing access to credit… I’m a big fan of what we’ve seen in the defi and NFTfi space as it relates to individuals and tokenized assets, and agree an opportunity exists for businesses.

We are discussing a social presence, more on that soon - thank you for the ideas and examples.

& greatly appreciate your support and offer to help :saluting_face:

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One of the most interesting platforms for permission less access to credit would be Goldfinch (https://goldfinch.finance)

I know a couple of peeps who were looking to build a similar platform in the Revenue based financing space, was part of a small team for this as well.

Also, would you be down to provide other type of support other than monetary, like for example some other venture studios do. (Helping and mentoring founders with GTM strategy etc)

An example for which would be the Ton foundation accelerator (Accelerate your growth)

There are loads of considerations with something like this, I can rest easy knowing the team’s got the competence to get this up and running.

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