Nouns split in half after governance maneuvers

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Nouns split in half after governance maneuvers

The NFT project Nouns, a highly influential and well-funded NFT project, has been cleaving in half, with many large sponsors opting to leave the project entirely after a series of governance maneuvers.

First came a fork, which was completed on Friday - 472 Nouns, NFTs that grant membership to NounsDAO, voted to split off and create a new decentralized organization with a pro-rata share of the project's nearly $50M treasury.

Over the last three days, more than 60% of the defectors redeemed their NFTs for nearly $50,000 worth of assets per token. It left the new fork with just over $14 million in total, leaving it with nearly $11 million in assets.

It also holds the original Nouns NFTs. holders who chose to leave were required to leave the tokens in the treasury in exchange for a new Nouns token. NounsDAO does not offer a 'rage quit' option like the new DAO.

But at the end of the day, however, it could be considered a favorable outcome for most stakeholders, Maria Shen, general partner at venture firm Electric Capital, said in a statement.

s being held as a hostage. The investor said the fork functionality makes it so those who chose to stick around the original DAO are likely to be more aligned in terms of the organization's direction.

It's also notable that the majority of members chose to stick with the original DAO, with the fork being pushed forward by a few large Nouns holders. In all, only five people redeemed 152 Nouns, representing over half the defections.

Toady Hawk, another Noun who chose to stay with the original DAO, said he was optimistic about the organization's post-fork direction. 's a great opportunity for the DAO', they said on friend.tech.

In 2021, Nouns launched with distinct mechanics, instead of a drop of 10,000 tokens as was typical at the time, a Noun would become available for bidding each day. The ETH from the winning bid would go into the NounsDAO treasury, and the auction winner would gain voting rights over that treasury.

Nouns treasury has been one of the most active in crypto, with NounsDAO funding 158 initiatives. Among them are episodic movies, analytics dashboards, and augmented reality filters.

0xhindsight.eth, who joined the fork with Noun 501, said that many of the most engaged members of the DAO are leaving thanks to the organization's lack of direction.

Some other forkers were more succinct.

The Nouns fork is different from blockchain forks like Bitcoin Cash and Ethereum Classic, in that users had to make a choice - when Bitcoin forked into Bitcoin Cash users got to keep both BTC and BCH - with the Nouns fork, users can only choose one side.

To initiate a fork, support must consist of at least 20 percent of Nouns.

Forking is different from 'rage quit' in crypto, which generally refers to someone leaving an organization with a pro-rata share of the treasury.

Shen said that by directly removing assets from the treasury, rage quitters hurt the organization they're leaving from. Rage quitting also means a person does not need to find a buyer for their assets, as the treasury is programmed to accept redemptions.

While both DAOs are grappling with reduced treasuries, one important takeaway from the fork is that Nouns' relatively simple mechanics have given rise to a complex system.

Uniswap has attracted a myriad of projects and strategies built on top of its decentralized exchange, which serves as a building block for other projects.

The Nouns fork may be another example of the expanding functionality of the Nouns ecosystem.

Shen said there's a distinct difference between the two DAOs.