Category: Process Author: The community (facilitated by @rdm_41)
ABSTRACT
TLDR: This is the same proposal as AIP-4 which got voted down, with two major changes. First, there is a limit on how much $APE can be staked per each NFT, otherwise known as a cap & second the cap for each NFT included in the proposal will float & adjust monthly based on a TWAP (time weighted average price) of the floor price.
This AIP proposes a rewrite to the staking system proposed by Animoca Brands in AIP-4 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).
Yuga Labs has done a phenomenal job for all of us in the community, but releasing the token & then dropping 5 proposals written by other companies, without giving our community a way to contribute or the proper time to discuss, caught many members of the community off guard. While we trust Yuga always has our best interests at heart we want to be a part of this process & contribute to running this DAO.
Why is a rewrite needed? There are three main reasons:
Because the current proposals by Animoca Brands are already in need of work as cited by their CEO here: https://twitter.com/ysiu/status/1507056660405112849?s=20&t=NKnOYl76-jPmih8dD3rGjQ
Because staking is an important mechanism, long term, for our community & it only feels right that we write this proposal.
Because this DAO has a major chance of success. The members of ApeCoin DAO have both a major financial incentive and a deep passion for our community. You can’t ask for more, when asking people to be members of a DAO. We are the community. We are the DAO. LFG APES.
After much thought & discussion by the community in our Twitter Spaces, the general opinion is that Yuga was likely heavily involved with drafting & overseeing the drafting of the previously proposed AIPs from Animoca Brands. There are many considerations that we need to consider like whether or not what we are doing will make any of our NFTs or tokens considered a security, what the tax implications are of what we are proposing, & many other complex issues that have likely already been thought through in this initial proposal. With all of these things in mind the community feels it would be best to re-propose a very similar proposal, written by the community, with some minor changes, like a cap on initial staking amount per NFT & a few other minor tweaks & clarity.
In this proposal 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, with the BAYC ecosystem NFTs remaining in their owners wallets at all times & remaining tradeable at all times.
MOTIVATION
Staking models should seed the growth of the related token and NFT ecosystem, for the long term benefit of NFT holders, $ape coin investors, & members of the overall ape community (dogs are members too). Staking models do this by expanding the audience while incentivizing early adopters and existing ecosystem participants.
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
The 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 helps to provide liquidity or the option of liquidity to NFT holders, helps to ensure that sales still happen of the NFTs which Yuga Labs makes a cut of (a very good thing for this community), & allows anyone in the world to join the community at any time & participate in staking.
SPECIFICATIONS
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.
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 as well as unclaimed ApeCoin as well. Just to clarify, all ApeCoin earned from staking, bought on the open market, & earned from staking but unclaimed will be counted as ApeCoin to be able to be used in the voting process for 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, the longer the ApeCoin is staked the more ApeCoin balance will build up. The NFTs can be uncommitted from the staking pool by the NFT holder at any point in time.
NFT Initial Staking Cap Limits (1st month only, then TWAP):
Each NFT in the BAYC ecosystem is different and will carry a different cap on the initial amount of $ApeCoin that it will allow to be staked in the respective pool. These limits are as follows:
Bored Ape - 10,094 $APE Mutant Ape - 2,042 $APE Bored Kennel Club - 856 $APE
Example: A bored ape will allow an initial stake amount of no more than 10,094 $APE. You can stake less than that initially & always add to that initial stake balance, but you cannot contribute more to that balance per each NFT. This works the same for mutants & dogs.
Monthly Adjusting NFT Cap (TWAP or Time Weighted Average Price):
In order to allow for each NFT in the ecosystem to provide the most benefit to it’s owner, the $ape cap should adjust on a monthly basis. The formula for adjusting this cap will be as follows:
12,992 $APE x (the NFT’s Cap %)
BAYC Average Floor Price + BACK Average Floor Price + MAYC Average Floor Price = Total Floor Price
BAYC Average Floor Price/Total Floor Price = BAYC Cap %
MAYC Average Floor Price/Total Floor Price = MAYC Cap %
BACK Average Floor Price/Total Floor Price = BAKC Cap %
Average floor prices are to be taken daily (at the same time) via an automated process and Opensea is to be used as the marketplace of record. If possible & easy enough it would provide the most clarity to the DAO to publish this data regularly & autonomously. Floor prices are to be valued in ETH terms.
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.
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:
Does the MAYC, BAYC, or BAKC currently have $APE attributed to it via 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
A proposal to be drafted and approved via the ApeCoin DAO for the allocation of ApeCoin for AIP-6, and the duration of the Period. (Pre AIP Approval Time)
Development of the AIP-6 staking smart contract (1 month)
Website design & implementation to include: 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 (1 months in simultaneous timeframe as the smart contract work)
Smart contract security audit and QA (1 month)
The overall time frame for this project is projected to be 2-3 months but all members of this community want to reaffirm that we want to do it right, whenever & if ever the project comes to a decision point to do it right & delay a bit longer versus rush something out the door, we want the project leads to choose to do it right.
OVERALL COST
$200,000 – $300,000
This estimate includes smart contract engineering, full stack engineering, UI/UX design, Project Management, QA, and auditing services by a qualified company to be announced within two weeks of the approval of this AIP.
Also, this project will be completed by a qualified company to be chosen by the ApeCoin DAO Council