Metaversal is a Bankless newsletter for weekly level-ups on NFTs, virtual worlds, & more!

Dear Bankless Nation,

The Nouns project was launched on August 8th, 2021. 

Two years later, this NFT collective continues to push ahead as one of the most interesting creative experiments on Ethereum! 

Today’s post is a hat tip to Nouns DAO and its second birthday, so let’s catch you up on the group’s new art, new fork tensions, and more. 

-WMP

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Nouns DAO Is Growing Up 🎂

Pulse of the Nouns

What’s the state of Nouns DAO two years in?

Strong in my opinion. 

In Metaversal, I recently outlined an NFT ranking system across 10 criteria, covering everything from a collection’s aesthetic value to the technical quality of its smart contracts. 

I’ve tested the system out on +30 top NFT projects to date, and Nouns remains the highest-scoring project I’ve seen yet. 

At a time when many NFT projects from the 2021 bull run have already faded into obscurity, Nouns DAO continues to grow, create new content and new public resources, fund interesting experiments, and inspire spinoff communities. 

For instance, Prop 348 — a proposal to add new art to Nouns DAO’s smart contract system — just saw 60% voter turnout, a higher participation rate than is seen in virtually any other DAO. Wow!

Part of the high participation rate is from a growing faction of arbitrageurs who are blanket voting against proposals waiting for an upcoming “rage quit” functionality to fork Nouns and take as big a cut of the treasury as they can. I’ll touch more on this below. 

But activity is also high because the project as a whole has thrived to date by attracting in some of the best and brightest in crypto, and the DAO’s hit major strides accordingly and become one of the NFT space’s biggest creative forces to be reckoned with. That’s nothing to sneeze at!

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Continuing the tradition: the latest 8/8 Nouns art update 

The aforementioned Prop 348 recently passed, adding new traits to Nouns DAO’s art generator system including eight new heads: Backpack, Beanie, Beluga, Cotton Candy, Curling Stone, Fax Machine, Satellite, and Tiger. 

“We propose to continue the tradition of adding to the Nouns body of artwork on the project’s anniversary, August 8,” the contributing artists noted in their proposal. “See last year’s art upgrade proposal (125) for reference.”

An honorary Nounish history lesson

There’s a lot to be learned from studying how the Nouns were created. Fortunately for us? We have a great resource to do so, which is the Nouniversary Discord server. 

Set up in honor of Nouns DAO’s second birthday, over the past many weeks this server has played back the initial “Nounder” discussions and collaborations that resulted in the launch of the DAO on August 8th, 2021. It’s a gold mine of info and inspiration, so check it out if you want to study how the project was created from the ground up. 

My recent stint in Nouns

What’s Nouns DAO been voting on lately? I can tell you from firsthand experience because I was there!

Last month, Wilson Cusack delegated Noun 652 to me so I could vote in the DAO for July 2023. My proposed platform? Pro-spending, pro-experimentation, keep things weird, etc. 

You can read about all my vote reasonings here. Some of the props that I voted for that ended up passing included:

• 🐧 Prop 325 — A Pudgy Penguins x Nouns DAO toy collab

• ❤️ Prop 326 — A social impact campaign via Mucho Love

• 🛌 Prop 331 — Approving use of Cozy for stETH peg protection

• 😎 Prop 334 — Expanding global distribution of Lo-Fi Noggles

• 📮 Prop 339 — “Nounify Korea” through a stamps collection campaign

• 📚 Prop 343 — Funding a Nounish public goods CC0 library

• 🎨 Prop 346 — Funding a Drops Creator tool for Nouns DAO

• 🎉 Prop 348 — Approving 8/8 anniversary art additions

If you’re ever keen to vote in Nouns DAO too, there are inexpensive ways to do so. 

For example, via Wilson Cusack’s voter.wtf platform you can vote “For” or “Against” any active proposal before the DAO for free (minus gas) and put your reasonings in writing onchain. Without owning a Noun your vote power will be “0” here, but putting your thinking out there sincerely will notch your spot in the history of the Nouns and can make others see you as someone worthy of delegating a Noun too. 

A different option is owning a Bud Light N3XT NFT, whose floor price is ~0.023 ETH right now. Owners of these NFTs are able to collectively decide via Snapshot how the aptly beer-headed Noun 179 votes in Nouns DAO for any given vote. 

Understanding the Nouns V3 controversy

At the time of writing, Nouns DAO is currently voting on Prop 354, which would update the DAO’s smart contracts to a new V3 system. 

One of the big intrigues here? This proposed V3 upgrade contains a “Nouns Fork” functionality that would “allow Nouners to exit the DAO by forking to a new DAO.” Under this system, 20% of the existing members would need to agree to approve triggering a fork. 

The idea with this system is to “protect a minority from a tyrannical majority” in the DAO by granting the minority a resource via forking. I’ve seen some, like Noun 40, make strong cases for the necessity of this type of recourse. Others have voiced concerns that it can and will be abused by speculators.

Remember the arbitrageurs I mentioned earlier in this post? They’re buying up Nouns and trying to preserve the treasury with “Against” votes, with the plan being to eventually trigger a V3 fork and cash out with more ETH than they originally put in thanks to forking. 

For skeptics, they ask: but what’s to stop arbitrageurs from doing this over and over again? 

Of course, it remains to be seen how the new V3 system will play out, but if you’re interested in DAOs generally, this Nouns forking drama is worth watching closely over the coming months. Personally, I’ll keep supporting efforts to keep Nouns weird and creatively industrious no matter what happens! 

Action steps

• 🧑‍🚀️ Explore Nouns: Check out Nouns Center

• 🏁 Catch up on my previous weekly roundup: NFTs Race to Formula 1

A Bankless Citizen ⚑ turned $264 into $6,077 last year. A 22x ROI 🚀 in a bear market!

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Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.

Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here.