- The Ground Floor
- The Controversial ApeCoin DAO Vote
The Controversial ApeCoin DAO Vote
Breaking down the all important ApeCoin vote...
In today’s edition of The Ground Floor we are breaking down AIP-304 ~ the controversial ApeCoin DAO vote…
The Controversial Vote
It’s no secret that Bored Ape Yacht Club holders have received a bounty of benefits for holding their BAYCs over the last 2+ years.
At its peak, the airdrop(s) holders received amounted to well over $250,000, however, as the Web3 world transitioned from a bull market to a bear market ~ the value of these assets have declined by upwards of 90%.
One asset that played a pivotal role in rewarding BAYC holders is Ape Coin ~ the governance token created by Yuga Labs, governed by the ApeCoin DAO to determine how they will spend the DAOs 300,000,000+ Ape Coin allocation.
The ApeCoin DAO has been subject to significant criticism in recent times.
One individual who hasn’t held back in criticizing the inefficiencies of the ApeCoin DAO is the infamous Machi Big Brother who took to Twitter to criticize the $500,000 the DAO has spent on legal fees alone over a 3 month period.
His Proposed Solution?
In July of this year, Machi, an active member of the BAYC community since its inception shared his plan to restore confidence in the DAOs ability to allocate its $300+ million in assets with the formation of the Digital Art Movement DAO.
This DAO would receive 11 million Ape coin from the ApeCoin DAO in order to curate and acquire a collection consisting of Yuga assets (BAYC, MAYC, BAKC and Punks), along with other notable NFTs “to accelerate the advancement of the digital art movement globally.”
Should the Digital Art Movement DAO receive the required funding, at least 70% of the assets they acquire would be Yuga Labs assets.
The Digital Art Movement DAO builds on a thesis many participants in the Web3 world share today ~ digital art is one of the best use cases for NFTs.
To advocate for the continued appreciation of digital artwork minted on chain, the DAO will take on the task of reaching out to “institutions of art appreciation such as museums, schools, and galleries and begin arranging collection exhibits, and gallery showings.”
Furthermore, The DAO is seeking to grant notable art institutions such as The LACMA, The Getty Center, The Louvre, The Met ownership of these NFTs.
While it’s easy to appreciate the goals AIP-304 is seeking to accomplish, it’s important to recognize the benefactors of AIP-304 passing, and the shortcomings of its suggested approach.
At the time of writing, Machi Big Brothers main wallet is one of the largest custodians of BAYCs with 146 Apes, in addition to owning 76 MAYCs.
To avoid a potential conflict of interest arising, AIP-304 outlines “the Digital Art Movement Collection will be restricted from buying any NFTs owned by Machibigbrother & the tastemaker team.”
Nonetheless, with 50% of the 11 million Ape Coin being deployed in year one, and 70% of this 5.5 million Ape coin being invested in BAYC, MAYC, BAKC and Punks ~ it’s abundantly clear that anyone who owns Yuga Labs assets will greatly benefit from this injection of capital into the Yuga Labs eco-system.
Furthermore, it remains unclear why it’s necessary to purchase these assets for them to be displayed in museums, and how this DAO plans to succeed in accelerating the adoption of digital artwork by museums worldwide.
At the time of writing, AIP-304 is on track to meet quorum with 4.5 million Ape coin voting in favor vs 4 million Ape coin voting against this proposal.
It’s my perspective that this vote, and the recent decision by 50% of NounsDAO holders to leave the NounsDAO in order to receive a refund raises very serious questions as to the viability of DAOs as vehicles to successfully allocate capital in the Web3 world today.
Both NounsDAO, and the ApeCoin DAO have access to an abundance of capital that could be used to accomplish any number of goals, however, all too often the proposals that gain the most support simply seek to enrich the people proposing these proposals.
It’s possible AIP-304 will prove to be much more than this, however, I am willing to go on record as having high reservations as to what AIP-304 will accomplish.
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This newsletter is for informational purposes only and does not constitute financial or business advice to any person or entity