Governance Proposal #27 Discussion
What do you want to change?
With the passage of Governance Proposal 21 on August 19th, 2022, the ApeSwap DAO approved changes to the allocation of DEX fee revenue. Since that date, 50% of trading fee revenue from the ApeSwap DEX has been earmarked for usage “to give back to ApeSwap token holders in a mechanic that is voted on by the ApeSwap community”. The total amount of these funds accrued from 10/1/2022 to 4/30/2023 is denominated in a variety of tokens valued at approximately $179,640 USD in total, at current prices. The wallet that holds these funds can be found here:
BNB Chain: https://bscscan.com/address/0xb7DC80F7CBa6165D5350254a623eE2432B6f220A
Polygon: https://polygonscan.com/address/0x62c99d8bf46a2cB50920Ff288cB618A4E820a960
Polygon: https://polygonscan.com/address/0x62c99d8bf46a2cB50920Ff288cB618A4E820a960
Below are the shares of DEX trading fees by chain that have been withheld since Governance Proposal 21:
- BNB - 50%
- Polygon - 50%
- Telos - 0%*
- Arbitrum - 0%
- Ethereum - 0%
*Note: ApeSwap is not currently incentivizing Telos DEX trading fees.
ApeSwap core contributors are proposing to close the loop left open by the cessation of buyback and burns. They seek to establish a mechanic to redistribute the DEX trading fee revenue that has been accruing since the passage of Governance Proposal 21.
How do you want to change it?
ApeSwap core contributors are proposing that the DAO leverage current buyback funds for “real yield” GNANA Staking Pools.
“Real yield” involves generating and distributing rewards that are directly tied to a protocol’s revenue (in this case, trading fee revenue generated by the ApeSwap DEX). For a more in depth primer, please review this Binance Academy article on real yield.
As can be seen in the revenue wallets above, the fees have been settled into BANANA, native assets (such as BNB and MATIC) along with stable coins. ApeSwap is recommending that the real yield pools are created with assets held worth over $10k to avoid unneeded operational overhead. Assets under $10k will be settled into higher value assets.
Since GNANA is not cross-chain, these real yield GNANA Staking Pools will be available on BNB Chain. DEX trading fee revenue on other chains will need to be bridged to BNB Chain for use in GNANA real yield Staking Pools.
Why do you want to change it?
Withholding 50% of DEX trading fee revenue indefinitely is not an option, as the intent of Governance Proposal 21 was always to establish a mechanism that aligned incentives between the DAO and users of the ApeSwap DEX. ApeSwap’s core contributors have analyzed a number of available real yield mechanics and are proposing Real yield GNANA Staking Pools as an immediate, easy-to-use solution that will get rewards out of protocol-owned DEX trading fee revenue wallets and make them available to those most committed ApeSwap users - those that stake GNANA.
Core contributors have suggested GNANA pools for three main reasons. First, GNANA naturally rewards long term supporters of the DAO and BANANA token. Second, GNANA provides the greatest tokenomic value for the ApeSwap ecosystem via BANANA burns & reflect fees. Finally, the community has been widely vocal about increasing GNANA utility. While it's impossible to know for sure, as the blockchain is anonymous, unverified estimates suggest that the 30+ core contributors to ApeSwap own less than 10% of the circulating supply of 17.3M GNANA tokens.
The majority of the core contributors have decided that the opportunity cost of losing development resources that are required for Bonds was too great to pursue xGNANA this trimester. xGNANA is still a key part of ApeSwap’s 2023 annual objectives, however, user trading fees need to be dispersed to holders in the meantime. This proposal aims to bridge that gap indefinitely.
What type of feedback and/or interaction are you seeking from the community and the governance forum prior to presenting a full proposal?
GNANA Staking Pool rewards can be structured in many ways, and ApeSwap’s core contributors are open to feedback on the types of reward in which the community might be interested.
Examples of rewards that could be offered via real yield GNANA Staking Pools include:
- Exact rewards from the trading pairs (above 10k)
- Half stablecoins, half BNB
- All BTC
- Buyback BANANA, and reward BANANA
Note that there are a limited number of tokens available for distribution after DEX fee settlement. If the approach to real yield GNANA Staking Pools changes, ApeSwap may have to swap some of these tokens for others, or wait until they are fully distributed to make changes to the pools.
Members of the ApeSwap DAO are encouraged to suggest what they believe to be the best usage of this trading fee revenue as rewards in the discussion thread here.