Nouns Fork: NFT Holders “Ragequit” With $27 Million, A Cautionary Tale for DAO Communities

Following an attempt to exit the group by disgruntled members, NounsDAO was split in two last Friday. More than 50% of Nouns NFT holders opted to leave the DAO, collectively receiving over $27 million worth of ETH from the project’s treasury.

As reported by Masternode Buzz, the rage quit process began on September 8 and lasted until September 15. Out of the 846 minted Nouns, 472 holders went along with the fork and left the group with almost 16,757 ETH (around $27.3 million). Each NFT was valued at approximately 35.5 ETH per NFT, or about $57,850.

Owners who participated in the fork will have to relinquish their original NFTs to the DAO while taking a share of the treasury. However, they will be issued a replacement NFT with identical artwork for the new DAO.

The recent rage quit of a group of Nouns DAO NFT holders is a cautionary tale for the NFT space. It shows that even the most successful NFT projects are not immune to internal conflict and that DAO governance models can be fragile.

NounsDAO made a name for itself at the peak of the NFT season, spending millions of dollars on Nouns-themed projects to proliferate the brand. From a parade float in the 2023 Rose Parade to 3D-printed apparel, vinyl toys, a comic book series, and even a 2022 Super Bowl commercial, the value of the once-popular project has fallen sharply since late 2021. As of press time, the lowest-priced Nouns NFT was priced at around $60,000. Comparatively, the floor price of the collection was nearly $270,000 in December 2021.

Commenting on the fork, one Nouns co-founder known as Seneca, encouraged the remaining members to prioritize efforts that will attract builders and creative projects. Seneca wrote:

One of the lessons from the fork is that in the game of Nouns, if you don’t use the treasury, it will inevitably get captured […] It is a part of the game that has now been made explicit.