AIP4 Reloaded: Staking Process with Caps (1x drop)

ABSTRACT
After the vote against AIP 4&5, the community had meaningful discussions here on the forum and elsewhere, still it is necessary to proceed and take a decision. The essential feedback was that the overall the framework was fine, but lacked the key element of caps.

This AIP proposes a staking system for ApeCoin and the Bored Ape Yacht Club (BAYC) NFT ecosystem: Bored Ape Yacht Club, Mutant Ape Yacht Club (MAYC), and Bored Ape Kennel Club (BAKC). Staking participants will be able to stake ApeCoin and use the Bored Ape Yacht Club ecosystem NFTs to receive ApeCoin from a preset pool over a set period of time.

MOTIVATION

Therefore this AIP has the purpose to simplify the entire process, propose again the same previous AIP-4 plus the caps (1x the drop), to allow the DAO move forward without other contention points.

Staking models should seed the growth of the related token and NFT ecosystem. They can do this by expanding the audience while incentivizing early adopters and existing ecosystem participants.

One core goal of this AIP is to ensure that the staked BAYC ecosystem NFTs remain tradable regardless of a specific NFT’s status in relation to a stake, so that the growth of the ecosystem isn’t constrained by the lockup of staked assets. This allows new users to always have the opportunity to participate in staking after the launch of any staking period (each, a “Period”), by continuing to grant access to any BAYC ecosystem NFTs.

The pools will be set up to specifically recognize the varied assets within the ecosystem, with a total of four distinct pools being active during each staking period.

RATIONALE

As a first step to ApeCoin becoming the preferred token of web3, early NFT adopters and existing and potential ecosystem participants should be incentivized.

AIP-4 is built around incentivizing existing and potential holders to engage in the ecosystem, one of several ways additional utility will be added to ApeCoin and BAYC ecosystem NFTs.

SPECIFICATIONS

  • Qualifications to Stake:
    • The eligible ecosystem assets for staking or committing to staking pools are ApeCoin, BAYC, MAYC, and BAKC NFTs.
    • ApeCoin can be staked directly up to any amount during the Period, but if attributed to an NFT can be staked up to the following caps for each NFT:
      - BAYC NFT: 10,094 ApeCoin
      - MAYC NFT: 2,042 ApeCoin
      - BAKC NFT: 856 ApeCoin
    • Users can commit any number of BAYC, MAYC, and/or BAKC NFTs to the incentive pool during the Period. Committing an NFT is the act of attributing ApeCoin for a specific NFT, which then allows that NFT to earn and claim incentives, as long as the ApeCoin remains attributed. Think of it as if the NFT is a safety deposit key. The NFT provides access to the staked ApeCoin tokens previously attributed to it.
    • A BAKC cannot be committed on its own, regardless of any direct ApeCoin being staked. It must always be paired 1:1 with a BAYC or MAYC NFT in order to be initially committed. This requires ApeCoin to be attributed to each of the NFTs.
    • Once the BAYC or MAYC is paired with a BAKC, the BAYC or MAYC cannot be paired with another BAKC, unless the original BAKC that was paired is uncommitted to the incentive pool.
  • ApeCoin Token Lock and Claim:
    • Accumulated ApeCoin can be claimed at any time without the need to also claim staked ApeCoin and without affecting the commitment status of an NFT.
    • All accrued ApeCoin generated from a stake is claimed at once, when initiating a claim.
    • The staked ApeCoin can be claimed, along with its accrued ApeCoin, directly by the original staking wallet. However, these are two separate transactions.
    • Staked ApeCoin is still valid to be used to vote in the ApeCoin DAO.
    • To claim the accrued ApeCoin from a committed NFT, the same NFT needs to be present in the wallet to claim. If another user has an NFT that is committed to a stake, they can make the claim even if they didn’t make the original NFT commitment. Think of this as the NFT being the key to access the staking incentives.
    • Users can stake ApeCoin and commit NFTs to the staking pool at any point during the Period, but the duration of an active stake directly affects the accrued ApeCoin, due to the time-weight combination incentive structure.
    • The NFTs can be uncommitted from the staking pool by the NFT holder at any point in time.
  • ApeCoin Accrual:
    • The ApeCoin that can be accumulated from staked ApeCoin, or any ApeCoin attributed to NFTs, is dependent on the amount of ApeCoin staked by the user, the duration of the stake, and the total amount of staked ApeCoin in the relevant staking pool.
  • Maintained NFT Tradability:
    • Only ApeCoin is ever staked. The owner of a specific NFT at the claim point is able to claim the accrued ApeCoin tokens attributed to that NFT, even if they were not the one who originally initiated the staking commitment.
    • Although tradable, committed NFTs cannot be recommitted, unless a holder has previously uncommitted the NFT.
    • The Foundation’s website UI will be updated to have an option to enter the BAYC, MAYC, or BAKC token ID and check the following:
      • Is the MAYC, BAYC, or BAKC currently committed to a staking pool?
      • Does the BAYC or MAYC have a committed BAKC companion NFT?
    • NFTs that are currently committed will have an updated status in a UI that serves as a notification for potential buyers, so they’re aware of the commitment status, and the amount of ApeCoin that NFT has earned, before purchasing.

STEPS TO IMPLEMENT

  • Smart Contract:
    • Development of the Staking Process smart contract
    • Smart contract security audit and QA
  • A proposal to be drafted and approved via the ApeCoin DAO for the allocation of ApeCoin for Staking Process, and the duration of the Period.
  • Website (Design and Implementation):
    • Staking and unstaking UI, for both direct ApeCoin stake and commitment of NFTs to stake
    • Status of staking pools: amount remaining
    • Accrual rate: current accrued, current weight
    • Claim: unclaimed ApeCoin balance
    • Market Tools:
      • NFT search and staking status
      • NFT ApeCoin commitment
      • NFT ApeCoin commitment lockup status

TIMELINE

The estimated time frame is 12–16 weeks.

OVERALL COST

$300,000 – $500,000
Estimate includes smart contract engineering, full stack engineering, UI/UX design, Project Management, QA, and auditing services.

18 Likes

Thanks for putting this together. The caps were the original resistance to AIP4/5 but it has now shifted to claims or stakes. I’d like to get some more input from the community on this point.

Staking has the ability to incentivize long term lock up of $APE which is multiplied through an auto-compounding feature. Gas fees from staking and unstaking will further disincentivize users from dumping tokens.

Claiming gives users regular output of tokens for participating in the pool. This may lead to frequent token dump when claims are available. Further concern is around whether the BAYC/MAYC NFT or $APE becomes a security at that point as illiustrated by @mg here:

In the long run, both will release equal amounts of $APE into the ecosystem if we stick with the original pool sizes. <feel free to comment below if there are other pros/cons to either staking or claims>

Below is a poll so we can get a temp check from the community here to signal which they are in favor of. This will save us time, build consensus, and prevent a, “first to 51% vote,” on snapshot which will likely leave a large part of the community upset.

  • Stake
  • Claim

0 voters

3 Likes

@RedVan thanks for your comments. As mentioned in my incipit, I think to move forward we should keep it simple, believe in the professionalism of Animoca for the overall framework, and just adding the critical element of caps, without adding other complexities object of contention.

Regarding your proposal, from selfish perspective a claim could be good, but without any APE staking I think in the long run we will not benefit as dumping the token could become an issue. Moreover I am of the opinion to keep the current role of BAKC, or else we are changing their role within the ecosystem. Finally I have no idea if assigning now a % of future profits of the DAO to the staking pools makes sense or not. This is why I think better keep it simple and move on, taking home the most important element which are caps, and implement asap the AIP4&5.

4 Likes

Glad you got the clock started on this because I have a feeling the majority are going to just want this. All we needed was caps and we were good to go.

3 Likes

@NFTBeliever thanks, I have no large followers to increase engagement but I think previous AIP was already carefully redacted by Animoca and reviewed by ApeDAO, hence simply adding the caps should safeguard the whole community. I will keep it going.

4 Likes

This is solid, my only suggestion with caps would be to include wording for initial caps, because caps should not be hard, they should be soft caps in that the caps themselves are rebased with the pool allocation rebasing with the average floor price, either yearly or quarterly.

1 Like

@dadjudicator I get your point and thanks for the feedback, probably in the future the caps would be better to be changed based on market dynamics and pool allocations. Still beside the fact that any amount of APE can be staked in the APEcoin pool, any change to the caps could be proposed and passed by the community going forward, regardless of what we write in this current proposal, unless we already include a step by step rule / amounts going forward, something I would not wish to do, to avoid contention points for the time being.

2 Likes

@dadjudicator After further consideration, following your useful suggestion I am thinking to modify that paragraph to clarify for the reader that the mentioned caps are for the Initial Staking Period (note: assumed AIP5 Reloaded pass, each period is 1 year) in order to kick-off the staking process, and intended to be updated in the future with further proposals by the community.
I believe there are several factors to consider for the proper caps in the future, like:

  • the initial drop;
  • the staking pool allocations;
  • ApeCoin can be staked for any amount in its pool;
  • the rewards in ApeCoin received during each period, so more supply.

Overall seems premature to fix a rule now and with this proposal I would encourage the community to consider all the factors during the first year and then come up with a proposal before the following Staking Period, which could fix new caps or even lay down an automatic mechanism for the calculation. Here below the draft wording:

ApeCoin can be staked directly up to any amount during the Period, but if attributed to an NFT can be staked up to the following caps for each NFT during the Initial Staking Period:
- BAYC NFT: 10,094 ApeCoin
- MAYC NFT: 2,042 ApeCoin
- BAKC NFT: 856 ApeCoin
The caps for Staking Periods following the Initial Staking Period will be decided with a proposal to be approved via the ApeCoin DAO before the start of each following Staking Period, once the Staking Pool Allocations for each following Staking Period have been determined. Waiting for or in the absence of an affirmative vote, the caps for each following Staking Periods are the same as the previous Staking Period.

3 Likes

This topic was automatically closed after 7 days. New replies are no longer allowed.

Thank you @giacolmo.eth for your ideas and the ApeCoin DAO community for the thoughtful discussions. A moderator will get in touch with the author to draft the AIP in the appropriate template. Once the AIP is drafted and meets all the DAO-approved guidelines, the proposal will be posted on Snapshot for live official voting at: Snapshot

Follow the here as further updates will be posted here in the comments. @giacolmo.eth please see your messages for the next steps.

This proposal is moved to Live AIP. You can find it here: AIP-21: Staking Process with Caps (1x drop) - Process