Apecoin Community Votes to Remain in the Ethereum Ecosystem
To address scaling issues during the minting of land on the Otherside Metaverse, the ApeCoin DAO has voted to stay on the Ethernet network – and may focus on Layer 2 solutions.
The ApeCoin DAO has just concluded voting on a proposal suggesting that ApeCoin stays in the Ethereum ecosystem. And despite an unexpected pushback from a handful of Ape token whales, the result shows that more community members favored this proposal as ApeCoin is poised to remain in the Ethereum landscape, at least for the time being.
The proposal, dubbed ApeCoin Improvement Proposal (AIP) 41: Keep ApeCoin within the Ethereum ecosystem, went live for voting on June 3 after it was first pitched as an AIP idea on May 2 by a DAO member named ASEC, he said that the vote shows Yuga Labs that the community against the idea to migrate to another chain and that It will help to block proposals such as the Avalanche one.
By the time voting ended on June 9, 53.62% of the votes were in favor of remaining in the Ethereum ecosystem, while the remaining 46.38% challenged the proposal.
Judging by the outcome of this exercise, it is safe to say that the ApeCoin DAO, and maybe Yuga Labs, will be focusing more on scalability solutions within the Ethereum network. More specifically, it is more likely that the ApeCoin community might opt for one of several layer-2 solutions available to Ethereum-based dapps.
AIP-41 was proposed following statements by Yuga Labs suggesting that a move away from Ethereum might prevent future scaling woes like the one recorded during the launch of Otherside’s digital plots of lands. As explained in the proposal idea published on May 2, the goal of this proposal is to block a move off the Ethereum network. The proposal reads:
“Yuga Labs stated in a tweet 54 that they believed ApeCoin needed to move to its own chain in order to scale. We the ApeCoin DAO believe that, at least for the time being, ApeCoin should remain within the Ethereum ecosystem, and not migrate elsewhere to an L1 chain or sidechain not secured by Ethereum.”
While explaining the motivation for requesting that ApeCoin stays on Ethereum, the author explained that migrating to alternative layer 1 chains “is a costly, risky, and complex endeavor with many moving parts that may, if not thoughtfully considered, result in catastrophic loss, or at worst, abandonment by Yuga Labs and other entities that would otherwise meaningfully to ApeCoin.”
Notably, the proposal sparked positive reactions from ApeCoin DAO members, with many noting that ApeCoin would be better off opting for an Ethereum layer 2 solution. “I think they should look instead in arbitrum, optimism, zksync or immutable, use them as they are or fork those and build there,” said one commentator. “Moving away from Ethereum is really the worst decision they can make, and I’ll need to think hard if I want to stick around if that happens.”
Matt Galligan, the co-founder of XMTP Labs, a messaging app protocol, also commented on the absurdity of migrating away from Ethereum. He wrote:
“1,000% agree. $APE is already deployed to Ethereum…as are the BAYC, MAYC, BAKC, and Otherside NFTs. Moving to an alternative L1 would segment the community and make many things harder moving forward.”
Galligan, who later co-authored a reviewed version of the proposal, added that the community should focus on capitalizing on viable L2 solutions:
“I for sure recognize the motivation behind finding a path towards scalability and cost reduction for transactions, but neither of those things require a brand new L1 to be spun up, which would add an obscene amount of complexity to the mix. There are many viable L2’s currently, and more to come later. So all of the work should be focused on making that work vs. inventing a new app-specific L1.”
Perhaps, the most critical talking point is how this pitch impacts another proposal idea, titled Otherside as an Avalanche Subnet, submitted by Ava Labs on May 24. In this AIP, Ava Labs argued that Avalanche as a layer 1 solution is more suitable for launching Yuga Labs’ APE-powered metaverse, Otherside. The proposal reads:
“We propose that ApeCoin DAO launches Otherside on an Avalanche Subnet to support Otherside’s future community growth through rapid transaction processing, higher throughput, greater ability to scale and lower gas fees.”
In particular, Ava Labs proposed an ApeCoin subnet, where the community can enjoy a dedicated blockchain and use Ape tokens to pay gas fees. As such, the result of AIP-41 ensures that proposals like that of Ava Labs would most likely hit a brick wall.
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ApeCoin Whales Almost Successfully Challenged Proposal AIP-41
It is worth mentioning that voting on ApeCoin DAO requires voters to hold APE, as each token represents a vote. In other words, members with large APE holdings tend to influence the governing process such that a handful of members can impose their views on the broader community. A similar scenario almost played out during the voting process of AIP-41, further highlighting the impact of whales in the decision-making process of ApeCoin DAO.
Shortly after voting started, the proposal seemed to have garnered massive support from participants, with 99.9% of votes in favor of staying on Ethereum. However, three days into the voting, a handful of whales began to challenge the proposal.
More specifically, of the 3.3 million votes against the proposal, more than 60% came from just three APE holders. The first holder was also the member with the most votes, submitting 1.2 million APE, while the other two holders submitted 403,000 APE and 256,000 APE, respectively. Due to the contributions of these whales, the vote against the proposal quickly rose from 9% to 48%.