ApeCoin DAO under fire for leadership salary payouts

ApeCoin DAO — the Web3 organizational entity built around ApeCoin, a cryptocurrency token founded in spring 2022 as part of the Bored Ape Yacht Club ecosystem – has come under fire for paying exorbitant salaries to its board of directors and being out of touch with its own community.

On June 10, the secretary of ApeCoin DAO, a person who goes by the pseudonym Vulkan, posted an organizational chart on Twitter detailing DAO Board of Directors salaries. Some positions, such as the DAO’s facilitators who moderate the group’s forum space, have been criticized for being particularly blatant in their relationship between role and reward.

In answer, a number of Web3 observers took to Twitter to express their frustration with the organization’s administration. “How do I apply to work at ApeCoin? $8K a month in mods is insanely out of reach,” Satvik Sethi said of the org chart, an artist and former head of Mastercard’s Web3 arm. “They are disconnected from reality”, wrote another observer.

Navigating Decentralization

ApeCoin was announced in March 2022 by ApeCoin DAO as a crypto token created to “expand culture, gaming and commerce” in the BAYC universe. Despite their thematic similarities and close relationship in the Web3 ecosystem, both ApeCoin and ApeCoin DAO are technically independent from Yuga Labs, the company behind the BAYC. This thin but clear legal separation is designed to avoid complications with the U.S. Securities and Exchange Commission, which has been known to go after companies it believes are offering unregistered securities.

DAOs (Decentralized Autonomous Organizations) are Web3 governing entities intended to democratize and spread leadership among their community base. Members of ApeCoin DAO (ApeCoin token holders) have the opportunity to vote on proposals that utilize the Ecosystem Fund, the community’s treasury. For example, the DAO’s Discourse Facilitation Team, just one of the aspects of the org chart currently under criticism, was created after proposal AIP-240 was approved by the community in April this year.

Navigating DAO decentralization

In addition to the governing council, ApeCoin DAO receives support from the Ape Foundation, which consists of an administrator and a special council who access the treasury via a multi-sig wallet and are intended to financially support DAO projects and initiatives. community vote to succeed.

When the DAO was formed, the Special Council consisted of Alexis Ohanian (Co-Founder of Reddit, General Partner and Founder of Seven Seven Six), Amy Wu (Former Head of Ventures and Gaming at FTX), Maaria Bajwa (Director at Sound Ventures) , Yat Siu (Co-Founder and Executive Chairman of Animoca Brands), and Dean Steinbeck (President and General Counsel at Horizen Labs) and served six-month terms.

In November 2022, three of the councilors – Steinbeck, Bajwa and Wu – have left their positions in the DAO, which initiates a process to find new candidates. On January 1, 2023, following a community vote to select new leadership, ApeCoin DAO members BoredApe G, Vera and Gerry began their tenure on the Board, each receiving a monthly salary of $20,833 (in ApeCoin) under the terms of AIP-1.

In response to the criticism of these payouts, Siu described the thought process behind the salaries on social media and claimed that the salaries match with what a mid-cap public company operating in the Web3 sphere would have to pay its administration.

1/ @apecoin $ape the compensation was designed to be consistent with the responsibility and accountability of the position and the best example we found at the time was that of directors of public companies. A thread on the initial pay structure approach 🧵👇 https://t.co/nFpCkBqwbH

— Yat Siu (@ysiu) June 11, 2023

“Comparing the salary of an average worker to the role of serving a billion dollars #DAO like it @apecoin$monkey seems a bit unfair imho,” Siu continued. “As the famous idiom goes; you get what you pay for and there is a reason why companies and organizations often pay for what they do.”

Likewise, Special Councilor Bored Ape G went to Twitter to give context to the numbers being discussed online. Bored Ape G reminded the community that the DAO’s administration was previously overseen by the Cartan Group, an organization the DAO had outsourced for a fee of $150,000 per month.

Late last year, the Cartan Group submitted a proposal to renew its administrative leadership, something that would have increased its fees to $300,000 per month and further centralized control of the DAO. The community voted against the proposal and drafted a contingency plan in the absence of Cartan Group, which eventually evolved into AIP-196. This proposal established a process for a new administration (in addition to the special council working under the latter’s oversight) and “stewards” who would work alongside the DAO’s board of directors.

That process resulted in Webslinger being elected as the new administrator, with the group receiving compensation of $75,000 per month, a significant cost reduction compared to the previous administrators.

The Request for Proposal (RFP) process led to the selection by the DAO of Webslinger as the new administrator at 50% of the cost of the previous administrator

The purpose of this was, in part, to further decentralize certain work to the ApeCoin community!https://t.co/UeklAzUiSD

— Bored Ape G (🔮,🥃,🦉) (@BoredApeG) June 12, 2023

A healthy Web3 discussion

Another member of the special council expressed his opinion on the matter, with Vera posting on Twitter that a key area of ​​focus should be whether or not individuals in the role generate substantial value to the DAO and its community. Other members of the Web3 community have noted that the controversy surrounding salaries and roles in the DAO is exactly what a healthy debate about decentralization should look like.

Great discussion. If @ysiu said in his thread that this is really decentralization then let the people decide if SC should be paid that much. Is a good benchmark to compare against web2 listed companies, but their salary is determined by a small group of people

— soltsla.ethᴹᴷ (@SOLtsla) June 12, 2023

How the concept of decentralization manifests itself in reality has been the subject of a lengthy debate in Web3. Often a passionate belief of Web3 diehards, a gold standard of operations related to decentralization or DAOs themselves, has yet to emerge in the nascent industry.

Editor’s Note: An earlier version of this article referred to WebSlinger as an individual, it has since been updated.