ApeCoin DAO has submitted a proposal to stay on Ethereum after all. This proposal has received great support from the community. This proposal is in response to an idea from Yuga Labs to migrate ApeCoin to another blockchain or even launch its own blockchain.
A DAO is a decentralized organization where everyone can contribute if they have the right competencies. Members of a DAO work worldwide and are paid in cryptocurrency based on their contributions.
Leaving Ethereum would be disastrous
The proposal was submitted on May 1 by ApeCoin DAO member ASEC, which states that migrating to another blockchain is an expensive, risky and complex undertaking with many moving parts that, if not carefully considered, can result in catastrophic losses . At worst, creator Yuga Labs is pulling its hands off ApeCoin.
Transaction fees too high on Ethereum
Yuga Labs, the company behind the popular Bored Ape Yacht Club NFT collection and the Otherside Metaverse project, suggested on May 1 (see tweet above) that ApeCoin should migrate to its own blockchain. This was in response to the exorbitant gas prices on Ethereum when they put pieces of their metaverse Otherside up for sale. The company raised $ 310 million on the sale, but buyers together paid more than $ 177 million in transaction fees. In the end, this also led to Ethereum’s network being useless for a short time (read: too expensive) for other users.
Each time a user submits a transaction, he or she must indicate how much transaction cost (gas) he or she is willing to pay. A transaction can be sending ETH, but also a mutation in a smart contract. The gas price only determines how much a user is willing to pay per. gas unit and not how much gas is needed for a transaction to take place. Otherside’s smart contract was not well prepared for this, and it resulted in even higher transaction costs.
Yuga Labs has reimbursed many of the transaction costs out of pocket, but you can imagine they were not happy about this.
Dissatisfaction with Ethereum was immediately noticed by other blockchain projects. For example, Avalanche offered to migrate ApeCoin to a subnet of their own blockchain. This should lead to faster transaction speeds, lower transaction costs and, according to Avalanche itself, a better user experience, which in turn should lead to a higher APE price. Emin Gün Sirer, Founder of Avalanche Labs:
However, the ApeCoin community does not seem interested. The proposal to stay on Ethereum currently has 99.65% of the vote in favor and 0.35% of the vote against.
Migrate to second layer
In particular, the proposal proposes to use an Ethereum Layer 2 as a solution to transaction costs. They would rather use a different layer on Ethereum than migrate to another blockchain. The argument is that it would be detrimental to available liquidity, security and the network effect. It refers to Optimistic Rollups (like Optimism and Arbitrum) or ZK-Rollups (like Starknet or zkSync) as potential new ideas to keep ApeCoin on Ethereum.
One of these so-called second-tier projects on Ethereum is Immutable X. On May 25, she submitted a proposal to the ApeCoin Governance Forum to bring the project to them. Immutable X specializes in scaling NFTs and also appears to have good liquidity. Several blockchain games based on NFTs are already running on Immutable X, such as EmberSword, Gods Unchained and Illuvium. The proposal was enthusiastically received by the community at the ApeCoin Forum.
Another option is to wait for the next major update from Ethereum to Ethereum 2.0. This should drastically reduce transaction costs.