The NFT community built on Ethereum has experienced a significant fracture as a proposed fork from the Nouns project was completed. More than half of all NFT holders in the collection decided to leave, collectively withdrawing over $27 million worth of Ethereum from the project treasury.
A DAO, or decentralized autonomous organization, is an online group with tokenized membership and shared goals. In this case, the owners of 472 Nouns NFTs opted to join the fork and took almost 16,757 ETH with them to form a new DAO organization. Each holder will be issued a replacement NFT with identical artwork for the new DAO, and they have the option to “ragequit” and take their share of the treasury, approximately 35.5 ETH per NFT.
The fork signals a lack of confidence in the current Nouns DAO format, which has seen millions of dollars spent on various Nouns-themed projects since its debut. These projects include a parade float in the 2023 Rose Parade, vinyl toys, 3D-printed apparel, a comic book series, and an esports team. Despite the investment, the market value for Nouns has fallen sharply. The price floor for the cheapest NFT listed for sale has plummeted from a peak of $267,000 worth of ETH in December 2021 to around $57,740 today.
The fork was made possible by a Nouns protocol upgrade earlier this year, which allows NFT holders to propose a fork and collectively reclaim a share of the treasury. Even after the fork, the Nouns DAO still has 13,310 ETH remaining, and remaining NFT holders will continue to vote on proposals and allocate funding.
While some members are eager to cash out amid the bear market and diminishing market value, others believe in the potential of the Nouns brand and plan to increase spending to fuel builders and creative projects. One of the lessons from the fork is that if the treasury is not utilized, it can be captured by external factors. The Nouns community is now focused on distributing forked Nouns to encourage participation and growth.
In conclusion, the completion of the proposed fork from the Nouns project has led to a significant rift in the NFT community. The departure of more than half of the NFT holders, along with the withdrawal of millions of dollars worth of ETH, highlights a lack of confidence in the current format and a desire to recover returns. However, the remaining Nouns DAO is committed to furthering the brand and supporting creative projects, in the hopes of revitalizing the market value of Nouns NFTs.
