AIP-183: Cartan’s Proven Track Record & Continued Commitment to Advancing the ApeCoin Ecosystem

Yuga Labs LLC, Incorporated in the State of Delawere, USA. I personally think and believe ApeCoin DAO should be registered and incorporated as a legal entity in the USA in order grow and have permanent presence globally.

The ApeCoin Foundation is registered in Cayman Islands, which is fine, but the ApeCoin DAO should be compliant with regulations and law for its long term operations as a global DAO entity. I am willing to take the responsibility and work for that if I will be given the opportunity to have an assignment by the ApeCoin DAO.

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Fair enough, but I do think the vast majority of attorney’s in the USA have directed DAOs, especially ones with large treasuries and worldwide token-holders, to avoid incorporating in the USA until clearer regulations are set.

Not a lawyer but have sat in many meetings with legal counsel for NFT projects and DAOs.

FYI - Yuga Labs is not an LLC but a C-Corp – set-up for the ability to sell registered securities to accredited investors as recognized by the SEC. Lots of paperwork.

Thanks for your input.

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I completely agree with this. It is precisely why I await @btang response to my questions because we cannot be confident that Cartan’s AIP, as it is presently written, will pass its vote. Therefore, we need to understand if Cartan has contingency plans or if it is going to force the DAO to come up with its own. In either case, the DAO needs to be informed as soon as possible.

@btang Please advise. Thanks

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Appreciate and support this common-sense take on the situation at hand.

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Appreciate your quick feedback! Yes, lots of paperwork and CPA / Lawyers meeting sessions. We are not experts, and so we must consult and work with those experts who specialized in this specific area, and get things moving forward and align with the ApeCoin DAO goal and objective. It will take times and lots of efforts!

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@btang a supporting table to compare and contrast Initial Scope and Expanded Scope, as @BoredApeG suggested, is absolutely necessary. I just reread your first post and it’s very difficult to discern which tasks and responsibilities are actually an expansion. For example:

Here you concisely document the Initial Scope:

The 2nd bullet reads “To act as a team of moderators, administrators, and lead in Discourse”

Then immediately below it you write:

Here in the 2nd bullet point you write “Acting as the team of moderators, administrators, and lead in Discourse”

It’s literally word-for-word the Initial Scope. There are many more instances related to operational support, project management, reports, etc. Communications seems like the only true expansion IMO. I hope that we can get you guys paid and that you can continue to service the DAO, but clarification is necessary.

On a separate note - I’d like to see Cartan push back and notify the DAO of scope creep. It’s not good for progress towards decentralization. There are members creating and proposing working groups, but when Cartan absorbs more roles, the less of a DAO this becomes.

To summarize my position: I support a 1-year extension of the Initial Scope. I wouldn’t support an Expanded Scope without itemization of the roles and responsibilities deemed “Expansion”.

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I agree that when Cartan absorbs more roles, the less of a DAO this becomes.

Hi Matt, I definitely agree, and I am proposing all like-minded individuals who has demonstrated interest and integrity to serve the ApeCoin DAO. 44 Special Council candidates to form 4-5 working groups with 6-7 individuals and write few AIPs supporting each executive working groups.

I have read all the candidates profiles, and we have well diverse background of candidates with expertise knowledge in their fields including Accounting, Finance, Marketing, Operations Management, Strategic Planning, and DAO
Governance!!

Yes, I agreed 1-year extension of the initial scope, and I will vote in favor of the Cartan’s AIP as individual member. ApeCoin Token Holder, Ken

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Hi All - completely understand and fully appreciate the candor of comments thus far. My two cents fwiw, pointing out that I currently am CFO for a bank with about 20 yrs experience in the finance industry.

Though Cartan is raising their fees by more than an insignificant amount, I actually think they were underpaid to date and the community got a very good deal……likely the reason for their proposal. Though Cartan certainly brings a lot more value, I’d conservatively compare their role to a fund administrator. Fund admins most commonly charge fees based on AUM, or in our case total value in the community which is circa $2 bil and growing.

Cartan’s proposed annual fee is about 20 basis points of the community’s value which is very reasonable when comparing against common fund admin fees charged in the fund industry.

I get it, there is “sticker shock” with the year over year increase but let’s keep it in context with recognition of how much value Cartan has brought and will continue to bring going fwd.

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Welcome to the forums @RogerRabbit - glad to have you here.

And thanks for reminding us of The Cartan Group as a fund administrator. I should have looked at it that way too (sit on the board of a community foundation and our fees are based on Assets Under Management and grants awarded).

I wonder why The Cartan Group hasn’t framed things through that lens? It’s totally reasonable and accepted practice. Please reach out to them immediately!!:laughing:

Even if they charged 1% of AUM and 5-10% grants awarded, their new AIP request would be less. Huh.

Anyway, thanks for posting and for helping reframe the new contract – any chance of you tweeting about this? That’s where most candidates for SC and voters get their news.

Cheers
SSP✌🏽

PS - Shave and a haircut …

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Thank you for chiming in. I value your perspective and think you raise a very valid point but I’d like to add that we are not a typical fund even if our costs may be comparable to one. I’m half way with you and Cartan on the merits of their ask and understand the need to ensure resource requirements are met. But with a caveat. We are a DAO with blockchain enabled tools at our disposal that traditional funds lack. Partly why DAOs even started! Our goal is to become increasingly decentralized, secure, efficient and cost effective especially in our governance and maintenance processes whether it is through more advanced voting mechanisms or trustless on chain administration enabled more by token holders and less by the equivalent of a centralized fund management company.

like yourself and many others I fully appreciate Cartan’s track record of contributing to DAO’s smooth running and administration. This is not to say we haven’t had our own fair share of challenges especially with some AIPs not going through “admin process” in a timely manner which is not entirely Cartan’s fault because often the perception has been that the delay has been on the Special Council side. In any case, we hope to have a more efficient and consistent workflow once new council members are elected plus a more transparent communication method between AIP authors, the council and the community. It would be nice to learn how Cartan’s offer to scale their activities will fill any of these gaps specifically. Others have mentioned before that a comparative table showing original vs scaled scope backed by data that warrants the need for scaling. I also think that would be a very helpful addition.

My suggestion would be for @btang and their team to author 2 AIPs. One to establish track record and confirm their commitment to the original scope of work, if that’s still the case! We would love some clarity on this as well.

The second AIP to include a proposal with additional scope, costed and itemised, that explains what has changed since the original AIP to warrant a more than double increase in fees, outlining how funds are allocated across their services. AIP-121 by @giacolmo.eth which was voted in by 100% of voter on snapshot has some useful guidelines on how to state costs and information about the team in a more transparent way. Would be great if Cartan could integrate some of these guidelines in their AIP draft. :handshake:

I’d also appreciate some thoughts on how Cartan will continue to support and enable decentralization of the DAO as we move forward. Id love to see concrete examples and a roadmap on how they see their role in a more decentralized Apecoin DAO.

Again for transparency reasons, the title of the AIP needs to reflect its nature which is an ask for a raise with an offer of additional services. This is not currently clear from the title. A more relevant title will be helpful to the wider community voting on snapshot.

Finally, I think allowing folks to vote on two AIPs will offer some clarity and reassurance. Also that a potential vote against the extended scope of work based on current presentation of costs is not necessarily construed as a vote of no confidence in Cartan’s valuable achievements and contributions to the DAO to date.

Thank you @btang and Cartan for your AIP idea and thanks to everyone else for your constructive contributions to this important discussion. :saluting_face:

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Hi RogerRabbit

Welcome to the forums!

While I understand what you are attempting to get at, I do not believe fees based on AUM is an appropriate comparison here even as a ‘conservative’ comparison. Let’s dive in utilizing the figures from the Ape Foundation Transparency Report November 2022:

Most of the Ecosystem Fund is presently locked, meaning it would not be reasonable to include in an ‘AUM’ calculation. The fund is no where near $2B…

Total Unlocked Funds = 173,750,000 Unlocked + 3,198,334 Unclaimed APE
However, even then, the Year 1 budget “to manage” was only for 28,200,000 APE per AIP-3

So let’s say our starting point is:
31,398,334 (28,200,000 APE + 3,198,334 Unclaimed APE)
x $4 (keep it simple with the current price)
$125,593,336 USD ‘assets’ at $4/APE

$1,500,000 Cartan Fee ($150,000 x 10 months of March - December)

$1,500,000 / $125,593,336 USD = 1.19% “Management Fee”

Sure that present fee could sound reasonable for your position, but you then need to factor in that Cartan is not actively managing these funds for a return on investment. If we are going to look at it from an AUM point of view, then it would arguably be based on Cartan’s success in facilitating the disbursement of funds via approved AIPs.

Funds Allocated
181,267,624
(124,690) Normalize: Staking prociess which was already allocated for at inception
(175,000,000) Normalize: Staking funds which was already allocated for at inception
6,142,934 Total Funds allocated for ALL AIPs have have been passed
HOWEVER, most of those funds were from insider AIPs
(4,700,000) Guy Osery (launch partner and investor in Yuga labs, and none have been spent yet)
(1,000,000) Bug Bounty Program (relates to staking)
442,934 Meaning if you normalize for the above, it would be reasonable to connect that Cartan’s AIP involvement resulted in only 442,934 APE funded
67,500 Add: Let’s also give them Grants Approved by Special Council ($370,000USD / $4 APE)
510,434 TOTAL Funds allocated for ALL AIPs have have been passed
217,907 3.3.1 ADMINISTRATIVE FEES - These I believe are substantively Cartan Group
43% (217,907/510,434) Conclusion: Cartan’s fees are 43% of the amount of APE that has been funded by AIPs unrelated to the launch partners/already provided for at inception

Additionally, Ape Foundation also pays Coinbase Prime for custodial services which is presently accrued at 485,367 APE. This highlights that the majority of funds are held in custodial services, not ‘actively managed’ by Cartan - and those costs are not being factored in my above calculations.

All of the above is to illustrate that AUM is not appropriate; IMO it’s application would be more detrimental to Cartan’s case of comparing fees to ‘fund performance’ because barely any APE have been approved for spending via passed AIPs.

@ssp1111 please give me your thoughts as well on ^

Cartan does provide terrific value to the DAO, but it should really be seen as a service provider for specific contracted services. This is why we are trying to drill down on the specific services it wishes to provide in-scope currently or expanded at higher rates.

Getting to the meat of all this…Cartan’s present AIP has an underlying assumption that it needs to scale its services because the DAO/its members are not expected to change its behavior (i.e. we are going to be forever useless in presenting AIPs to operationalize the DAO, we will never implement working groups, etc.)

However, we are in the middle of elections and the general sentiment is that the DAO will be operationalizing over the next couple of months. The DAO is simply looking for more time instead of committing to 12-months at 2x service costs when we have not even completed our first election yet!

If in the next 2/3 months the DAO can’t get it’s act together by electing appropriate new Special Council members and starting to make moves towards decentralization, then sure, Cartan might as well run the entire DAO :frowning: :slight_smile: However, all one has to do is look no further than the passionate members replying in this thread - a shift/help is evidently coming and we hope Cartan can come to a reasonable understanding on what it wishes to do as we get through this election. The DAO can certainly come to an agreement on something that makes economic sense for Cartan, but it is doubtful to be this AIP, as it is written, if asked to be voted on within the next few weeks.

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Agreed with Novo here. Although legacy institutions are a fair place to start thinking about baseline operations and costs, they cannot be the endpoint. We are looking for new structures. @RogerRabbit, I personally think it would be awesome to put your expertise to determining how we might create a more decentralized yet sustainable structure instead of using that expertise to justify legacy mores.

Not to mention if Cartan is the DAO admin expert here, they have the most knowledge about how much stuff costs. Sticker shock shouldn’t even have been a potential outcome, unless…

this whole thing is new, and they are feeling their way through the darkness just as much as anyone else (which means overreliance on them is a mistake!)!

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Just some thoughts and couple questions:

Would it be a good idea that the ApeCoin Leadership Team initiates to have a face-to-face meeting session with Cartan Leadership Team, and to clarify some of services in Cartan’s AIP?

Also, to what extent the ApeCoin DAO can independently operate and collaborate with Cartan’s as a service provider?

Can some of the service items be programmed on the smart contract as the way to decentralize the decision making process and reduce the Cartan’s administrative overhead?

“Cartan’s present AIP has an underlying assumption that it needs to scale its services because the DAO/its members are not expected to change its behavior (i.e. we are going to be forever useless in presenting AIPs to operationalize the DAO, we will never implement working groups, etc.”

Yeah, I can understand that there is such assumption in Cartan’s present AIP, and that’s one of the reasons, I am proposing that ApeCoin DAO can start thinking, brainstorming, forming some executive working groups, and eventually decrease the reliance on centralized governance such as Cartan group or any other service providers.

Maybe negotiate the extension for another 6 months (halfway), and itemize the cost of service items per accounting standard practices.

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I actually agree with Cartan on this point! There will never be any scenario where anything close to a majority of people with the ability to participate in a democratic state will be motivated to actually participate to the level that is required for true democracy.

However, governments (Cartan in this case) always think the response to that scenario is more centralization and a wider scope of duties. Nope! The better solution is a public-facing working group that leads the DAO towards building smart contracts that eventually take over the group’s duties.

We’ll see if the DAO eventually gets to this or votes for Cartan’s AIP. Will be interesting to see either way.

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Hi All
Cartan have spelt out a pretty extensive list of what they have accomplished and I think most of us are of the view that the DAO would not be in the shape it is without their support - they do have a proven track record in an emerging industry, which can be challenging to learn and navigate. I do think that there are a lot of great thoughts and questions in this thread about what our objectives and needs are in this space, such as:

  • progressively decentralise the operations of the DAO and a roadmap to do so
  • offering/advertising new scope of services to existing and interested DAO members
  • allowing the special council elections to take place
  • what is the appropriate amount of $APE compensation for aligned objectives (particularly on extended scope of services)

Given the timeframes involved and the level of service Cartan have provided but the uncertainty over the extended scope and its associated rate card/effort. I think it would help if Cartan puts up 2 proposals:

  1. For a 12 month extension of the current scope of services: I would expect this will include some increase of in expenditure for the increased workload but this should be justified by time & materials type calculations.
  2. For extended services: this should be quite detailed including a break down of the scope and each service should be itemised explaining the scope, frequency and deliverables along with costs and resourcing. It would also be great to have Cartan’s best practice view on the roadmap to decentralied DAO operations and admin as a service within this scope

I think Cartan have done a great job and we should continue the current scope of service with allowance for increased costs where it can be justified with workload/effort calculations but given the current direction of the DAO and the timelines associated with the renewal, I believe it is impractical to bundle the expanded scope with the renewal. This approach would ensure that the services we need can continue, that Cartan can resource up and be appropriately compensated and that the DAO can selectively (or in its entirety) engage Cartan for extended services on a longer term journey to decentralisation.
Thanks
St01c

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Random Thoughts in no particular order:
Totally agree with most all of the points made above by you, Novo, Mantis, Stoic, etc. And while the nitty-gritty of the details are proving to be contentious, I just wanted to highlight to the community that there are other lenses in which to view Cartan’s proposal.

Yes, TCG is not a traditional Fund Administrator, but I do think @RogerRabbit has presented a compensation path to consider that is tied more to Assets Under Management and Grants Awarded over a General Service Agreement.

True, TradFi AUM metrics are NOT the same here, as TCG does not manage these tokens, but perhaps the “Assets” under management could be the AIPs, the operations of the DAO, the RISK Management, etc (most likely shielding all members of the DAO from the gray areas of the law) :thinking:.

By the way, most community foundations (at least in the US) do not actually manage funds directly, they use third-party fund managers yet still charge a management fee to their donors/clients. But I digress.

Decentralization?
With a handful of outliers notwithstanding, the community has proved itself to be uninterested in decentralization since launch (9 months). Basically leaving it to the Special Council and TCG to keep things going. I’m glad to see more conversations taking place towards that end goal, but I also believe it’ll take the better part of 2023 to get us back on that path – remember, many candidates with their own priorities, many whales with their own agendas, many members still not engaged.

The Cartan Group?
I’ve read a few comments, posts and Twitter threads where the next move is to vote NO on Cartan Group’s AIP, get rid of them and “we” can do better. Really?

I appreciate Novo’s call for 2 AIPs to vote on – I also imagine the community voting NO on any AIP with increased costs, only voting YES to Cartan Group if for a limited period and then spending the next 3-6 months trying to figure out which “Working Group” will takeover a Cayman Island’s responsibilities, how much each “officer” will deserve to get paid, what processes to nominate and elect these officers should we embrace, etc., etc.

Yep, this:

Summary
We’ve all heard the nauseating advice every VC doles out to every startup founder:

“Gonna take twice as long and cost twice as much”

In practice, it’s not that far from the truth, especially for those that have never founded a company or have had any experience running a startup.

During the next few weeks, I’d like the community to realize what’s in store on the macro-side of this debate, rather than continuously focusing on the micro, which we will tackle together as we get past the elections.


So yes, vote for keeping Cartan Group in place until we can get our own sh*t in order – oops, sorry for that, don’t usually say that :laughing:. The question is one or two AIPs and will The Cartan Group react to the community’s feedback or not?

Cheers
SSP :v:t4:

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Well, you absolutely took my quote out of context and did the exact same thing I warned against in my actual statement:

This is my follow-through to the above-above statement, which means the Cartan AIP in its current form does not get my vote. I just want to make that clear for anyone reading this thread.

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I appreciate everyone’s thoughts and points of view here. I started typing out a response and it turned into a pretty big document so I turned it into an Open Letter (maybe I wrote to much, lol) and posted it in General An Open Letter from bc

Quick note: I did not notice this basis points of AUM note above before I wrote the letter. I do not agree Cartan should be charging bps on assets because we do not make asset allocation decisions. But I appreciate the thinking behind the idea and would be happy to answer any questions from a fund admin perspective (having a lot of experience in that industry

bc

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I wanted to provide some background and additional clarity on this AIP.

  • We have already agreed to a 3-month extension on the current terms in AIP-113
  • An extension of 3-months is the same as an extension for 1 year or any other longer timeframe; at any point after 3 months, the community can propose a new AIP to replace Cartan
  • The Extended Scope of DAO Operations (5 areas) is inclusive of the Initial Scope (1 area); nonetheless, at a minimum, it is 4x greater than the Initial Scope
  • Any discussion of the “current service level” or its extension should be clear that that is the Extended Scope of DAO Operations, not the Initial Scope. We have been performing these functions since almost the very beginning when it became evident we needed to take them on. The cost proposed in this AIP adjusts for what we have already been doing as well as budgets for the inevitable additional resources we’ll need as each area increases in magnitude (by multiple fold)
  • Every AIP, from submission as an AIP Idea to its funding or implementation, has at least 50 action steps (in the most simplest scenario), such as something as small as confirming to the author that the response has been received, to preparing a 10-page or more AIP Analysis Report, to working with legal counsel to execute the grant agreement. The community is and will continue to grow and propose more and more AIPs, so naturally, we need more resources to keep up with the community.
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Appreciate this take. Cartan does great work and has acted as a responsible and trusted steward of the DAO.

While the ask is an increase, allowing cooler heads to prevail, taking adequate time to digest and determine the reasoning around the increased ask, and ultimately coming to a consensus around the best path forward that supports the highest probability of the DAO’s long-term health needs to remain the core focus.

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