Nouns DAO is forking again 

The high-spending DAO is seeing millions more dollars flow out of its treasury just weeks after losing $27 million


Nouns DAO executed a so-called fork last month following disgruntlement with the DAO’s freewheeling spending habits. After a proposal went live which would force Nouns to keep spending its treasury, the DAO forked a second time.

Nouns DAO, which mints one NFT every day and uses the funds to advertise the project, instituted forking in May as a form of minority protection. So far, 62 Nouns, or about 20% of treasury’s holdings, have joined the fork, which finalizes Wednesday morning. The early outflows totaled 2035.49 ether, worth around $3.2 million at the time of writing, and will add to the more than $27 million lost in the first fork. 

The Noun fork mechanism technically allows erstwhile holders to use the project’s code for a spinoff project, but participants in September’s fork don’t seem to be interested in a Nouns rebrand. The fork contract shows 224 separate transactions of users claiming their share of ether (ETH), leaving under 1,000 of the original 16,000 ETH remaining in the fork’s wallet. 

At the time, Nouns contributors told Blockworks some of the Nouns holders who left were interested in an arbitrage opportunity where Nouns could be bought for below their book value, or proportional share of the DAO’s treasury.

After the fork, a Nouns proposal went live that would burn, or liquidate, part of the Nouns treasury at given intervals if a sufficient amount of ETH was not spent, in essence forcing the DAO to regularly spend its treasury. Part of the rationale for the proposal outlined in a blog post was to eliminate the arbitrage opportunity by spending down the Nouns treasury and thus lowering the book value of each Noun. 

The proposal led to Nouns’ second fork, which curiously was executed days before the offending proposal finished its governance vote. The proposal currently lacks the votes needed to pass. 

The fork will allow some holders to profit via arbitrage. The Nouns price floor fell to as low as 25 ETH in recent weeks, per NFT Price Floor, and the current Noun book value is around 27 ETH, or roughly $42,500, according to a Dune dashboard.

But the fork isn’t all arbitrage, with at least one former holder fully exiting the project. 22 of the 62 Nouns joining the fork came from Patricio Worthalter, a longtime Nouns holder who fully closed his position after claiming 24 Nouns worth of treasury funds in the last fork. One of Worthalter’s soon-to-be-forked Nouns cost 113.33 ETH to acquire, worth around $357,000 at the time it was minted.

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.


Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Unlocked by Template.png


With the spot ETH ETF approval, the institutions are coming. stETH - given its dominance in marketshare, existing liquid market structures, and highly desirable properties - is poised for institutions.


Launching cryptocurrencies the old fashioned way may soon make a return


Kraken and CertiK brought their beef to social media after Kraken said researchers exploited $3 million through a bug


NVIDIA’s historic run is only deepening the divide between mega-cap tech stocks and the rest of the market.


EIP-7702 was quickly adopted for the next Ethereum upgrade, but developers haven’t quite locked it down