AIP-41: Keep ApeCoin within the Ethereum ecosystem - Process

Proposal Name: Keep ApeCoin within the Ethereum ecosystem

Proposal Category: Process

Abstract:

Yuga Labs stated in a tweet that they believed ApeCoin needed to move to its own chain in order to scale. We the ApeCoin DAO believe that, at least for the time being, ApeCoin should remain within the Ethereum ecosystem, and not migrate elsewhere to an L1 chain or sidechain not secured by Ethereum.

Motivation:

Migrating to a different chain is a costly, risky, and complex endeavor with many moving parts that may, if not thoughtfully considered, result in catastrophic loss, or at worst, abandonment by Yuga Labs and other entities that would otherwise meaningfully to ApeCoin.

Rationale:

While Yuga Labs expressed a desire to move away from Ethereum after the Otherside Deeds mint resulted in a big spike in gas costs, we the ApeCoin DAO believe that such a decision is currently too complex and costly to make.

By migrating ApeCoin away from Ethereum, it would then find its home on a different chain than the original assets that inspired it—Yuga Labs’ own NFTs

  • This may have unintended downstream effects, such as Yuga Labs no longer supporting or using ApeCoin in association with its NFTs like Bored Apes, Mutant Apes, or Otherside Deeds

While gas costs and transaction speeds may be a concern for some with Ethereum, especially when considering a desire to grow the ApeCoin ecosystem, moving it away from the Ethereum ecosystem is neither necessary, but potentially detrimental to ApeCoin holders, and the interests of the DAO.

  • Ethereum and its respective L2’s remain the largest collected ecosystem of NFT projects, builders, liquidity, and users. Moving ApeCoin away from this ecosystem could be detrimental to its health and the DAO’s goals of growing the ecosystem.

  • Many Layer 2 solutions that are secured by Ethereum, and exhibit meaningful improvement over fees and speed, already exist and could potentially be explored in a future AIP. These solutions include optimistic rollups such as Arbitrum and Optimism, or zk-Rollups such as StarkNet, zkSync, and Polygon Hermez.

  • Note L2 rollups differ from sidechains such as Polygon or alt-L1’s such as Avalanche in that they rely on their own security, as opposed to Ethereum’s consensus.

  • There are few examples of migrating an ERC-20 and its attached ecosystem successfully to another chain, and there may be many risks of loss along the way.

Ethereum’s security remains second-to-none

By delaying moving to any ecosystem other than Ethereum, we provide ApeCoin and the DAO with the greatest chance of making the right decision that will work best for all interested parties

Specifications:

ApeCoin MUST remain within Ethereum, or within an L2 scaling solution that is secured by the Ethereum blockchain. While this proposal makes no such recommendation for ApeCoin other than remaining on Ethereum, it does not preclude subsequent AIPs from suggesting a move to an L2 scaling solution secured by Ethereum.

Steps to Implement:

There are no additional steps associated with this AIP.

Timeline:

The start date would be immediate, with any competing AIPs withheld until after a period of 3 months following the acceptance of this AIP.

Overall Cost:

There is no cost associated with this AIP.

35 Likes

Hi ASEC,

I highly agree with your sentiment that we should NOT migrate from the Ethereum chain as that give us the best security and liquidity ESPECIALLY with ETH 2.0 coming in the future.

I also highly agree that even without using ANY L2 and to avoid looking like I am pushing some goofy project I have a massive bag in, there could have been solutions to avoid the gas war. We could have tiered these out and timed out minting, and many other solutions, but I’m glad we faced the issue so we can directly address the fact that most of our projects are only enterable for whales.

I will say, that although I agree with your entire post. I want to push heavily that I am against any sort of complacency and am really hoping for more discussion toward staying on the ETH chain, but migrating from L2. Perhaps I am confused on the process, or am putting too much faith into L2 minting that can be brought to the ETH chain through zkrollups (and zksync in the future), but I think that chains such as Immutable-X and possibly even Loopring, although, I would trust Immutable more at this point personally.

Again perhaps I am confused on the process of going from L2 back to the L1 chain (Eth chain), but it seems to be literal pennies, and incredibly secure. The main concern I have is security, due to the lack of these chains taking on a project this large to date, but I would love to hear a discussion as the roadblocks stopping us from using L2 to mint, then transfer directly back to the ETH chain cheaply and secure. I will clarify, I do not believe these methods are unsecure, but if we’re using KYC anyways, I don’t believe keeping our wallets private was a priority in the first place, so perhaps private is a better term.

Thanks for bringing this up so clearly. Full heartedly on board to NOT leave ETH even if L2 is not a viable solution at the moment.

6 Likes

If I can ask, how was the decision made to do the sale the way you did? First Dutch then swap?

Here was the Otherside response on twitter:

Along with a pretty long post as to why Dutch would have also been an issue that was included in the Twitter thread:

There was also this response from the man himself addressing why optimized contracts would have not solved the supply and demand issue:

I agree with VB, but there were solutions around this. I think they did their best to avoid Dutch by going with a reliable, albeit expensive solution for the first mint, but in my opinion, there were better solutions available if I’m understanding them correctly.

Swap was a choice and with the last second switch probably the safest solution for minting this round. I’m hoping L2 solutions are explored for the next mint, but definitely don’t want to leave the ETH chain because of this mint.

This was pricey, but successful, market value on Opensea is MUCH higher than the current purchase price that was available at drop last night, including gas, 1 day after the drop. We can discuss different solutions to minting, and I will fight with you for a lower entry price if that is what you are asking, but perhaps that would even lower our valuation.

Discussion is still in its infancy and perhaps this was the best route for our minting. I for one would just like to hear the possibility of L2s being explored, as we could stay on the ETH chain after a transfer, with less fees.

I will say. ETH fees being MASSIVE although unideal, added value to the Otherdeed project. No one will sell that land for less than the APE + ETH fees they paid for the land originally over their dead body setting a HARD floor.

I personally just hope in the future we can keep a high floor without literally burning any form of currency. We vowed to make everything we touch better in the DAO, ridding of gas fees would for sure be going in this direction.

Cheers!

7 Likes

I agree.
I think they should look instead in arbitrum, optimism, zksync or immutable, use them as they are or fork those and build there.
Moving away from ethereum is really the worst decision they can make, and I’ll need to think hard if I want to stick arround if that happens.

7 Likes

I think ETH 2.0 will not solve gas issues. Just in case we forget this point in the discussions.

3 Likes

+1 on this. There are a lot of centralized shitchains out there. No thanks.

6 Likes

Yes but L2s already solve gas issues and are live right now, while still preserving all the security of Ethereum.

I am strongly in support of staying with Ethereum’s security and utilizing one of the many live working rollups which preserve all the security while having none of the downsides.

9 Likes

@RKSZN Couldn’t agree more. I have bullish sentiment on the 2 projects I mentioned, Immutible-X & LRC, but I also am bullish on projects such as Cardano, ATOM and a bunch of other L2s.

I personally can’t decide which would be better utilization for our project, but I believe that Loopring has the best tech for our purpose. The usage of zkrollups is far underutilized for the security and cost issues it solves. I am much more inclined to work with a team that is more transparent such as IMX, but if we were looking at tech to solve our issue, L2s is certainly the way imho, with Loopring, followed by Immutable as top solutions.

+1

We should also avoid any attempt to bridge L1 assets to L2s. Primarily, avoid transferring ownership of your BAYC into a bridging/holding/staking contract that will have a mirrored version on a less decentralized network. If we allow that, who’s to say they don’t step in to “protect people” by recovering from hacks, but then a subsequently they are asked by the government (and comply) to “protect people” with a locking mechanism from “troublesome” countries.

5 Likes

1,000% agree. $APE is already deployed to Ethereum…as are the BAYC, MAYC, BAKC, and Otherside NFTs. Moving to an alternative L1 would segment the community and make many things harder moving forward.

I for sure recognize the motivation behind finding a path towards scaleability and cost reduction for transactions, but neither of those things require a brand new L1 to be spun up, which would add an obscene amount of complexity to the mix.

There are many viable L2’s currently, and more to come later. So all of the work should be focused on making that work vs. inventing a new app-specific L1.

3 Likes

@netdragonx Zkrollups are 100% secure and we’d be going from L2 (IMX, Loopring, etc) to L1 ETH chain.

Loopring for example is a dex. There is no centralized place for them to do what you are saying and it appears you are confused as to the whole purpose of an L2 to L1 transfer.

We would NOT be leaving ETH, we’d be minting on L2, then 100% securely transferring back to ETH (L1) for quite literal pennies.

I agree we should not be exploring other L1s as the Ethereum chain is ideal for our purpose, but to ignore the solution of minting on an L2, again such as Loopring or IMX, then transferring back to L1 seemlessly would be absolutely the best thing for our coin, our future projects, and easier entry for new NTF collectors, all while giving us more money by avoiding blowing it all on worthless gas.

L2 minting is 100% viable and by reading your comment, perhaps I misunderstood, but to say

shows a misunderstanding of L2 tech entirely. We are minting on L2 and transferring directly to L1, it would be hard coded into the contract and not be able to just be “stepped in” on like you’re referring to.

Perhaps I misunderstood, but I would be happy to clarify some of the confusion on zkrollups and L2s if it would help.

Cheers!

5 Likes

I think ZkSync could also be a good candidate here. They are a fully EVM compatible zk rollup that will be launching soon. It could be really cool to have BAYC be the flagship project on ZkSync for its launch.

3 Likes

So, just to add some clarity here:

ApeCoin is a fixed supply contract where it’s mintable on Ethereum only as it stands. Assets can only be bridged TO the target L2 as new $APE cannot be minted outside of Ethereum currently.

While tons of ape could be locked away and bridged to other L2’s, enabling whatever kinds of activity would be desired, it’s still rooted to Ethereum entirely.

3 Likes

@mg Copy that thanks for the clarification.

In the meantime… I think that brings us back to trying to optimize smart contracts which VB talks about in this twitter thread:

I’m unsure of where to start, as I thought an obvious solution would be to prolong the time frame minting was available and spacing out waves to when gas prices where set limits. I thought it would at least reduce the wars and bidding, but perhaps the longer time frame would have exacerbated the problem even further by upping demand, and even further raising gas prices.

Perhaps I’m misunderstanding the technicals of zksync from Starkware, but I believe we would maintain liquidity while using this solution or something similar in a zkrollup from Loopring without completely fragmenting the ApeCoin liquidity pool. Again, perhaps I am wrong on that, but I believe there are workarounds. Again, perhaps I’m just trying to force a rectangle through a circular hole with my misunderstanding, but I will reach out to both teams and try to either find a solution or at least come up to pace with a better technical understanding.

Starkware also believes they could have helped, and it’s not a project to scoff at, I don’t believe they would make idle claims if they were truly unable to step in.

I really don’t want to roll out (haha… or (zk)rollup) viable L2 solutions before hearing more and more intelligent people pick this apart.

At the very least, I will explore this and additional solutions while not paying more close attention to highlighting and addressing and exploring the minting workaround, as L2s built on ETH chain… I THINK are still on the Eth chain, but I could be naïve about finding a workaround.

Thanks for clarifying again,
Cheers

2 Likes

@RKSZN Couldn’t agree more.

I believe @mg just addressed the main issue with that from ApeCoin being contracted to mint on the ETH chain, BUT I believe there is already a workaround for that if I understand correctly. Reaching out to the teams now at Starkware and Loopring (and IMX) to see if there is an answer to our main concerns of liquidity cross chain and minting solutions.

I will continue to try and refine a proposal when I receive an answer, but if anyone else wants to take a chance at it, I would happily collaborate or provide information I found.

2 Likes

I agree with this, there are many options to stay on ETH as the main chain and use scaling solutions.

I saw SKALE Labs CEO and Founder (L2 Scaling on Ethereum) put this out: https://twitter.com/jackoholleran/status/1521178510827565056

But imo, I think it makes sense to run a process where community hears from the top scaling solutions on top of Ethereum.

2 Likes

It’s cool what SKALE is doing but for really high value things like Apes, I want the full security of the Ethereum validator set. The only way you get this is with a rollup. Using a rollup also means you don’t need to use an external bridge to get between L1 and L2, which would be another risk vector. Using a zk rollup also means you can bridge back and forth without any type of lockup/time delay (i.e. 7 day withdraw for Arbitrum/Optimism).

5 Likes

Yes, I fully agree with this. Stay in ERC, it has the strongest network and foundation.

Leaving Ethereum ecosystem entirely would be a terrible idea. Community was born here, Apes should stand their ground. Rollups will eventually capture most if not all transactional execution on Ethereum. And this is good for us. There is a clear trend is blockchain specialization: consensus layer, execution layer, data layer. Ape should not focus on consensus, it should focus on users and their interactions.

From all the Web3 companies Yuga is best positioned to drive the open metaverse. They do not just own some tech, they own the product that everyone want. And this is the only way to reach mass adoption. IMHO all the steps they took, were taken entirely for that reason. Why else would you buy IP rights for the first NFT collection on Ethereum and give it back to the community?

Udi had a great take on that:

$APE is the hottest girl in the club, everyone wants it to be on their platform. We need to control our own narrative, and we have power to do so. Launching on zkSynk or ImmutableX will be a weak play, it will put us in the same basket with the other projects on its platforms. We need to own the platform, and the value flow from our platform should accrue to $APE.

I personally think, StarkEx could be the best solution for us (ApeX sounds cool btw). In this case StarkWare will function only as a service provider. Our brand value will not be diluted. And we will receive support from the best guys in this business. Liron from StarkWare team has actually proposed APE Community to have a DAO voting to deploy on StarkEx:

StarkEx has several benefits that are very applicable for us. It would allow us to define the business logic for our platform: useful in the context of NFTs, metaverse, GameFi. Transactional costs will scale logarithmically with the transaction count: crucial for mass adoption. Different data availability modes: we can launch with a completely decentralized Rollup Mode (higher transactional costs) or somewhat centralized Validium Mode (lower transactional costs) where Yuga and StarkWare together can serve as committee. I think, there is a possibility to have a mix of both, where some core features with low transactional requirements are deployed in Rollup Mode, while potential on-chain games and experiences are deployed in Validium Mode giving minimizing the transaction costs for in-game interactions.

I think that we need to ask StarkWare team to provide a detailed specification and roadmap for such deployment and proceed with the AIP if the conditions of such deployment look reasonable.

3 Likes