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Kyle Reidhead
Over 25k subscribers
GM DOers! 😎
One of the biggest DAOs in the space – ApeCoin DAO – has voted in favor of using 11 million $APE ($12.1 million) to purchase Yuga Labs NFTs. 😳
The goal? Display the NFTs in museums around the world to hopefully attract new users to the ApeCoin/Yuga Labs ecosystem. 🌊
And get this… They’re creating another token called $DAM to decide how the 11 million $APE will be spent. 🤯
Last Friday, we wrote about how NounsDAO was breaking up… That was big.
This move from ApeCoin DAO is definitely up there as well, and it’s also a very controversial decision. 😨
Today, we’ll tell you all you need to know in 5 minutes because we don’t want to waste your precious time this Friday. 🤩
Let’s go over:
ApeCoin DAO governance ⚙️
The AIP-304 proposal 📝
What’s next? The $DAM token 👀
Key takeaways 🧵
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Before we talk about what this proposal is, let’s get on the same page on how governance works at ApeCoin DAO.
As most other decentralized organizations, ApeCoin has a token called $APE.
By holding $APE, anyone can propose new ideas and vote, regarding how the treasury funds (47% of the total 1 billion $APE) should be distributed. ⚛️
Each $APE holder has a right to vote, with 1 $APE = 1 vote. The more tokens you hold, the greater your voting power. 📥
Similarly, each $APE holder has the right to propose new ideas by following this template.
After submission, the proposal goes through 9 phases, most of which are reviews made by ApeCoin DAO board members to get the proposal properly laid out. ✍️
After all reviews are ready, the proposal is ready for its LIVE AIP – aka the phase when $APE holders can vote for or against the proposal.
Each proposal opens on Thursday at 9PM EST and lasts until Wednesday 9PM EST, which means that $APE holders have almost a week to vote.
If the proposal goes through, it goes to its final – implementation – stage, where the things outlined in the proposal are actioned.
On Wednesday, at 9PM EST, the most controversial proposal – AIP-304 – went through… But what is it?
This proposal was put forward by Machi (machibigbrother), an infamous NFT trader & OG in DeFi that possesses 4+ million $APE, hundreds of BAYC & MAYC, and thousands of other NFTs worth tens of millions of dollars.
Due to his holdings, Machi has a great influence on the wider NFT market.
For instance, one month ago, Machi was holding 300 DeGods. If he sold them, it would massively hurt the DeGods floor price. 😬
Frank (founder of DeGods) even went public, begging for Machi not to dump it all into the ground. 😅
Regardless, Machi’s AIP-304 proposed that ApeCoin DAO would use 11 million $APE to purchase Yuga Labs NFTs like BAYC, MAYC, BAKC, Punks, and other notable NFTs outside the Yuga Labs ecosystem.
The goal of this movement, which he called the ‘Digital Art Movement Collection’ is to display Yuga NFTs in museums, effectively removing them from circulation permanently and solidifying their position in the traditional art world.
This initiative has stirred mixed reactions from the community. Mostly because projects buying their own NFTs to create FOMO is a strategy that clearly failed over the years.
People hate it.
Project founders who talk about sweeping their own floorsTo be clear, this proposal doesn’t intend to buy only Yuga NFTs.
But because many $APE holders are involved in the Yuga Labs ecosystem (and most likely own some NFTs), it’s clear that they have an incentive to use the 11 million $APE to buy the NFTs that they’re part of to drive the floor price up.
Nevertheless, after AIP-304 went through the proper reviews, it was put up for a vote, which ended on Wednesday.
What’s interesting is that with 24 hours before it ended, the vote was extremely close.
However, just before the vote ended, Machi used his whopping 4.1 million $APE to vote yes on his own proposal, which ended up winning… Clearly.
Now, the proposal will enter the implementation stage, where a new token will be created. What? New token?? Yeah… Keep reading. ⏬
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A new governance token called $DAM will be launched. $DAM holders will be able to choose which NFTs will be scooped up with the 11 million $APE.
You'll be able to get $DAM by staking $APE, which is probably designed to counteract the selling pressure of 11,000,000 $APE used to buy the NFTs.
According to the proposal, 50% of all capital will be used in the first year and there is a clause that prevents any buys of NFTs directly from Machi, or NFTs that Machi sold/transferred in the last month.
Now... What do we make of all of this? 🤔
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First of all, I like the proposal. The NFT market will get an injection of $12 million, and NFTs will be displayed all over the world. That’s a win. 💪
However, the way they set this up is very weird. By creating a new governance token – $DAM – ApeCoin DAO is essentially creating another DAO, where Machi has the most power.
I am assuming that he’ll stake all of his $APE. And since nobody else has as much $APE as he does, he’ll also become the biggest owner of $DAM, where he’ll be able to call the shots.
And that leads us to the main issue… Centralization.
While DAOs are supposed to be decentralized, it’s clear that there are a few big players like Machi, JRNY Club, Mocaverse, and The Sandbox that decide everything.
It’s looking like a centralized DAO. 😅
Get this: There are 385 million $APE in circulation right now. And only 24.6 million participated in the voting process of AIP-304, one of their hottest proposals ever.
That’s just a 6.6% voter turnout. Not great.
Most DAOs suffer from this same voter apathy problem. 😢
And there's no easy solution to this problem.
Some things will certainly help, like:
More accessible DAO voting tools (although snapshot is pretty good)
Better communication (wallet-to-wallet messaging)
Reorganizing into smaller divisions (like MakerDAO is planning with Endgame).
We’re excited about DAOs, just like we’re excited about getting more NFTs in museums.
But DAOs still have a long way to go before they achieve their ultimate goal of being completely decentralized and autonomous.
On our journey towards that goal, we’ll be sure to keep you up to speed with the latest developments, as always.
Enjoy your weekend, frens. 🫡💜
Thanks for reading. And remember, you're strong, you’re powerful, you’re alpha! ❤️
See you soon. ✌️
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Disclaimer: This article is for informational purposes only and not financial advice. Conduct your own research and consult a financial advisor before making investment decisions or taking any action based on the content.
3
Bullish for Nft though.