AIP-484: 2 Million $APE to Stake on Cyan via the APE Foundation (Resubmission)

ORIGINAL PROPOSAL:

RESUBMISSION UPDATES:

We wanted to address the concerns regarding costs and share our enthusiasm to help build alongside the ApeCoin DAO and its future developments, such as ApeChain.

  1. Reduced the ask to 2 million $APE rather than 2.5 million.
  2. Waiving the deposit fee which is 0.03% or about $5,600 USD.
  3. Recent audit with Quantstamp protocol wide.

PROPOSAL NAME:

2 Million $APE to Stake on Cyan via the APE Foundation

TEAM DESCRIPTION:

Cyan is a developer-first team, with Mikio, Naba, and Derrick (DareVader) leading efforts on the overall mission.

Mikio has over a decade of TradFi experience, working at various banks and hedge funds in trading and fund management roles. He made the full-time switch to crypto in 2017, where he transitioned from trader to builder and had his first startup exit in 2020.

Naba is a competitive programmer with deep expertise in backend systems. At Google, he helped build the Google Pay app and has contributed to many projects, including predictive typing on Android devices.

Derrick is the resident NFT whisperer, with deep connections in the space. He specializes in Business Development and Relations by focusing on community building and outreach. Years of experience in business management and finance with migrating to crypto in 2021 to pursue Web3 experiences and growth.

PROPOSAL DESCRIPTION:

This proposal aims to have 2 million $APE staked directly into the Cyan ApeCoin Vault from the ApeCoin DAO.

Cyan is a DeFi protocol enabling users to Buy Now Pay Later, Borrow, Lend, Stake, and truly retain their ownership through the power of our wallet, allowing users to take advantage of Wallet Connect.

The $APE provided by this grant will be staked to the Cyan ApeCoin Staking vault until the emissions expire, upon which all funds will be retained by the DAO. This $APE can safely be used to increase membership, spread awareness, and expand the ecosystem by putting $APE directly into the hands of more BAYC and MAYC users who have little to no $APE and no exposure to the DAO. We’ve battle-tested and have proven the vault increases participation in the ApeCoin DAO.

Our current users have created AIPs, voted on AIPs, and dived deeper into the ecosystem by developing stronger relationships and exploring deeper parts of the community. With Cyan, we can incentivize users to participate at no cost to them, while generating profits for the ApeCoin DAO. Cyan will pass through 100% of the yields from the 2 million $APE to the DAO. Cyan will also share 50% of the revenue generated by staking activities with the DAO. At the end of the ApeCoin staking emissions schedule, the 2 million $APE will be returned to the DAO.

How is Cyan able to do this through our protocol? Explainer here:

The Cyan ApeCoin Vault provides multiple ways to earn yield. Staked $APE is always earning yield as the following logic is applied:

  • $APE is paired to BAYC/MAYC/BAKC owners who want to stake but don’t have $APE. The generated yield is shared between both parties.

  • $APE which isn’t utilized for the above activity are directly staked into Horizen Labs staking contracts

  • Staking positions are continuously compounded on a bi-weekly basis. Gas is paid by Cyan

Through these activities, staked $APE is always earning yield to its maximum potential. For a deeper dive into the mechanics, please visit our documentation here: Staking ApeCoin

The original AIP idea thread can be found here: AIP-393: Proposal to stake 2.5 Million APE into the Cyan ApeCoin Vault

BENEFIT TO APECOIN ECOSYSTEM:

  1. ApeCoin DAO generates more $APE for their treasury and other initiatives.

  2. Delegated people/groups can increase their voting power through users accessing $APE.

  3. BAYC/MAYC users can access $APE for free and get voting power equal to their max stake allotment such as 10,094 for BAYC and 2,042 for MAYC, effectively onboarding more users.

  4. The staked $APE CANNOT be liquidated by users, ensuring the full amount of 2 million is protected at all times.

  5. The 2 million $APE grant will be returned at the end of the staking period. This effectively costs the ApeCoin DAO 0 $APE.

  6. The ApeCoin DAO generates 50% of the revenue from $APE-related transactions processed through Cyan.

DEFINITIONS:

Cyan Wallet: a smart contract wallet that is designed to act as an escrow during loans and staking activities. The Cyan Wallet behaves like a normal wallet, allowing users to sign into dapps, events, games, and other actions outside of selling or transferring out NFTs. The purpose is to retain the utility of the NFT during the loan or staking periods.

Cyan ApeCoin Vault: a vault designed to stake, pair, and compound $APE. Owners of BAYC/MAYC/BAKC can freely access $APE from the vault to stake and share generated yields. Idle $APE is used to stake into the native Horizen Labs contract and is compounded bi-weekly.

Pair Staking: A user seeking to access $APE from the Cyan ApeCoin Vault can do so by creating a Cyan Wallet, selecting the NFT they wish to stake using accessed $APE, and starting staking. There is no debt, interest, or market risk associated with this. Paired Staking is free, outside of gas costs, for any BAYC/MAYC to engage with.

PLATFORMS & TECHNOLOGIES:

Cyan has been building the Cyan protocol for the past two years. Leveraging protocol v2 components, NFTs on loans can be escrowed within the Cyan Wallet. This feature unlocks the ability to stake BAYC/MAYC/BAKC for $APE into the Horizen Labs contracts while being financed for purchase or on an NFT-backed loan for liquidity. The user retains the utility of the NFT during staking, BNPL, or loan periods.

Outside of the Cyan protocol, no other notable technologies are required for this proposal.

STEPS TO IMPLEMENT:

  1. If passed, we will start on September 30, 2024 and end on September 30, 2029, or when ApeStaking deprecates, whichever comes first.

  2. The APE Foundation will stake 2 million $APE into the Cyan ApeCoin Vault: CYAN | Buy now, pay later for NFTs
    Cyan will waive the deposit fee. This step will take 1 day to execute.

  3. Cyan will update the ApeCoin DAO with a report detailing the status on the staking position, deposit fee waived, gas fee refunded, and current yield once they have been completed as the first bi-weekly report issued on week 2 of the AIP passing.

  4. The vault has an estimated 30% annual yield, so this would be an estimated 600,000 $APE in accrued interest for one year. Thus far the vault has returned 7.65% in the past three months, which is in line with the estimated yield.

  5. Through compounding the staking done through the vault, Cyan collects 5% of the yield as a platform fee from the paired $APE. This is separate from the 30% annual yield above. Currently, the utilization of the vault is ~80%, so 5% * 80% would be a 4% revenue fee collected. We will split this revenue 50/50, so 2% will go to the DAO. This is an estimated 12,000 $APE in revenue to the DAO annually.

  6. Users do not receive the revenue split. Users can stake into the Cyan ApeCoin Vault to receive the estimated 30% annual yield. Or, they may enjoy the utility of the vault by accessing $APE from the vault to stake with their BAYC/MAYC/BAKC for yields from this page: CYAN | Buy now, pay later for NFTs

  7. There are no additional requests for the APE Foundation.

REPORTING EXPECTATIONS:

Cyan can provide a bi-weekly report on vault performance and utilization with the ApeCoin Community.

OVERALL COST:

Total amount requested from the ApeCoin Ecosystem Fund = 2,000,000 $APE

The vault has a 0.30% deposit fee, which is universal across all Cyan vaults. At current APEUSD prices of $0.93, this would be approximately $5,600. Cyan will waive this fee. An estimated $4 gas fee will be refunded as well.

The 2 million $APE is accounted for as a cost here, but the full amount of $APE will be returned to the ApeCoin DAO treasury at the end of the ApeStaking program. All interest earned during the deposit period will be returned as well.

There are no additional requests for the APE Foundation.

1 Like

I’ve been quite curious about the treasury and was surprised that it’s all in APE (or at least that’s my understanding from the transparency dashboard). I was surprised that more of it hasn’t been put into USDC, BTC, ETH, treasury bonds, gold, equities, etc. Maybe this is the wrong place to ask, but since this is a proposal about staking the treasury, I’m curious about that. Also, I’m a little curious on how the 30% yield is achieved. That’s very impressive.

Hi! Great question - definitely better suited for the APE Foundation to answer regarding why the Treasury is held in $APE vs other tokens but as fans of the DAO, our understanding is the APE Foundation setup a Treasury based on $APE because this is the native token to the ApeCoin DAO and fully committing to the notion that ApeCoin is here to be used, seen, and operated as a coin for all users across multiple purposes.

The 30% yield estimation is based on current emissions, the long term staking period, paired-staking, and our use of auto-compounding rewards to maximize effectiveness when it comes to making sure there isn’t an accumulation of idle $APE but rather have it in active use.

1 Like

Thanks for the answer!

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Hi ApeCoin DAO Community,

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

This proposal has been assigned the AIP ID Number 484.

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

Kind Regards,

-@Facilitators

Hi ApeCoin DAO Community,

Our team has reviewed and discussed @Cyan '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

Hi ApeCoin DAO Community,

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

Edits have been made to this Topic by the author’s request.
You can click the Pencil icon at the top of the post to see these edits.

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

Kind Regards,

-@Facilitators

Hi ApeCoin DAO Community,

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

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

Kind Regards,

-@Facilitators

How does your platform compare to BendDAO and Parallel?

In what ways are you similar?

In what ways are your different?

Who has completed your Security Audit?

1 Like

Hey @bigbull , thanks for your inquiries! See below for our responses:

How does your platform compare to BendDAO and ParallelFi?
Cyan stands out from BendDAO and ParallelFi through its broader support for marketplaces (Blur, Magic Eden, Mintify, LooksRare, OpenSea and more), more favorable loan terms (LTV 25-75%), and enhanced ownership features via the Cyan Wallet (Uses Wallet Connect and supports Warm.xyz and Delegate.xyz). Cyan offers more flexibility, lower down payments, and eliminates the risk of forced liquidation during the loan period.

In what ways are you similar?
We’re all similar in that we offer NFT loans, ApeStaking solutions, and primarily help match borrowers with lenders. We achieve this through a peer-to-pool model, which differs from the traditional peer-to-peer model. The benefit of this is the ability to facilitate a loan instantly while providing several loan term options.

In what ways are you different?
The largest difference is how Cyan approaches liquidations of loans. BendDAO and ParallelFi have specific spot price triggers for liquidation, while Cyan gives this option to users. In a non-liquidating loan on Cyan, users only have the obligation to make monthly payments (1-6 months). Thus, their loan continues to exist irrespective of how the underlying NFT price is moving.

Another major difference is our Cyan Wallet. Users have full control over the NFT during the loan period, as the collateral NFT sits in a smart contract wallet allowing users to access dApps such as Snapshot, Magic Eden Profile, OtherPage, BAYC profile, Warm, Delegate, Discord, and more. Other platforms lock the NFT and issue a synthetic version, preventing a borrower from accessing any utility during the loan unless supported by Delegate.xyz. At Cyan, we believe you should be able to drive your car while you repay the car loan.

Who has completed your Security Audit?
Quantstamp, 0xQuit, and Certik have audited our protocol. You can view all 11 audits here Security Audit.