The Nouns NFT collective on Ethereum behind the open-source by financing creative projects collapses following a vastly supported fork.
Late Friday, the NFT holders community in Nouns, a famous Ethereum collection, split following the completion of a proposed fork. Holders of over 50% of all Nouns nonfungible tokens (NFTs) chose to exit, and, in the process, they collectively took ETH worth more than $27M from the project’s treasury.
Nouns NFT Going Concern Doubtful Following Sudden Exit
Holders of 472 overall Nouns NFT, of the cumulative 846 or nearly 56% of the collection, joined the fork and seized nearly 16757 ETH (whose present value is$27.3M) with them from the present Nouns DAO Treasury to another DAO firm.
A decentralized autonomous organization (DAO) is an online group comprising tokenized membership and mutual objectives. Finally, Ethereum involved in the treasury outflow splits to nearly 35.5 ETH per nonfungible token, or an estimated $57580.
Due to the fork, the holder’s original nonfungible tokens will be returned to the DAO treasury. Every holder will be provided a replacement NFT with similar artwork for the new decentralized autonomous organization. Further, the new DAO will allow ‘ragequitting,’ members can seize their share of the treasury, the 35.5 ETH per nonfungible token, and renounce their profile picture (PFP) permanently.
The initiative indicates a lack of trust from those who believed in the present Nouns DAO plan. Such occurs despite ETH worth millions of dollars used since the project’s unveiling in 2021 to finance several Nouns-concept project initiatives.
Nouns NFT Value Nosedives Despite the Million-Dollar Expansion Initiative
Millions of dollars have jointly been utilized for Noun-themed initiatives to ensure the brand’s expansion. This entails a parade float in the 2023 Rose Parade, 3D-printed apparel, vinyl toys, an esports team, a comic books series, and more projects. Further, there was the purchase and granting of a Nouns NFT to Bud Light that later utilized ‘Noun glasses’ for its Super Bowl commercial in 2022.
Like the rest of the NFT space, Nouns’ market value has dropped significantly since late 2021 and early 2022. Data from NFT Price Floor shows that on the secondary marketplaces, the price floor, or cost for the low-priced nonfungible token listed for sale, has reduced from ETH worth $267000 in December 2021 to nearly $57740 today.
In short, despite the open-source Nouns brand potentially growing over time via different DAO-financed marketing initiatives and media projects, a significant reduction in market value has occurred. Some members are willing to cash out now amid the fierce bear market and regain some of the return instead of retaining their membership in the community.
Nouns Protocol Devotes to Boost Spending
Hindsight, a pseudonymous NFT holder, wrote on the fork page that the sudden twist was not good. Further, they claimed that despite this robust signal, there is a lack of recognition concerning what led them there and the information concerning the means to evade them in the future or rectify them now. Finally, no firm can oppose the gravity imparted on it by a combination of poor decisions.
A Nouns protocol realized a successful upgrade at the onset of 2023 to enable the fork. It permits NFT holders to suggest a fork to exit the decentralized autonomous organization and jointly recoup a portion of the treasury. Further, suppose a quorum of no less than 20% of the tokens join through their corresponding holders. In that case, it will be implemented and finally finished after a waiting period to allow more holders to join the departure plan.
Following the fork, the Nouns DAO remains with 13310 ETH or nearly $21.7M. The remaining NFT holders will still be capable of voting on proposals and aid in financing distribution to promote the brand’s growth. Further, this brand is developed on a Creative Commons o (CCo) permit that permits any person to utilize the artwork to create and sell derivative projects.
A tweet by the pseudonymous Seneca, a Nouns cofounder (or Nounder), shows the need for the remaining members to bolster their efforts ‘by boosting spend’ to charge builders and creative initiatives. Additionally, ‘forked Nouns distribution’ potential members should help in the process.
Seneca wrote that a significant lesson from the fork is that failure to utilize the treasury in the Nouns game erodes its immunity to hijacking. Further, this part of the game has been made clear.