ApeCoin DAO Has Been Chastised For Its Shoddy Governance Structure

ApeCoin’s governance system has been criticized. Because early contributors wield disproportionate power in the DAO, market analyst Cobie went into detail about the difficulties surrounding their influence.

The governance scheme of ApeCoin, a coin related with the Bored Ape Yacht Club NFT series, has been criticized. Market analysts such as Cobie have criticized the board’s structure, claiming that it is unsuitable for resolving certain issues.

Cobie took to Twitter to express his concerns and also published a lengthy post on Substack.

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.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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