Nouns DAO’s $27M Revolt Reveals Toxic Mix of Money-Hungry Traders and Blockchain Idealists

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Nouns DAO’s $27M Revolt Reveals Toxic Mix of Money-Hungry Traders and Blockchain Idealists
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It wasn't only the $90,000 spent on naming rights for a rare Ecuadorian frog species that turned off members of this decentralized blockchain-powered community project; some savvy arbitrageurs just wanted their share of the project's treasury.

was essentially discarded through a controversial fork away from the original chain, now known as Ethereum Classic.

“If such an attack occurs, everybody else that isn't the attacker can quit. And not only are they leaving with the assets, they’re also making it way less lucrative for the attacker,” Mallel said in the Twitter Spaces. Under the new rules, any Nouns NFT owner can call for a fork in response to a proposal they don’t like. Their call only takes action if 20% of community-held Nouns NFTs join them. Once the forkers clear this 20% threshold, all of Nouns DAO freezes for seven days of no spending, and only debate – stay or go? The leavers then peel off with their share of the assets into a fork DAO that mimics Nouns DAO’s original governance rules, albeit with an important addition: a rage quit.

“Talks of the fork gave more power” to the activist investors, said the pseudonymous Nouns DAO community member TheBower, who writes a newsletter about Nouns DAO governance. He said the activists “started to have a significant” hold on Nouns DAO to the point that conducting a fork became necessary – if only to shake them off.

The single-largest forker, a prolific, pseudonymous crypto trader named Blurr, told CoinDesk they had watched Nouns DAO from “day 1” but only embarked on their 44 Noun acquisition spree in August, “when it was clear they’d have to” let a fork happen. Nouns DAO’s inner core is not dissuaded by the treasury loss. One prominent community member who asked to remain anonymous said the group knew there was a risk actors might play the fork for financial gain. That person said the risk was worth it “to push the envelope” of DAO design.The Nouns community – remainers and forkers alike – is still coming to terms with what led up to the mess and debating whether it was a success.

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