ApeCoin is coming under fire for its governance system. Market analyst Cobie detailed issues concerning the influence of early contributors, given they have a disproportionate sway in the
ApeCoin, a token associated with the Bored Ape Yacht Club NFT series, has been receiving criticism for its governance system. Market analysts such as Cobie have been saying that its board member structure, which he said, is not suitable for solving certain issues.
Cobie took to Twitter to express his concerns and also published a lengthy post on Substack.
Anyone know if the ApeCoin board is exclusively “investors” which fall into the “launch contributors” category?
If so, seems weird to have only board members as people with a potentially adversarial motive to the rest of the DAO.
Surprised not to see a community representative. pic.twitter.com/JU4Wkw11my
— Cobie (@cobie) April 22, 2022
On Twitter, Cobie asked if ApeCoin board members were exclusively investors who were launch contributors, noting that if so, it would be “weird to have only board members as people with a potentially adversarial motive to the rest of the DAO.”
140 million ApeCoins have been allocated towards launch contributors, and Cobie points out that some of these members would have over 33% of the allocation unlocked during the staking launch. This gives them a considerable amount of influence in the staking program.
He goes on to suggest there may be potential adversarial incentives and that board members properly disclose interest amounts when suggesting proposals. Obviously, the concern here is that proposals could be made out in favor of these board members.
Cobie’s concerns are valid, and in his blog post, he talks about the term staking has been repurposed and redefined. He says,
“Instead of receiving rewards for contributing to chain security with collateral at stake, modern ‘staking’ just seems to mean idk we give you more coins as a reward if you don’t sell your current coins lol.”
The ApeCoin divide
ApeCoin has been subject to a lot of ridicule in the past few months. The token has been at the center of headlines for several reasons, from Ja Rule saying that the token would hit $3,000 to previous discussions of centralization.
Analysts believed that the tokenomics of the project could leave room for venture capitalists to dominate. These discussions have been happening since the ApeCoin DAO began airdropping tokens on March 17. Other worrying incidents include the compromise of the Bored Ape Yacht Club Discord.
Still, the token continues to receive a lot of attention. Whether it is a bubble waiting to burst remains to be seen, but investors seem keen on the asset.
