In a remarkable turn of events, 44% of Nouns NFT holders have voted to leave the collection’s decentralized autonomous organization (DAO). If that number holds, the premiere DAO in the NFT space will see its treasury split, with the forked Nouns collection receiving 13,256 ETH or $21 million of the $50 million total in the treasury.
So far, 373 Nouns are in the fork out of the 845 in existence. That well surpasses the 20% number of Nouns needed for the fork to succeed, as per the original proposal. If the fork goes through — which seems nearly inevitable at this point — the DAO that has funded over 150 projects will face its most severe crisis yet.
According to the proposal, any holder of a Noun that is forked can receive a refund of around 35 ETH, which amounts to $56,000. It is possible that many of the forked Nouns were bought when the floor price crashed to 20 ETH, representing a significant profit margin for those holders.
The fork is also a sign of the times — 44% of holders want to cash out through the treasury rather than try to sell on the open market, which has seen low trading volume in the bear.
Fork Divides Nouns Community, Puts DAOs in Spotlight
According to various reports, the fork has caused a split between the Nouns community. Some have criticized those looking to cash out, saying it’s all about greed and not about interest in the long-term health of the brand.
Others say the fork is good and a necessary step to protect minority holders who may not be able to influence the approval or rejection of DAO proposals in a significant manner.
~40% of Nouns are quitting the DAO and claiming a refund
Noun #1 sold for 613 ETH in August ’21 ($1.9M at the time)
Now Nouns are only going for around 35 ETH ($40k)
Some holders think the $30M treasury is being thrown out the window
Here’s what’s causing problems:… pic.twitter.com/jPsPE9ycLV
— Hunter Solaire ᵍᵐ (@huntersolaire_) September 11, 2023
The move has also brought attention to decentralized autonomous organizations and whether they can survive in the long-term. NounsDAO has been one of the top DAOs, especially in the NFT space. A rupture of this kind could do lasting damage, and it speaks to the problems that occur when prices collapse and people want to exit the organization.
Finally, many see this event as a form of ‘rage quitting.’ Typically, this happens when people are losing on their investments and want to move on. One interesting aspect to look at is whether the refunding of these Nouns will add more liquidity back to the market, or whether holders will simple cash out and leave the space.
Some Nouns Proposals We Have Covered
Although many Nouns holders appear fed up with the project and want to exit, the DAO has done more than most in the NFT space, and the stories show it. Here are four about the NounsDAO and the proposals it has successfully executed on.
First, sixth months ago, the DAO approved a proposal for a full-length NFT feature film. According to the proposal, the DAO will task Atrium, a network of Web3 artists, with the creation of a series featuring Nouns characters.
Next, seven months ago, NounsDAO partnered with Titan Comics to create a new comic book series called “Nouns: Nountown.” The goal behind the partnership was inspire Nouns holders to take advantage of their creative IP rights and help the organization become the largest open-source brand.
Third, nine months ago, Nouns NFTs were set to appear in the Rose Bowl parade in a “Meet the Nouns” float. According to the proposal, the float will be 65-feet long, covered in flowers, and feature Nouns that have a variety of traits.
Finally, two years ago, Bud Light agreed to use the Nouns glasses in a Super Bowl commercial. The agreement came because of communication between the beer brand and the NFT project, with the DAO gifting Bud Light a Noun NFT and the company featuring the iconic glasses on the highest stage of advertising.
There’s no word yet on how the proposals that have not come to fruition will play out given the circumstances, but there’s no doubt the NounsDAO has been busy. Time will tell what will happen with this decentralized autonomous organization. Rarity Sniper will keep an eye on the story and report back if needed.