AIP-405: [Resubmission] ApeSwap on ApeChain

ORIGINAL PROPOSAL:

Link here.

RESUBMISSION UPDATES:

The original concept for the ApeCoin DAO DEX was prior to ApeChain launching and was intended as a Uniswap fork that would be used by apes to provide benefits to apes. We recognized that this idea did not have a deep level of value for the community as lower fees could be found on Uniswap prior to the Uniswap fee-switch activation, and ultimately, the proposal was rejected. With limited options for how to reward the DAO in the past, this also created complexities for AIP-223 at the time, making the proposal too early for its time. Fast-forward, and with the adoption of ApeChain, as well as revenue back to the DAO being available, the ApeCoin DAO community has a genuine chance to create a unique, DAO-owned, sustainable revenue source and piece of ecosystem infrastructure in the first ever ApeChain DEX.

PROPOSAL NAME:

[Resubmission) ApeSwap on ApeChain

PROPOSAL CATEGORY:

Ecosystem Fund Allocation

TEAM DESCRIPTION:

Solidity.io is a full-stack Web3.0 solutions firm and product incubator focused on providing blockchain development services, smart contract solutions, and audits. Solidity.io is run by BAYC and ApeCoin DAO member Alex McCurry. [Solidity.io] has already successfully delivered value to the ApeCoin DAO through their successful audit of the ApeCoin NFT Marketplace approved in AIP-98. Link to the audit here. With full-stack Web3 development resources and experience, Solidity.io will be able to deliver a top-of-the-line DEX, quickly, securely, and cost effectively in order to generate maximum value return for ApeCoin holders as quickly as possible. Solidity.io created the www.apecoinstaking.io interface, investing resources and capital in creating infrastructure for the DAO, for free. Link to tweet here. Additionally Solidity.io was the selected development team for the redesign of ApeCoin.com in the governance working group proposal, as well as the recipient of a grant for the development of an ApeCoin payments SDK to expand upon use-cases and implementations of $APE.

Sushi Labs, led by Head Chef Jared Grey, is the parent entity of Sushi Swap. A top DEX in the EVM ecosystem. Sushi is widely regarded as one of the pre-eminent DeFi technology protocols in all of Web3. With one of the only DEX teams developing proprietary routing technology, Sushi serves as a top partner to deploy the ApeSwap product under their franchise DEX model. Proof of Sushi Lab’s willingness to comply with the terms outlined in this proposal may be found here: Sushi - ApeChain.pdf.

Advisors:
Mike (MIKΞR @0xm1kr ) , Business, Product, & Technology - Founder & CEO of CR3 Labs, and tech advisor at OTHERspace. Mike’s career began in Computer Science and Aerospace Engineering where he worked at Boeing as a Software Test Engineer. After several years, Mike transitioned to the startup industry where he built multiple software agencies and one of the first decentralized exchanges in 2017, later acquired by Core Scientific. Mike has over 15 years of software engineering experience, has designed and developed many hyper-scale web applications, managed tech teams that range in size from 2 to 20, and has raised/assisted with $14M+ in venture capital financing. He was also a pretty accomplished World of Warcraft raid leader from Vanilla to WOTLK (his words).


Leo (Nova @prollynuthin ) , Strategy, Marketing, & Operations - Founder & CEO of Vora Labs, and Co-founder of OtherGuild. Prior to entering web3, Leo spent a few years running a small game design studio that produced early Facebook & iOS games before venturing into SaaS where Leo spent the past 8 years as a growth marketing executive. The vast majority of companies Leo was a part of were early stage companies ranging from Seed stage to Series B in marketing & advertising technology, eCommerce, and cloud computing/infrastructure. Leo was fortunate enough to be a part of several scale-ups, venture financing rounds, and acquisitions. Leo is a lifetime learner & gamer (30+ years), and father of 2 savages.

ABSTRACT:

The ApeCoin DAO is built on the fundamental goal of enabling Yugaverse and ApeCoin holders with value. To date, the focus has been enabling marketplaces, a native blockchain, communications, IRL events/education, physical assets, and more.

With the launch of ApeChain fast approaching in June, a native swap/DEX product is needed in order to enable adoption and competitive functionality on ApeChain. ApeCoin DAO has the ability to establish a first-mover advantage by backing ApeSwap, a native ApeChain DEX powered by Solidity.io and Sushi Labs (Sushi Swap).

Our vision is to launch ApeSwap as a (DEX) to benefit ApeCoin holders. The ApeCoin DAO DEX will enable the decentralized exchange of tokens supported by multi-asset pools that earn liquidity providers fees from market making and swap fees. It should be noted that ApeSwap would not necessarily be the exclusive DEX of the ApeChain ecosystem.

ApeSwap will include a protocol fee for token swaps, with 50% of all protocol fees returning back to the ApeCoin DAO treasury. Immediately upon the launch and accrual of fees the DAO treasury would receive revenue distributions in accordance with the payout schedule established by Sushi Labs. In addition, ApeSwap will undergo a token generation event, and will provide an airdrop of ApeSwap DEX native tokens to ApeCoin token holders, as well as an airdrop directly to the ApeCoin treasury.

Sushi Labs, with development support from Solidity.io, will support strategic and technical efforts with the deployment, ownership, and maintenance of the DEX. In addition to this, ApeSwap will offer a token airdrop to active Sushi Swap ecosystem users to incentivize the growth and adoption of ApeChain by the broader DeFi community. xSushi (Staked sushi) holders will likely be the targets for the airdrop.

Specifications |
Solidity.io will operate as the core service provider for the ApeSwap DEX launch. This includes conducting design, development, and deployment of a native decentralized exchange on ApeChain for ApeSwap on behalf of Sushi Labs. All data points from the DEX will be aggregated to a decentralized datastore to enable real-time charting on the platform. The $APE grant will be paid to Solidity.io upon passing of this proposal to fund ecosystem development and maintenance for one year. Solidity.io will be the pre-selected core service provider, responsible for delivering on the product roadmap, supporting tokenomics design, go-live support, and maintenance of the product and platform for one year. With Sushi Labs being the operating entity and administrator of the franchised DEX, they would be responsible for hosting and maintenance coordination after one year if Solidity.io and Sushi decide not to renew the initial 1-year agreement together. We expect maintenance costs after year one to fall under $100k per year for maintenance and hosting.

ApeSwap will launch a token on ApeChain to function as the core utility token for ApeSwap. $APE holders will receive an airdrop, ApeCoin DAO treasury will receive an airdrop, and ApeCoin DAO treasury will receive a portion of trading fees.

Sushi Labs will function as the legal and managing entity overseeing the DEX launch and TGE, and ApeSwap will fall under the Sushi Labs management company as part of their franchised DEX model. Sushi will provide marketing support around the DEX launch and will handle all non-technical infrastructure, including domain maintenance and ownership, and hosting and serving of the platform.

Users can swap in and out of tokens utilizing the platform’s liquidity to perform transactions. The swap will display relevant information including price impact, slippage, and deadline. In addition to swap, users will be able to add liquidity to pairs, this process will be a seperate flow allowing users to customize their transaction. We plan to incentivize liquidity provision from the community and strategic partners.

At this time, final decisions have not yet been made regarding use of any existing ApeCoin DAO trademarks, or the creation of new trademarks related to ApeSwap, but the team does want to opt for an ‘Ape’ themed branding style.

BENEFIT TO APECOIN ECOSYSTEM:

ApeCoin DAO needs revenue!

The implementation of ApeSwap will be a key step in creating sustainable, on-chain infrastructure that is cash-flow generative and exists as a fundamentally ApeCoin-backed asset.

By receiving a portion of the protocol fees, as well as an airdrop to the treasury and ApeCoin holders. The ApeSwap DEX represents a potential long-term revenue stream to the DAO.

With the ApeCoin community containing many Web3 users and investors, the utility of a natively owned and backed DEX will generate massive value for existing holders, and incentivize new ApeCoin holders to acquire $APE.

The core of this proposal is centered around our motivation to build sustainable ApeCoin DAO treasury revenue and broader adoption of the ApeCoin ecosystem.

The goal of the ApeSwap is to create a self-sustaining, cash-flow generative addition of infrastructure to the ApeCoin ecosystem, while capturing value that a competitor on ApeChain will otherwise take.

In addition, a token drop will reward $APE holders who have long deserved some value being returned to them through the DAO.

At this time, all that can be shared is that the plan is to have airdrop/token allocations to the following parties: ApeCoin holders, ApeCoin DAO treasury, Sushi Treasury, xSushi holders, team, Rewards for liquidity provision. This is a fluid process of course and will be more solidified over time. Users will need to connect to a site/platform to claim.

KEY TERMS:

DEX = Decentralized Exchange

ApeSwap= The tentative name for an ApeChain native DEX as described in this proposal, backed, owned by, and built for the ApeCoin DAOs benefit.

PLATFORMS & TECHNOLOGIES:

ApeChain, Vercel for hosting frontend UI, GoDaddy or Squarespace for domain hosting (TBD), smart contracts.

STEPS TO IMPLEMENT & TIMELINE:

Timeline and Milestones

Phase 1: Pre-Development and Design

  • Milestone 1: Proposal approval and Grant Agreement signed
  • Milestone 2: DEX UX/UI Design
    • Estimated Timeline: 3 weeks

Phase 2: Architecture and Smart Contracts

  • Milestone 3: Tokenomics Design and Technical Architecture
    • Estimated Timeline: 4-6 weeks
  • Milestone 4: DEX Smart Contract Development and Testing
    • Estimated Timeline: 6-8 weeks

Phase 3: Development and Integration

  • Milestone 5: Front-end Development and Integration Begins
    • Starts Week 11
  • Milestone 6: Farming Rewards Program Back-End Development (These details are still in the ideation and strategic phase and are not yet able to be shared. Ultimately we hope to incentivize liquidity provision and activity on the DEX, which translates to activity on ApeChain, via token rewards to users.)
    • Estimated Timeline: 4 weeks
  • Milestone 7: Charting and Analytics Back-End Development
    • Estimated Timeline: 2 weeks
  • Milestone 8: Trading Alerts Features
    • Estimated Timeline: 2 weeks

Phase 4: Testing and Launch

  • Milestone 9: Development and Testing of Tokenomics System(s)
    • Estimated Timeline: ~2 months
  • Milestone 10: Completion of Front-end Development and Integration
    • Estimated Timeline: Weeks 15-18
  • Milestone 11: Smart Contract/Platform Internal Audit
    • Estimated Timeline: Weeks 12-14
  • Milestone 12: Smart Contract 3rd Party Audit ( We have identified Halborne, QuantStamp, and CertiK as possible auditing partners. Audits would be made public for the ApeCoin DAO so long as the technical team does not deem such disclosures a security risk.)
    • Estimated Timeline: Weeks 13-15
  • Milestone 13: Go-Live!
    • Estimated Timeline: Weeks 16-20

Total Estimated Time: 4-5 months

[Note: Final launch time may be dependent upon ApeChain launching.]

OVERALL COST:

Total Budget: 750,000 APE COIN

Detailed Cost Breakdown and Allocations

Platform Design & Development: $340K

  • DEX UX/UI Design: $30,000
  • Tokenomics & Technical Architecture: $65,000
  • Smart Contract Development & Testing: $60,000
  • Front-end Development & Integration: $65,000
  • Back-End Development for Farming Rewards and Charting/Analytics: $45,000
  • Trading Alerts Features: $25,000
  • Smart Contract Audits (Internal & 3rd Party): $50,000

Marketing, Business Development, and Operations: $120K

  • Business Development & Partnerships: $45,000
  • Marketing & Community Engagement: $50,000
  • Operations & Miscellaneous: $25,000

Legal & Compliance: $100K

  • Comprehensive legal support and compliance assurance to navigate the regulatory landscape effectively.

Infrastructure & Miscellaneous Costs: $190K

  • Hosting Costs: $35,000
  • Blockchain Indexing/Data Storage: $25,000
  • Contingency Fund: $50,000
  • 1-Year Maintenance: $80,000 (Included to ensure ongoing support and updates for the platform, covering server maintenance, product updates, and bug fixes.)

While a plan to submit a follow-up AIP in collaboration with Sushiswap to continue as ApeSwap’s service provider after the conclusion of the initial 1-year term has not yet been decided, we hope revenue from the DEX will be sufficient to maintain all operations and maintenance expenses post the initial 1-year term.

15 Likes

@alexmccurry the idea of having our own chain and dex is great hope this gets an approval

7 Likes

Seems to me that this time you’ll have much more chances to get the approval for your proposal, @alexmccurry. Branded DEX on the upcoming native ApeChain is really needed, especially in case it goes in a combination with corresponding airdrops and other benefits to the Ape Community. Go on!

6 Likes

Without mincing words I’ll come right out and say it.

The price is egregious and I’m struggling to understand how the costs are this high. Your proposal is asking for over $1.5 million dollars. For a DEX

Every single L2 right now has a dex, and most of them are self funded or funded through minor ecosystem grants. Almost every single DEX is a fork of one of the major dexes, and in some cases there’s licensing agreements but nothing this high. On top of providing this massive grant, the DAO receives only 50% of revenue. As an extra kicker there’s going to be a TGE for this, which the DAO doesn’t have full control of.

DEXes are literally a dime a dozen and considered a commodity product at this point. Just like L2 chains. We just had an RFP for an L2 chain and I don’t see any reason why we can’t have one for a DEX. If we offer up $1,000,000, which is an insanely large number by the way, as a bounty for a completely DAO owned dex with a TGE that is fully controlled by the DAO I’m willing to bet we would have 10s of application minimum. For a fraction of the cost we can have a fruitful partnership with one of the other DEXes.

I’m really sorry if this sounds harsh but this feels like an insane cash grab to me. You could prove that I’m completely off base here by giving more insight into the costs. I’m seeing no novel web3 development because you’ll be using SushiSwap and standard token contracts. Just some development for the token logic. There are entire novel web3 products that receive seed funding of less than $1,500,000. This isn’t a novel product.

To summarize: I think we should do an RFP. If we don’t, even if we don’t fund a DEX, I’m certain a team will automatically come and build one because it’s a profitable endeavour. They get to keep the profits. If we pay $1,500,000 for a commodity product, and only get 50% of revenue and don’t fully control the TGE, I feel like I should rethink my bull market multiplier on product development costs :laughing:

EDIT: I just re read your old proposal. There you ask for 39,000 APE (when APE was around 5) which was about $200,000. The same proposal is now 7x more expensive?

7 Likes

Having our very own chain and dex would be awesome, this would improve the influx of new users into the community :rocket:

6 Likes

Hey Leyota, I appreciate the feedback and comments.

While the ask is significant, we feel that this proposal will vastly deliver more value back to the DAO and ApeCoin holders than the cost. The thing to remember with this cost breakdown is that launching a DEX properly with a proper partner like Sushi requires extensive resourcing, planning, manpower, and budget for things like design, development, testing, audits, marketing, legal, compliance, tokenomics modeling and testing, and much more. We recently updated the proposal with a more concrete breakdown of costs, and bear in mind that this proposal also includes a year of maintenance costs which also encapsulates the need for ongoing legal and compliance, marketing, and engineering capacity.

While the cost is significant, this proposal delivers the DAO its first real stream of revenue with a product that would be supported and backed by the entire ecosystem. The value in the token allocation to the DAO treasury alone, in our opinion, will likely far outweigh the costs. Not to mention the recurring revenue back to the DAO, and the value that individual $APE holders will get via an airdrop.

(For clarity on original proposal, it was very different, that was a Uni V2 reskin with no support from Sushi or any other major DEX player, no TGE, and was just to be launched on ETH mainnet with no marketing or ongoing budgeting being considered. Much less opportunity or upside for DAO and way less work.)

The DAO has invested tens and tens of millions of dollars over the course of the existence of the DAO, with little to no clarity as to how that will reward holders, or create sustainable income streams to the treasury.

With this proposal and investment, we finally have a path forward for how we can achieve that.

Happy to discuss this in more depth and always welcome questions and feedback from the community. Thank you!

3 Likes

the steps to initiate this is well detailed and i also like the idea os having our own chain and dex, it will be amazing

3 Likes

Hi ApeCoin DAO Community,

@alexmccurry has completed editing their AIP Idea to be their AIP Draft.

This proposal has been assigned the AIP ID Number 405.

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

Kind Regards,

-@Facilitators

1 Like

The implementation of Apecoin’s independent blockchain and decentralized exchange will attract interest from potential investors

4 Likes

Great proposal! Collaborative effort between Solidity.io 1 and Sushi Labs for ApeSwap on ApeChain seems well-thought-out. Clear timeline, budget breakdown, and focus on sustainable revenue align with ApeCoin DAO goals. Exciting potential for ecosystem growth

4 Likes

There is a significant amount of infrastructure needed to make any chain successful. A DEX is one of the most critical. If ApeChain is going to succeed it needs a solid DEX and a solid team behind it to ensure it’s success.

Having built one of the first DEX’s I understand the complexities that go along with not only building but running and maintaining a DEX. The ask for this proposal is reasonable and the team(s) and tech behind it highly qualified, with a proven track record. In addition, the revenue this will bring back to the DAO will more than justify the up-front cost.

Great proposal. Look forward to seeing this implemented.

p.s. @alexmccurry If I can be of any help, I’d be more than happy to contribute time/advisory to help see this come to fruition.

6 Likes

Hi ApeCoin DAO Community,

Our team has reviewed and discussed @alexmccurry’s AIP Draft and have sent a list of initial questions. We await answers.

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

Kind Regards,

-@Facilitators

2 Likes

Hi ApeCoin DAO Community,

@alexmccurry has responded to our questions and they are in our review once again.

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

Kind Regards,

-@Facilitators

1 Like

Hi ApeCoin DAO Community,

@alexmccurry has responded to our questions and has provided consent to share them in this forum for the community.

1. Is the Ape Foundation expected to engage in any of the steps of the AIP implementation? If so, please specify the steps and elaborate on how it is expected to work.

The foundation is not expected to engage in any steps of the implementation at this time.

2. What are your expectations regarding the use of any existing ApeCoin DAO trademarks, or the creation of new trademarks related to ApeSwap?

We currently have not decided this, although we do want to opt for an ‘Ape’ themed branding style.

3. Is it expected that ApeSwap would be the exclusive DEX of the ApeChain ecosystem?

Not necessarily no

4. Is there an expected schedule for the ongoing distribution of the revenue back to the DAO treasury?

Immediately upon the launch and accrual of fees the DAO treasury would receive revenue distributions in accordance with the payout schedule established by Sushi Labs.

5. Milestone 12 would involve a “Smart Contract 3rd Party Audit.”

a) Have you identified the 3rd party that would be responsible for conducting this audit?

We have identified Halborne, QuantStamp, and CertiK as possible auditing partners.

b.) Would the results of these audits be made public for the ApeCoin DAO?

Likely, yes, so long as the technical team does not deem it a security risk.

6. Under your Steps to Implements & Timeline section, it may be beneficial to include a disclaimer indicating that the final launch timing will be dependent on ApeChain launching.

Ok.

7. Would the exchange require a bootstrapping of pre-launch liquidity in order to seed the market, and if so where do you propose that capital would come from?

We plan to incentivize liquidity provision from the community and strategic partners.

8. “ApeSwap will launch a token on ApeChain to function as the core utility token for ApeSwap.”

a.) Would any part of the requested funding be used for the token generation event? Please elaborate.

Some of the funding does carve out budget for tokenomics in the proposal I believe.

b.) While Milestone 3 covers “Tokenomics Design and Technical Architecture,” have you identified any preliminary tokenomic specifications regarding this utility token that you can share?

Initially, all I can share is that the plan is to have airdrop/token allocations to the following parties: ApeCoin holders, ApeCoin DAO treasury, Sushi Treasury, xSushi holders, team, Rewards for liquidity provision. This is a fluid process of course and will be more solidified over time.

c.) Do you propose the “airdrop” for ApeCoin holders to be dropped directly into wallets holding ApeCoin, or will users need to connect to a site/platform in order to claim?

Users will need to connect to a site/platform to claim

d.) “ApeSwap will offer a token airdrop to active Sushi Swap ecosystem users to incentivize the growth and adoption of ApeChain by the broader DeFi community.” What constitutes an “active” Sushi Swap user, and what are the criteria for these users to receive a token allocation?

xSushi (Staked sushi) holders will likely be the targets for the airdrop. We aim to create an incentive model that incentivizes Sushi community members to come over and use ApeChain and the ApeSwap product.

9. This proposal would fund one year of development, support and maintenance of the platform.

a.) Do you plan to submit a follow-up AIP in collaboration with Sushiswap to continue as ApeSwap’s service provider after the conclusion of the initial 1-year term?

This is not yet decided, we hope revenue from the DEX will be sufficient to maintain all operations and maintenance expenses post the initial 1-year term.

b.) “ApeSwap will fall under the Sushi Labs management company as part of their franchised DEX model.” Please provide proof of Sushi Labs willingness to comply with the terms outlined in this proposal. Sushi Labs may need to sign an agreement with the Ape Foundation along with the author if this proposal is approved.

Sushi - ApeChain.pdf (276.7 KB)

10. Milestone 6 outlines a “Farming Rewards Program.” If available, please provide more details on how this program is expected to work.

These details are still in the ideation and strategic phase and are not yet able to be shared. Ultimately we hope to incentivize liquidity provision and activity on the DEX (which translates to activity on ApeChain) via token rewards to users.

11. Do you provide consent to apply updates to the relevant areas of your proposal based on your responses to the questions above?

Yes.

12. Do you provide consent to share these questions and answers with the community in this forum?

Yes.

Edits have been made to this Topic, with consent from the author. You can click the Pencil icon at the top of the post to see these edits.

A DAR package is being worked on and upon completion this AIP will move into Administrative Review. Follow this Topic as further updates will be posted here in the comments.

Kind Regards,

-@Facilitators

1 Like

Hi ApeCoin DAO Community,

We have no further questions for @alexmccurry. This AIP is now under Administrative Review.

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

Kind Regards,

-@Facilitators

2 Likes

Your old proposal is 7x lower than the first so how come this is more expensive now??

Seriously, I’m not shading but the amount is really much, $APE could even partner with other Dexes to build on ApeChain for a lower money

1 Like

Hi ApeCoin DAO Community,

After review, this Topic submitted by @alexmccurry is ready for vote under AIP-405. The proposal will be posted on Snapshot at the next weekly release date and time, which is the first and third Thursday of the month at 9PM EST.

The AIP implementation is administered by the Ape Foundation. Implementation may be immaterially or materially altered to optimise for security, usability, to protect APE holders, and otherwise to effect the intent of the AIP. Any material deviations from an AIP, as initially approved, will be disclosed to the APE holder community.

Kind Regards,

-@Facilitators

1 Like

This proposal is live for vote at Snapshot. The voting period closes 13 days from now at 9PM EST.

The AIP implementation is administered by the Ape Foundation. Implementation may be immaterially or materially altered to optimize for security, usability, to protect APE holders, and otherwise to effect the intent of the AIP. Any material deviations from an AIP, as initially approved, will be disclosed to the APE holder community.

2 Likes

With the coming launch of ApeChain this year, we need more AIPs like AIP-405 to support our partners create the best chain for web3.

Good Luck @alexmccurry
-Mr. Hype :fire:

6 Likes