ApeCoin: The Beginning of True Decentralization?

ApeCoin: The Beginning of True Decentralization?


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Do you know Yuga Labs? Yuga Labs is the founder of the most famous NFT project Bored Ape Yacht Club (BAYC) and has acquired CryptoPunks, Meebits, Kennel Club and Mutant Ape Yacht Club into their ecosystem.

In addition, Yuga Labs announced the release of their Metaverse platform “The Otherside” to be launched in April. This Metaverse platform is to be powered by ApeCoin.

Source:NFT Other world Twit

Chapter1. ApeCoin?

ApeCoin exists for the Web3 economy. Culture has found new expressions on Web3 through art, games, entertainment and events. The cultural impact of blockchain has so much potential that it is still near impossible to predict what will come next.

ApeCoin is adopted and used as the default token for all new products and services from Yuga Labs, including blockchain games which will be released later this year.

On March 17, the Animoca Brands’ blockchain game Benji Bananas will also be run by ApeCoin.

The total supply of ApeCoin will be permanently fixed at 1 billion tokens. 62% of them are allocated to the ApeCoin community.

Within this allocation, 16% will be airdropped to BAYC, MAYC and BAKC NFT holders.

In addition, 14% of the tokens are for the launch contributors, the team that made the project a reality. Finally, 8% will be delivered directly to the four founders of BAYC.

Source: ApeCoin
Source: ApeCoin

Chapter2. ApeCoin DAO

ApeCoin is not managed by Yuga Labs. It is managed by the ApeCoinDAO, a distributed autonomous organization.

NFTs, such as Bored Apes, are based on a unique blockchain that represent ownership of images, digital art, as well as other physical and digital assets.

DAO is a decentralized autonomous organization that uses blockchain tokens to vote and make decisions in the community.

Unlike some DAOs that allow NFTs to be used for voting, ApeCoinDAO only requires members to hold ApeCoin tokens to participate in voting and community-based governance.

In order to introduce decentralization into the ecosystem, DAO allows all ApeCoin holders to propose and vote on Ape Improvement Proposals (AIP).

Currently, Discourse has five AIPs available for public viewing. AIP 1 proposes DAO structure and AIP 2 proposes the voting process. Next, AIP 3 proposes allocating ecosystem funds.

Animoca Brands has freely drafted AIP4 and AIP5.

AIP4 proposes a staking process for tokens.

AIP5 will talk about the allocation of the stake pool.

Essentially, all BAYC ecosystem NFT holders can claim tokens.

Each NFT allows only one claim and the redemption period is open for 90 days.

Sitting at the top of the Ape Foundation is the board of directors.

Their primary purpose is to manage DAO proposals and serve the community's vision.

Over time, ApeCoinDAO will transform its proposal and voting mechanism into a fully on-chain platform in a community-decided form. DAO can do the following.

  • To replace the appointed company, DAO members are hired to handle project management and coordination.
  • Create a community steering committee.
  • Implementation of on-chain voting
  • Annual vote to elect members of the DAO board of directors (initial board of directors is a short term of six months).
  • *ApeCoin DAO has recruited prominent members of the cryptocurrency community from its board of directors, including Reddit co-founder Alexis Ohanian and Amy Wu of FTX. They will serve for six months and ApeCoin holders will vote for new members for a one-year term.
Source: ApeCoin

Chapter 3. True Decentralization?

On the surface, while introducing ApeCoin and DAO, a closer look at the 1 billion token distribution of $APE shows that it can be more focused on a specific individual.

According to DAO's official website, 15% of the tokens will be airdropped to BAYC and MAYC holders, and Yuga Labs will receive the same amount of tokens.

In addition, the four founders of Yuga Labs will receive 8% tokens and 14% will be distributed to partners like the VC Andreessen Horowitz and game developer Animoca Brands.

The rest of the tokens will be distributed to the Jane Goodall Legacy Foundation, which will have 1%, and the DAO Treasury, which will own the remaining 47%.

Considering that the number of tokens held determines the proportion of votes on governance decisions, there is a lot of room for centralization.

For example, 23% of the total distribution is obtained by Yuga Labs and partners, excluding Bored Apes and Mutant Apes NFT holders, so it becomes a little murky. If NFT holders’ shares are added, the lot share will increase to 38%.

Meanwhile, launch partners like Andreessen Horowitz and Animoca Brands will also have a significant impact on DAO. This is because they ultimately have about 140 million $APE (14%).

Chapter4. Would ApeCoin Be Dominated By Yuga Labs?

The way tokenomics is currently deployed means that VCs and partners can place a significant weight on how DAO operates.

Elon musk and Twitter co-founder Jack Dorsey criticized the centralized project of web3.

This seems to be moving towards a centralized project.

Separately, if Yuga Labs and many other holders try to cash in their holdings, they will make substantial profits and other naive investors will lose money. However, if they choose to take power, they will also be able to shake the way the community operates.

Also, don't forget that Yuga Labs recently acquired Meebits and CryptoPunks IP. In other words, they have the two of the most valuable NFT collections in the portfolio, meaning their dominance in the NFT space is expanding.

It raises questions about whether all of this is part of an effort to build a decentralized Web3, or whether it is another cash-gathering opportunity to act as a disguised centralization.

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