AIP IDEA - DRIP and STAKE alternative

@Papasito thanks for taking the time to put this proposal together. Have you had a chance to speak with any attorneys the specifics of this proposal?

I’m not an attorney myself, but have done some research and consulted with some regarding tokens and the legal matters surrounding them.

In the U.S. there is a legal framework called the Howey Test that is used to determine if an investment is considered a security. Here’s the basic framework:

  1. An investment of money
  2. In a common enterprise
  3. With the expectation of profit
  4. To be derived from the efforts of others

Based on the research I’ve done on the matter, unfortunately it seems like your proposal would run into securities law, where each $APE and the NFTs, or possibly both, would be deemed a security.

My primary concerns are that if the NFTs emit $APE directly, that may be considered an expectation of profit, and therefore pass the Howey test. Further, your proposal for profit sharing to take place, that actually puts it squarely in the “pass” column.

As written, I’m not sure this would be a legally sound path to go down.