Financial Sustainability of the ApeCoin Dao?

The objective here is to have an open conversation on this topic… This suggestion is not related to or endorsing any particular AIP.

Background
As part of my election campaign, I discussed the Financial Sustainability of the ApeCoin Dao. This is a very broad topic and there have been many suggestions made in the history of the ApeCoin Dao.

Historic Forum Posts

1. Special Council Notes - Former Special Council member @veratheape mentioned an ApeCoin Investment Fund in one of her weekly reports.
2. Withdraw AIP - @Amplify had a withdrawn AIP about an ApeCoin Investment DAO.
3. Discussion - @ssp1111 posted a discussion about Ape16z related to Angel/Seed investments.
4. Passed AIP - Governance Working Group (GWG) OKR4 in AIP-317: ApeCoin DAO Governance and Operations Budget @AllCityBAYC

To get to a sustainable revenue model for the DAO, I see a few broad themes and have listed them here:

1. Types of Income

a) Operational revenue
i) ApeChain related
ii) DEFI related
iiI) Product related
iv) Services related

2. Investments (Funding outside of purely Grant AIPs)

a) Direct managed investments
(This means within the Cayman Foundation)

b) In Working Groups running with Non-Profit structures.
Main focus would be to off-set the operational costs. How to handle P&L? Would the principal be protected?

c) InDirect investments via long term investments.
Such as investing in traditional investment funds General Partner/Limited Partner Model. We would be a LP in these funds and not have a management role. However, the focus would be blockchain/crypto/web3 related. They could be at different stages from Seed, Series A, Series B, Growth etc. What percentage of the funds are invested by the GP? 1%,2%-5% etc. We would need to consider if they need to incorporate any aspects related to ApeCoin or not in some of their investments. We also need to think about established funds vs first raise funds. Look at the risk profile, relative to expected return.

3. Grants that are not investments back to the DAO but aim to use part of the grant for funding investments. AIP recipients can ask for funding to manage an investment program. If the funds given are not invested with a return back to the DAO, they would be considered a Grant and not an investment. How this might work needs some serious thought. Something new isn’t impossible but the risk/rewards for the DAO must be considered.

Summary
Question asked. What is the runway?

One needs to consider that many of the DAO costs are dominated in USDC, whereas the Treasury is in APE. The fluctuation between this pair is important. If the APE price is at 15 then the Treasury of course is 10 times approx. the current value.

Related historic Links:

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Have you calculated the runway based on the current holdings and yearly burn rate? (I’d suggest just using the actual amount of $APE that the DAO sent to pay salaries and AIPs in 2023.)

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Love that you’re picking this discussion back up

I think it’s the next logical step for us. Learn from the projects which did not cement their revenue models in time and thought that burning through investor money (just drawing a brief similarity) was feasible in the long term, but we all know better

At one point or another, we have to reach a point of financial sustainability and not just burning through our liquidity. For this, we’ll have to go back to the basics. But If we’re able successfully implement this, then we’ll be unstoppable

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It is good to clarify that SC and Stewards are not employees of the Cayman Foundation. They are service providers to the Cayman Foundation, such as the Special Council.

However, Stewards are NOT directly service providers to the Foundation, but in the case of the Governance Working Group it is a Non Profit LLC which is a recipient of an AIP. The Stewards are part of that corporation, but not as employees. If the Cayman Foundation were paying salaries they would be also paying sick leave, holiday pay, health insurance, pension, potential redundancy costs etc.

However, I understand what you are trying to say that we need to know the total costs per annum.

Once calculated we can compare OPEX to Grant expenditure and in the future to Grants and Investments.

On a side note, it is very important we don’t confuse Grant giving with Investment funding.

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Salaries of DAO employees, such as yourself. :slight_smile: But ultimately all that matters is the burn rate.

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We are not salaried employees. I am just clarifying the facts. For example, GWG had to pass an AIP for funding.

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Fam, I think you get what I mean. To be clear, initiatives like this can’t even be contemplated if you have no basis for what you’re trying to achieve, which you do not. If you do not understand the burn rate, you don’t understand how much income you need to generate. If you don’t know your runway, you don’t have a clue on how swiftly you need to act.

Instead of fighting over semantics, do the basics.

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That would be great to know. Maybe the Governance Working Group can calculate the numbers? @bigbull

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I tried to use the new treasury tab on the website (which is really neat), but it seems to have lumped in staking rewards payouts in the overall DAO spend. This breaks it for my use case, as I’m pretty sure staking pool rewards come from a separate pool of $APE that is not related to the DAO’s overall amount of funding.

Although if I’m wrong about that and the funding pools are shared, I’d advocate eliminating staking as soon as possible, as those payouts are in the neighborhood of $10,000,000 per month. That would make an immediate massive impact that would likely outweigh any other initiative to generate revenue by several factors.

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Exactly this. But I am also certain that the moment something like this is seriously considered, a lot of people will be “activated” and come here to defend it. This is by far the largest impact thing that could be done.

Even from a learnings perspective, staking is so 2021. It was a ponzi scheme that worked until every project independently discovered that it’s not sustainable. Very few projects seriously consider staking (especially such basic staking like ours) in 2024.

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Hi @mattborchert,

The funds for staking are deployed on a quarterly cadence from the Ecosystem Fund, with funds reserved, based on the original AIP.

The emission program (staking), would end in just over a year from now.

There’s also some discussion around this AIP to end NFT-based staking, continue single-sided staking, and do an airdrop.

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Yeah, thanks Lost. My general POV was that we had a reserved amount of money for staking as intended by the founders. Then a separate fund for the DAO to operate.

I’m personally fine with letting the original staking terms run their course and end in a bit over a year, as that money had already been set aside for exactly that purpose, and people may have purchased NFTs / $APE based solely on those terms as well.

But regardless, moving forward, it’s also my POV that what is best for both $APE and the BAYC ecosystem NFT prices is to end staking. Stop with the Ponzinomics, stop with the airdrops, and deliver real sustainable value. Apes should be for the culture, not for DeFi.

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Real and sustainable value is what really matters most!
nothing survives without it!

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This issue definitely needs to be discussed. The DAO is preparing its own destruction by constantly establishing funds. As long as no income can be produced, DAO will have nothing left to give and will have a worthless treasure. For this reason, the perception on social media is distorted and only short-term thoughts prevail. Unless the DAO creates a net revenue stream for itself, I’ll be on the negative side of the votes…

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A gentle reminder, please don’t make assumptions or impolite comments to members of our community.

Much of the information you are looking for is located in the APE Transparency Reports, which are published every quarter:

3.3 OUTFLOWS
3.3.1 ADMINISTRATIVE EXPENSES
The Foundation incurred administrative fees and expenses of APE 226,396 during the Period.

3.3.2 CUSTODIAL FEES
The Foundation paid APE 299,267 to Coinbase for custodial services in the Period.

3.3.3 LEGAL FEES
The Foundation paid legal fees and disbursements in the amount of APE 742,716 during the Period. This relates to compliance review, entity administration, general licensing, and other corporate matters.

3.3.4 SPECIAL COUNCIL FEES
The Foundation paid APE 214,495 to the Special Council.

These don’t include GWG outflow/cost, which are including with other AIP recipients here - 3.3.5 GRANT EXPENSES

As you can see, the majority of the Operational outflows are not from the GWG.

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This isn’t necessary. My statements about cost were also not relegated to the GWG, but the DAO as a whole. My ask to you is that instead of consistently talking down to other members, you work to learn from their experiences. I could go into further detail, but there are many members who are concerned about your general conduct towards others, and specifically how you consistently speak down to them.

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You can find more info here.

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Yeah that would make sense.

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Authentic and lasting value is essential; without it, nothing can endure or thrive successfully in the long term.

Establishing funds is key. Without income, the DAO won’t have anything of value. This impacts how people see it on social media and encourages short-term thinking. If the DAO doesn’t start making money, I’ll probably vote against it.

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