Hundreds of NFT holders of NounsDAO are rallying to exit the decentralized autonomous organization (DAO), spelling chaos and a possible treasury split in the once popular NFT project.
Founded in August 2021, NounsDAO describes itself as “an experimental attempt to improve the formation of on-chain avatar communities.” The Web3 community was inspired by a tweet from an anonymous founding member known as Punk 4156. Shortly after, the project took off with a group of ten Nounders, aka co-founders.
Unlike other NFT collections that have a cap on the number of digital collectibles, one Nouns NFT will be auctioned every 24 hours forever or until the project grinds to a halt. As of September 11, 2023, the Nouns 843 was being auctioned. And although the DAO’s treasury climbed to over $110 million in April 2022, it has crashed to $13.8 million along with the broader crypto market.
Speaking of treasury, the funds exist for Nouns NFT holders to “allocate resources for the long-term growth and prosperity of the Nouns project” through governance. To date, the treasury has funded mover 150 proposals, including one to feature Nouns in a Super Bowl commercial.
The rally to exit NounsDAO began on September 8, when a group of holders called for a “rage quit.” This would allow them to withdraw their share of the treasury and leave the DAO. As of September 12, over 340 Nouns holders had signed the rage quit petition. If enough holders join the petition, it could trigger a treasury split, where the DAO’s assets are divided between those who want to stay and those who want to leave.
According to the group’s “rage quit” rules, the fork will be executed if 20% of Nouns NFTs unite in their demand. This will give them the freedom to break away from the collective and claim their rightful stake in the project.
The reasons for the rally to exit NounsDAO are unclear. Some holders may be unhappy with the way the DAO is being run, while others may simply be looking to cash out their profits. However, a Twitter user that goes by the name “Hunter Solaire” opined that the clash may be a result of factors such as conflict in the outcome of proposals and a decline in the price of Nouns NFTs.
The treasury split would be a major setback for NounsDAO. It would damage the DAO’s reputation and make it more difficult to attract new members. It could also lead to the collapse of the DAO altogether.
It remains to be seen whether the rage quit petition will be successful. If it is, it will be a major test of the DAO model and its ability to manage conflict.
In the meantime, the NounsDAO community is divided. Some holders are supporting the rage quit, while others are urging the DAO to find a way to resolve the issue.