0x01 ApeCoin staking
ategory: Core — Ecosystem Fund Allocation
Author: Animoca
0x02 ABSTRACT
This proposal presents the total ApeCoin allocation for the staking pools (AIP-4) and the three-year duration of this initial staking period.
0x03 MOTIVATION
The creation of a staking process for ApeCoin as outlined in AIP-4 is designed to work with varied ApeCoin incentive pools and period lengths. AIP-5 presents the initial staking pool and staking duration.
0x04 RATIONALE
As stated in AIP-4, in order for ApeCoin to become the preferred token of web3, early NFT adopters and existing and potential ecosystem participants should be incentivized through participation in activities benefitting the APE Ecosystem.
The initial ApeCoin staking period and staking pool size proposed here is designed to incentivize participation in the ecosystem over the staking period, regardless of whether a participant stakes ApeCoin alone, or modifies that stake by committing BAYC ecosystem NFTs.
0x05 KEY TERMS
- Staking Pools: The total ApeCoin pools that participants can earn from.
- Staking Pool Type: The pool specifically assigned to a digital asset class; there are four in total.
- Staking Period: Each period is 12 months.
- Staking Pool Allocations: The total amount of ApeCoin allocated to each Staking Pool Type per period.
- Total Staking Period: A total of three (3) years.
- Initial Staking Period: The first 12-month period of staking.
- Pool Distribution: The spread of the staking allocation assigned across the period.
- Incentive Distribution Curve: The schedule of ApeCoin allocated for incentives per quarter.
0x06 SPECIFICATIONS
- Total ApeCoin Staking Pool: 17.5% of the total ApeCoin supply to be distributed over the Total Staking Period of three (3) years. This will be funded by the Ecosystem Fund.
- Staking Pool Periods:
- Year One: 100,000,000 ApeCoin tokens (10.0% of the total ApeCoin supply)
- Year Two: 50,000,000 ApeCoin tokens (5.0% of the total ApeCoin supply)
- Year Three: 25,000,000 ApeCoin tokens (2.5% of the total ApeCoin supply)
Note: Unclaimed ApeCoin remains in the contract indefinitely until it is claimed. It cannot be recalled by the contract owner.
- Staking Pool Types:
- ApeCoin Staking Pool
- BAYC Staking Pool
- MAYC Staking Pool
- BAKC Staking Pool
- Staking Pool Allocations:
- Initial Staking Period:
- ApeCoin Staking Pool: 30,000,000 ApeCoin Tokens
- BAYC Staking Pool: 47,105,000 ApeCoin Tokens
- MAYC Staking Pool: 19,060,000 ApeCoin Tokens
- BAKC Staking Pool: 3,835,000 ApeCoin Tokens
Note: The combined Staking Pool Allocations for the Initial Staking Period adds up to 100,000,000 ApeCoin tokens, or 10% of total ApeCoin Supply. - The Staking Pool Allocations for Staking Periods following the Initial Staking Period will be determined by the market prices of the BAYC, MAYC, and BAKC NFTs. An average price during Q4 of the previous Staking Period will determine the ratio allocated to each of the Staking Pool types. The ApeCoin Staking Pool will remain constant at 30%
Note: The BAKC Staking pool can only be utilized if a BAKC NFT is being paired 1:1 with a BAYC or MAYC NFT.
Incentive Distribution Curve:
Period refers to the time following the launch of the staking mechanism.
Note: The Pool Distribution is designed to incentivize early adopters for staking into the system at the earliest point.
STEPS TO IMPLEMENT
Upon deployment of the AIP-4 Staking smart contract on Ethereum, the total allocation of ApeCoin for this initiative will be sent to this smart contract.
TIMELINE
Upon completion and deployment of AIP-4
OVERALL COST
As the development of the staking contract is complete prior to AIP-5 becoming active, the deployment of the ApeCoin isn’t an additional cost. This is presenting the pool to be utilized only.
now we know the logic of the staking of Apecoin.
Staking mechanisms should be designed to support the goals of the ecosystem. They should be used to incentivise the parts of a product, community or network that requires people to do work or to take risk.
ApeCoin DAO has 7 billion dollars in it’s treasury. It should use it to incentivise people to take risks, do work, and grow the community — rather than giving it away to existing holders as an interest rate bribe for not selling.
Without utility or value capture, spending 37% of the treasury on staking emissions is not only worthless but could actually be actively harmful to the APE ecosystem’s long-term prospects.
We should’ve protested the repurposing of the term “staking” from being a reward for work in a consensus mechanism, with risk of losing collateral, into this current “idk just lock it off market to receive more coins risk-free lol” but it’s probably too late for that now. I imagine the Gensler-police are very pleased that the conflation has occurred, since the term is now inherently misleading and can mean several different things.
I really hope we don’t live in a world where the primary currency of the internet is called “ApeCoin” but I hope that I managed to keep that glaring bias out of this article and that this is relevant for any DAO finding itself in a similar position: lots of capital, good distribution and the opportunity to land-grab utility.
Section dedicated to me ranting about this staking proposal’s poor quality lmao
The Bored Ape community is famous in crypto for continually failing at secure self-custody.
In response, the ApeCoin board has suggested this that BAYC NFTs will actually ‘contain’ your APE tokens.
How Staking Works for NFT Holders
If a BAYC ecosystem NFT holder wants to stake in pool 2, 3, or 4 (depending on the NFT), they will pair the NFT with their ApeCoin to access the relevant staking pool. The NFT itself isn’t staked — it acts as the key to the “vault” holding the staked ApeCoin. The NFT holder retains the ability to sell the NFT. By default, if you sell an NFT that is actively staking ApeCoin, you are also selling the key to access the associated staked ApeCoin.
To sell the NFT only, without the associated staked ApeCoin, the NFT seller would unstake the ApeCoin prior to listing the NFT.
This means, if you lose your BAYC, you lose your APE too!
You cannot spread your NFT and your APE coins into different wallets. It means if someone steals your BAYC, they don’t have to do anything extra to take your APE. The APE goes with the BAYC by default! Great!
It seems intentionally convoluted, and incurs more bad outcomes than good ones. Even forgetting that you had staked APE behind a particular NFT could be a huge financial error. Really bad design.
The ApeCoin board has also issued this statement:
Why can’t I just stake a BAYC ecosystem NFT?
We believe that everyone in web3 should have control of their assets. In order to provide NFT owners this right, the NFTs themselves will not be staked into the staking pools. Furthermore, by staking ApeCoin rather than the NFTs, the ApeCoin DAO incentivizes and fosters the long-term growth of the ApeCoin holder community.
This seems like straight-up double-speak. Everyone should control their assets, so you can’t put this asset into the contract. But you can put these other assets into the contract!
It actually makes so little sense that I can only conclude it’s treating users as dumb.
The market cap of APE is larger than BAYC, so it’s likely that more assets would be in the contract if it is APE-only staking than if it were BAYC-only staking!
Anyway, what happens after three years of staking?
What happens at the end of the three-year period of staking?
A new AIP will need to be drafted and voted on to determine the future staking mechanism, putting this decision in the hands of the community. Ideally, by the end of the total staking period of 3 years, the DAO will have sustained revenue to keep incentivizing staking and rewarding ecosystem participants.
“Ideally”??? Surely it would be preferable to establish the revenue plans prior to the staking program, then? What if a credible plan for comparable revenue takes 5 years instead of 3? Designing a staking program without understanding a product and revenue plan that it is subsidising in the first place also seems pretty wild.
Not that it matters much anyway, because staking in this scenario doesn’t do anything, it is just a bribe to remain a community member.
Oh also the current staking proposal includes $1.3bn of emissions in the next year (at current prices). This alone would create $700m of sell pressure from new tax obligations alone, assuming all holders were in a reasonably ‘western’ high-tax regime. Pretty cool.
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