not opposed but will draw attn to proposer (and all potential swappers) that if/when % exit is deployed there is a reasonable chance it will mean the exit value of the swapped noun is 0 (treasury nouns may have no claim on treasury). if willing to accept the risk then this prop is imo a clear win-win
back and forth on swapping from treasury. in general i disagree we should be endorsing use of $nouns pool in any way but unsure this works either. I think my favorite option for noun scout is still a token for claiming the current days noun (ideally an upgrade to settle where you can settle and claim the noun in one tx in exchange for the token), and for everyone else settling a noun they love and bidding is a great option! spend some hrs and get to know the crystal ball
@0x560D...79E6
added links so folks can review.. still looking into cxling vs converting donations to steth (probably not a good idea)
@lilfrog @monografia I agree w wanting to see more in-network props, but thought paying homage to prop 1 could be a fun way to address current stressors (indeed the alternative vers of this prop would be to simply redistribute funds linearly, either to all eth holders via burn or to, say, active nouners based on vote record etc). 20% is, if anything, probably too conservative if wanting to see consistent real new member interest & reduce drain.
though i would agree we don't need to be hyper-focused on arbers, it's also true, imo, that waste is ultimately not very Nounish. While we can debate the utility of philanthropy in general, Nouners i think generally subscribe to the more traditional view that its worth trying and many these orgs are conscientious about studying the nature of the impact they make.
>
>
> Why 7? Why this amount? Why not a stream? Why not 10% or 5%? But most of all:
>
> +++ "Why not developing our own public goods that can leave an impact rather than giving away to other charities as a means of supporting public goods".
>
> It feels like a productive alternative to "The Burn," but at the same time, it sounds like: "we are running out of ideas/projects."
>
> +1
>
> > I’d much rather support developing our own public goods that can leave an impact rather than giving away to other charities as a means of supporting public goods.
> >
> > This would be a pretty huge spend too, almost 20% of the treasury. I’m a bit skeptical auction prices are going to recover much so this would take almost a full year to recover.
> >
> > I’d be open to giving to these orgs but maybe not at this amount.
# prop 1+
7 Charities (in tx order):
GiveWell: 333.3 Eth [https://www.givewell.org/about/donate/cryptocurrency](https://www.givewell.org/about/donate/cryptocurrency)
GiveDirectly: 333.3 Eth [https://www.givedirectly.org/crypto/](https://www.givedirectly.org/crypto/)
Khan Academy: 222.2 Eth [https://donate.khanacademy.org/give/419869/#!/donation/checkout](https://donate.khanacademy.org/give/419869/#!/donation/checkout)
Internet Archive: 111.1 Eth [https://archive.org/donate/cryptocurrency/](https://archive.org/donate/cryptocurrency/)
Rainforest Foundation: 111.1 Eth [https://rainforestfoundation.org/give/cryptocurrency/](https://rainforestfoundation.org/give/cryptocurrency/)
Tor: 55.5 Eth [https://donate.torproject.org/cryptocurrency/](https://donate.torproject.org/cryptocurrency/)
Freedom of Press Foundation: 55.5 Eth [https://freedom.press/donate/cryptocurrency/](https://freedom.press/donate/cryptocurrency/)
In a nod to the spirit of Prop 1, I've compiled a slightly expanded list based on similar reasoning (all the addresses are publicly available) but at much higher Eth amounts, very loosely proportional to the annual budgets of the respective beneficiaries. I'm open to parsing it out into separate props or adding others in the modify period if voters have granular perspectives, but the scale, in aggregate, is deliberate:
IMO it's a good fiduciary standard (just a personal sense, not a legal opinion) to maintain in Nouns that we prioritize distributing treasury funds in alignment with Nounish values while minimizing drain & supporting low friction exit rights (imo desirable & necessary for durable protocol security regardless of treasury size).
Though I previously explored other directions (eg sending eth to rounds multisig), I've settled on efficient charitable donations as the more holistic solution to bring on-chain. Distributing to a single custodian/pair could potentially have adverse regulatory (& ultimately tax) implications for the DAO which I am confident shouldn't be the case with this approach.
This prop also expresses my view that Nounish economic equilibrium means allocating a larger % of annual contributed funds to public goods. If irl entities with similar values are mandated to spend 5% of annual contributions/revenue on charitable purposes, its a perfect opportunity to demonstrate positive sum energy by 5-10xing that amount, of our own free will, and without the benefit of guaranteed tax incentives to do so. I hope we can use occasional near-term-impact grants like this as a grounding counterbalance to our (just as important) ambitious experimentation in expanding our reach. please consider supporting!
not a rug, will add links to all addresses (7 tx to 7 wallets)// in any case was just informed maybe not enough eth in treasury so will confirm/resubmit
# prop 1+
7 Charities (in tx order):
GiveWell: 333.3 Eth
GiveDirectly: 333.3 Eth
Khan Academy: 222.2 Eth
Internet Archive: 111.1 Eth
Rainforest Foundation: 111.1 Eth
Tor: 55.5 Eth
Freedom of Press Foundation: 55.5 Eth
In a nod to the spirit of Prop 1, I've compiled a slightly expanded list based on similar reasoning (all the addresses are publicly available) but at much higher Eth amounts, very loosely proportional to the annual budgets of the respective beneficiaries. I'm open to parsing it out into separate props or adding others in the modify period if voters have granular perspectives, but the scale, in aggregate, is deliberate:
IMO it's a good fiduciary standard (just a personal sense, not a legal opinion) to maintain in Nouns that we prioritize distributing treasury funds in alignment with Nounish values while minimizing drain & supporting low friction exit rights (imo desirable & necessary for durable protocol security regardless of treasury size).
Though I previously explored other directions (eg sending eth to rounds multisig), I've settled on efficient charitable donations as the more holistic solution to bring on-chain. Distributing to a single custodian/pair could potentially have adverse regulatory (& ultimately tax) implications for the DAO which I am confident shouldn't be the case with this approach.
This prop also expresses my view that Nounish economic equilibrium means allocating a larger % of annual contributed funds to public goods. If irl entities with similar values are mandated to spend 5% of annual contributions/revenue on charitable purposes, its a perfect opportunity to demonstrate positive sum energy by 5-10xing that amount, of our own free will, and without the benefit of guaranteed tax incentives to do so. I hope we can use occasional near-term-impact grants like this as a grounding counterbalance to our (just as important) ambitious experimentation in expanding our reach. please consider supporting!
level-up-auction-ux-with-nouns-terminalwill reiterate what have shared elsewhere for customer feedback/ I do look at nouns.sh but my ideal 'client' for auction (as well as gov) is one i can run locally (w my own endpoint) and would rather not have to use a server-hosted solution. Would happily direct my share of client incentives to such a product (if well-thought-out) both on governance and auction side of things. I currently use etherscan as the best bad option for auction and camp for VwR only bc etherscan does not afaik support markup... my share of auction rewards through feb 25 prob will pay the funds requested fwiw.. happy to be a guinea pig . imo self-hosting is an important underexplored design space for nouns durability . in an ideal future we're all running our own nodes anyway .
(Auto-bidder, for example, works best off-chain and self-hosting is ideal way to make sure the bid amount is hidden, for example)
tldr; backwards step for decentralization unless i keep throwing money away
do nouners generally subscribe to a code-is-law ethos? can client incentives be used any way the protocol allows? if so, then this HAS to be defeated, since the 90 eth is a trivial honeypot for large coordinated voter blocks.
If not, maybe someone can take a crack at outlining the parameters for appropriate use of the protocol, what may qualify as abuse and what recourse Nouns may have/exercise if those bounds are violated.
Is it inappropriate for client NFT holders to sell their asset? If they do, what are the consequences? Is there an amount of market share we don't want any one client ID to capture? if so, why isnt this protocolized? if not, how does that encourage decentralization/redundancy of infrastructure?
Nouns cannot succeed if token holders must continually resist the near term appeal of claiming these airdrops in a value extractive way. Its a problem the L1 faces as well, so I'm not shaming anyone, but we need to push harder.
its time to start demanding higher durability from the protocol. We should aim to be an exemplar of what progress in crypto governance can look like, not a poster child for its deficiencies. This is a step in the wrong direction since it redoubles the DAO's dependency on well-capitalized benefactors propping thing up/ deferring the catastrophes that would unfold on a level playing field.
True incentive compatibility may be unattainable but I'm confident this is in the wrong universe.
One answer is to (reject this and) restrict the vote/auction incentives to 1 per unique nounish entity (and to establish the protocol for identifying these entities) and stop incentivizing proposing (or set anti-spam to be governed by its own dynamic quorum parameters). Take a deposit for proposing and reward successful props. Decentralize the veto.
Is really is necessary for these things to be in place (or other mechanisms reproduces their effects) for this idea, or nouns generally, to work. going backwards like this (deploy wrong thing, get rekt, iterate) is wasteful, slow, and ultimately demoralizing.
I continue to plead with Nouners to begin to acknowledge these issues and to stop falling into the same traps as much of the rest of the space. trivially gameable mechanisms are not a good look.
if people disagree this is trivially gameable it would imply there is seen to be some role of the foundation or other off-chain, possibly litigious mechanisms for enforcing boundaries. am interested to hear how that might work since i've also explored these and they haven't seemed to be very effective...
rounds is the key but only the extent to which it can be made trustless & durable at scale.
didnt have conviction here because feel disappointed there is isn't a clear onchain roadmap or much of an attempt to address the sybil resistance challenges rounds is likely to face as it tries to grow (beyond the brief reference to the farcaster social graph). proof of concept is imo not needed and in any case not esp useful bc the (mostly) offchain model is likely to have little in common with a version that can be protcolized, with high-SNR of voter/contributor participants (ie bot-resistant, etc) while still being low friction/good ux etc. I believe its possible but that it needs to be an explicit priority in order to make meaningful inroads. How is the graph going to be leveraged algorithmically? What supplemental mechanisms (if any) are are being considered to check against bias at the platform level? Is there a research budget? Imo its clear there are big existential problems (not too far) ahead in this area for rounds, as there continue to be for $50b social media companies, & relying on the centralized aspects of Farcaster is prob not a panacea.
Any response to this concern after the fact would be appreciated, to give a better sense of what protocolization roadmap might look like, but still emphasize that its distressing that it has gone from a focus (with prop house protocol) to something marginal when its really *the whole thing*- whether the idea can actually be made to work in an automatic and distributed way without central controls of some kind.
Lot of fun games out there already that work exactly because of moderation. Personally dont think its good enough for rounds to be another one of those. Hoping we can align on putting a big % of the brain/economic power that will go into rounds towards making it credibly neutral and infinite, which likely means not overly dependent on the farcaster team and its investors
using the platform to remind anyone thinking financially about Nouns that I believe strongly in aggressive Noun recirculation.
Might be quite a bit more dilution coming & in that context the prop is a no-brainer. Feeling aligned/enriched with VwRs is great, but my personal view is that the relevant criteria are slightly different; is there a unique entity behind the receiving wallet, do they own a noun already, are they likely to fork? imo caring about nouns/being intelligent are fantastic supporting properties but probably less important than the first 3.
(is a bit of a subtle point but imo the correct way to reward vwrs is prob via meme-denominated payouts rather than gov-denominated ones. will flesh out more in other forums.. )
to be clear i'm also v glad we have these vwrs adding to the conversation. Welcome Drew!
+1
> i think there are some valid concerns raised by prev. voters, but trying to keep it as simple as possible:
>
> would nouns benefit from having drew as a member? i think the answer is yes.
abstaining bc I love hackathons and the funding model generally but don't understand the mandates well enough around the round, whether it biases for Base-related projects or is supportive of work amplifying other L2s/L1 etc. Depending on the details, its possible i would feel very wtf about Nouns directly subsidizing a corporate-sponsored ecosystem, even though I understand well how they are likely an important strategic ally in the near-term.
Lot of questions & general skepticism about the economic structure behind Base but will leave it there for now.
don't doubt there will have some great output; look fwd
negatives first
am seeing a somewhat surprising/encouragingly tepid response overall for the fungible tokens. As i said before, I'm generally unsure about fungibilizing; another way to express my hesitation is: if people are willing to convert to fungible, it means they have appraised the non-fungible value of their Noun at 0. I think this is likely a big structural problem if it takes hold at scale, and skewers a major competitive advantage Nouns has intrinsically as an NFT-based network.
a second concern i have is if we explore % exit further this will complicate the picture for the fungible pool. For example, I think there is potential utility in setting some treasury nouns exit value to 0 and distributing them as pure governance. Clearly this requires some consideration in the context of either proposed erc-20.
These are major strikes against this prop, in addition to reg concerns mentioned by 41 & elsewhere.
Still
the vote IS fungible, and has value, and imo this is definitely something we want to distribute with higher granularity; the committed, zealous engagement of lilnouners, nouncillors etc give me conviction that there are a lot of competent, hungry governors out there that just need an onramp to participate. I think there is major upside to us and Ethereum generally in providing that access. Even without the erc-20, seamlessly functional/fair fractional NFT governance is more than worth the price of admission, and for that reason i end up heavily FOR
this prop is to develop contracts that can be used to drastically improve the condition of all nounish subdao governance, solving a major vulnerability that members of lil nouns, nouncil and sharkdao know all too well. Proportional representation over nouns votes is, imo, easily worth 10x the cost, just by itself.
We also get contracts facilitating flow of props from Nouns into the subdao, also an important unlock. These two features together, along with proposing & cross-chain execution (out of scope here but forthcoming), make subdao governance finally work. Worth 100x the cost, as a package, imo.
We also get granularity of Nouns nfts, ability to burn/recombine into different voting weights, collecting/sharing art as desired (imagine if sharkdao distributed 10000 swim shadys, or if we had 1111 slices of Noun 1111). It unlocks building digital identity at any price point, or simply enjoying generative Noun minting in a generous / open sandbox. While I am currently quite excited about this piece, my conviction is a bit less strong as to implementation than on the governance spec which i feel is probably pretty close to perfect. Definitely open to ideas/discussion there. For example, do we limit how small/large the fractions can be or how many overall (current thinking no), or add a fee switch so the protocol can generate revenue from the open-edition approach to Nouns minting (current thinking no).
On the regulatory side, it seems self-evident that if a Noun is not a security, then neither is a Noun with 0.5 vote instead of 1 vote.
We can table deploying the erc-20 and still get a significant amount of non-contentious functionality out of these new contracts. In this framing, the risk is limited to 14eth and the upside in acquiring the uncorrelated thought energy of N new long-term participants who are currently priced out is, while hard to quantify, probably a >1 multiple of our current market cap.
in the end i have strong misgivings about whether financial exposure to the fungible parts of Nouns can/should be something seen as desirable. In my big-picture thinking the way we make Nouns 'work' (amenable to progressive decentralization at scale) is if the economics bias ever-more strongly towards amplifying the non-fungible bits; individual Nouns differentiated by ID, brand, governance narratives etc enjoy unbounded value accrual potential, while 'dormant' Nouns parroting a the view of a parent wallet or simply not doing anything are effectively taxed for being undifferentiated/ not providing unique value to the network.
viewed through the above lens this token starts to look a bit different, since, stripped of governance/digital identity, it would amount to taxation w/o representation. it's not that i think the # can't go up, but that it's in our collective interest to make it more and more difficult for that to happen, biasing instead for differentiation among circulating Nouns, in whatever meaningful character dimensions we can identify. This approach will tend make the dao more secure (& imo) more interesting/more fun.
Nouns sitting in the treasury or in LP does not fit so well with that goal, & i wonder if buyers, unable to leverage the tools of ID, PFP, Vote to build their Nounish life atop, will ultimately find themselves holding a structurally receding % of network value.
"Nouns are an experimental attempt to improve the formation of on-chain avatar communities. While projects such as CryptoPunks have attempted to bootstrap digital community and identity, Nouns attempt to bootstrap identity, community, governance, and a treasury that can be used by the community."
A significant % of our holder base puts major daily brain energy into Nouns, and have done for over 3 years. Can the same be said for any Erc-20 community?
It's possible i'm wrong and ultimately we want to pivot more towards erc-20 land/lean into fungibility, so i guess i've settled on abstain to signal that i welcome a simultaneous exploration of both paths if there is enough conviction in this as an alignment tool.
hi sam. this token has significant additional features that solve many of the issues that have plagued subdaos and fractional nft ownership in this space for years. it's an art collecting and vote token. the additional features will require a significant reworking of $nouns architecture, where this token is built from the ground up with fair governance (proportional representation) in mind.
Also, selling $nouns as designed is likely to be a violation of current prevailing SEC interpretation of securities law. It isn't art, it isn't equal (or any) agency in building a decentralized protocol. This token unlocks both of those things and imo exposes the dao & potential market makers (dao members) to significantly less legal and ethical dysphoria.
I'm the largest potential liquidity source currently for one or both of these, until a market making firm comes around asking for a bunch of treasury nouns at a discount. My personal feeling is the risk is far too great to LP $nouns, and doesn't feel good to contemplate standing in court defending something that i happen to agree is structurally exploitative. Remember the only way to buy these tokens is from rent-seekers.
This token is a completely different thing- it may still attract scrutiny, but its a good-faith effort to provide a complete Noun ownership experience and offers something vastly better than the status quo of what is available in the space wrt fractionalized NFT governance. I would be proud to defend it if it ever came to that.
if $nouns wants to adopt the spec, amazing. My current understanding is they prefer to speed-run the existing version; the consequences are that we will, in the meantime, squarely have (possibly thousands) of second-class citizens in Nouns and expose sellers to downstream regulatory risks. Why go down that road? this is presented as an opportunity to avoid some of that trauma while still running the fungible token experiment.
# $⌐◧-◧, aligned participation in Nouns
**Tldr;**
Fund the development of a canonic fractional erc-20, $⌐◧-◧, and associated fractional Noun NFT, modeling the collector/community-participation experience characteristic of Noun ownership, and making it available at any price point.
Estimated build phase is 4 weeks, which will be followed by an audit funding request similar to other proposals involving contract deploys. Cost is 14 eth
_____
This proposal is to fund the development of a voting-enabled Nouns fungible token, $⌐◧-◧, with full proportional representation (!) over Nouns proposals & PFP collecting via conversion to a fractional Nouns 721. The ability to propose to Nouns (currently 1 per 2m $⌐◧-◧ in circulation due to the individual vault architecture) will be integrated in a follow-up proposal, along with a proposal for L2 integration/cross-chain execution which will substantially reduce the cost of participating in on-chain governance
**Functionality**
* Enable any user to deposit a Noun NFT, and mint 1M shares of $⌐◧-◧ (ERC20 tokens)
* Store each available Noun NFT in a separate, and individual vault, facilitating proportional representation in voting and ultimately proposing to Nouns
* Enable any holder of $⌐◧-◧ tokens to wrap them into a fractional Noun NFT with voting power proportional to # of wrapped tokens
* Combine above functionality to allow minting of fractional Noun NFT directly from a Noun
* Enable holders of fractional Noun NFT to vote on Noun governance proposals, delegate their vote to others
* Disable wrapping/unwrapping of fractional NFTs when they have a pending vote
* Allow holder of 1M $⌐◧-◧, or of fractional NFTs totalling 1M to redeem ANY Noun NFT of their choice in the protocol
* The subdao protocol will be able to read live props from the existing Nouns contract, once a willing user triggers it via a tx
* Upgradable contracts
Voting Logic
* Voting for a proposal starts as soon as it is triggered via a tx (after being triggered on Nouns DAO)
* Voting period ends 24 hrs (configurable parameter) before the end of the original proposal on Nouns DAO, so that votes can be relayed via a permissionless tx
* Votes cast (Yes, No, Abstain) will be floored to the nearest Million, and voted by that many Nouns
* The remaining Nouns (if any) will not vote in this proposal
eg. 3 Nouns in protocol. 1.3M Yes, 1.5M No. ==> 1 Yes Vote, 1 No Vote cast
NFT Art:
* Nouns Descriptor
* When a Noun is deposited, all fractional NFTs minted from it in the same tx have the same art as the deposited NFT
* When $⌐◧-◧ tokens are wrapped into a fractional NFT, the art is generated randomly by blockhash in the same way as NOUN settlement
* This will inevitably lead to multiple fractional NFTs having the same artwork, and that is acceptable
Future Work / Not in Scope:
* Submitting proposals to Nouns DAO
* Submitting proposals to this protocol/sub-DAO, and voting on them
This is presented as an alternative to $nouns, which is currently only price exposure to the demand dynamics of the Nouns auction. Of course both tokens can coexist and prospective Nouners can choose their preferred onramp.
The developer, TheNobleDev (thenobledev.eth) has successfully deployed contracts of similar complexity and project scale, and I personally find him to be highly reliable & ethical/trustworthy. Regardless, an audit will precede any proposal to deploy.
Work examples:
Shiba Inu Metaverse
Shibyard Land Auction: https://etherscan.io/address/0x6b74c5885d2E08eFd80164965F8df002608EbffA
FTMX, liquid staking protocol on Fantom chain, developed by StaderLabs (solo dev work)
FTM Staking Audit Reports
https://www.staderlabs.com/docs/Peckshield/StaderLabs%20Fantom%20Smart%20Contract%20audit%20report%20by%20PeckShield.pdf
https://www.staderlabs.com/docs/fantom/StaderLabs%20sFTMX%20Smart%20Contract%20Audit%20Report%20by%20Halborn.pdf
Staked FTM (sFTMX) token: https://ftmscan.com/address/0xd7028092c830b5c8fce061af2e593413ebbc1fc1
FTM Staking Contract: https://ftmscan.com/address/0xb458bfc855ab504a8a327720fcef98886065529b
come play $⌐◧-◧
stand by all of my earlier comments
some things to consider
afaik anyone can register an id & mint an nft. wrt to the contracts/changes, this is all a 'client' is.
if true, at the on-chain level these are direct incentives to engage with the protocol. They are , in the plainest sense possible, not incentive-compatible with the stated purpose.
The noun-owner decides which id to route to. they will push rewards to the ids they favor.
i encourage thinking opportunistically (imagine you are someone with a lot of votes that wants to use these incentives to steer behavior or farm) .
The majority can drain because they can claim all the incentives (distribute nouns to indiv wallets, produce n + n^2 interactions per vote cycle) and vote to approve. seems little basis for saying the efficient outcome is unlikely to happen.
its tricky to force specific off-chain behaviors (esp of secondary actors/ middle-men) with on-chain mechanics. while, at a small enough network size people may play along, this doesn't relieve any governance burden since the dao will be deciding case by case on subsidizing clients, which is already the default state.
its on-chain bloat without any real possibility of scaling benefit & downstream it leads to further centralization.
the thing i think no one wants to face but that i think we can do relatively easily- sybil layer/ nounish personhood badge- makes it work.
# stake 1k in rounds
*I didn't consult with this multisig before proposing this idea. i wanted to lay out the case in this format & hopefully generate some discussion; they can ofc signal they don't want to receive and the prop won't proceed.*
**tldr**
tx
1000 eth to the rounds multisig (Soli+Seneca)
campaign
* guarantee that rounds can experiment/scale over the next 12/24 mo
* reduce the exit (via fork) incentive, improving the seed liquidity prospects for the launch of $nouns, increasing the likelihood of adoption
**securing rounds' future**
I think many in the network recognize the outsized potential of rounds to revolutionize Nouns. Super low-friction, maximally diffuse, all-inclusive sandbox funding feels to me like the most interesting path forward, and I don't think I'm alone in this sense. I'm personally convinced that there's unlikely to be a better use of reserves in the next year.
The treasury's future trajectory is uncertain due to the volatility of inflows / spending rate, and potential forks. For instance, if a fork 3 occurs, it will deduct roughly 20% of the treasury in contributed eth and 10% of the treasury in extracted/arbed eth. The impact on the treasury of a fork 4 is likely to be worse in % terms. It would be unfortunate if rounds couldn't be afforded the opportunity to significantly scale up its efforts when ready. While I'm generally not a fan of large outlays to multisigs, in this case it feels healthy to make sure its future is assured.
**impact on FORK / $nouns**
Additionally, earmarking this ETH reduces any exit premium currently embedded in the value of Nouns, lowering the floor price by as much as 20% before the potential deployment of the $nouns contracts.
*Who is the possible LP for $nouns?*
As it stands there is virtually 0 sell-side liquidity below current pro-rata book value (currently >10eth). This is because the financially-oriented owners (holders of all the "floor" nouns) all hope, at a minimum, to be able to sell back to the DAO via fork near this price.
This group of owners constitutes the potential market makers/LP for $nouns at launch, because they are the group that may be unattached to their Noun(s) and willing to deposit in the redemption pool. Given that the majority of pre-fork 2 Noun owners were uninterested in selling at 22, 33, 36 eth, it's unlikely they will now jump at the chance to sell at 10, let alone below.
*At what price will $nouns be offered?*
In order for there to be a successful launch of $nouns it is important there be reasonable liquidity in the AMM. 20 nouns would be a modest goal, with a number closer to 50 (or near 10% of total supply) being much better. But is also important that there is an offer price reflective of current fair market value, to attract buyers irrespective of where we are in the fork cycle at launch (ie priced as close to the current meme+governance value of NOUN as possible). Whether that price is 4, 7, or 9 eth, it makes sense to lower the price floor implied by the fork since generally buyers of $nouns will not be interested playing a (likely losing) near-term arbitrage game, but looking for a fair initial price, accurately reflective of true steady-state supply/demand.
In general, potential $nouns market makers are hoping to capture a minimum of 10.7 eth per noun. While the potential to accrue a blitz of transaction fees in the launch may incentivize a slightly lower initial price for the AMM, if you study recent successful memecoin launches with similar market caps, an optimistic estimate for initial price may be 7 eth, with likely not more than 10 nouns available below 10.7. This is because, while transaction fees may yield 10-30% on total liquidity in the first weeks, this yield quickly falls and is not enough incentive to offer meaningful inventory or sustained liquidity below the risk-free exit level.
nogs and higher tx fees around launch
https://info.uniswap.org/#/base/pools/0xe22a2dfaaaaec8a7b2b7acb4909eaaa5c5bd6e64
https://info.uniswap.org/#/base/pools/0xcc28456d4ff980cee3457ca809a257e52cd9cdb0
*What happens after launch?*
If retail demand for $nouns does not push demand squarely above 10.7, as transactions slow after the initial blitz, the LP will, in all likelihood, pull liquidity en masse, redeem NOUN and fork. In order for this not to occur, the launch will need to attract 1500+ eth at the entry price of roughly 10 per Noun or likely much higher. Due to the forking threshold, there will be a hesitancy to sell too many Nouns near this level since there is a risk of forfeiting the needed inventory to meet the threshold and helplessly watching the fork value fall as Nouns progressively spends.
By lowering the protective put (exit price), we increase the chance that the financially-oriented owners will look to the $nouns pool for exit liquidity/profit from fees etc rather than towards capture of treasury (*see below for comments on the case where this prop itself triggers fork). Much of the sell liquidity will be forced 2 eth lower, accommodating demand at 8eth, if it materializes. Of course the best way to ensure strong engagement with $nouns at launch is with addtl productive spend-down.
If successful, we may prevent fork eth from leaving our treasury, effectively redirecting (a portion of) its value to one of our highest-upside projects, and engineer a more vital $nouns market at launch in the process. The risk to Nouns is that we wish we could redirect this eth to another project down the road (which may still be possible by requesting a partial return from the multisig?).
*What happens if prop triggers fork?*
It may also be possible that a fork is successfully executed before this prop transacts. This is still a positive outcome. Liquidity will build up in the weeks following fork at a much more aligned price (auction prices will dislocate towards the meme+gov value due to forking threshold); if we don't do it the fork is likely to occur before too long anyway but may or may not happen in a timely manner wrt $nouns. And, post-fork, the arber bid may still be higher than what the market will be willing to pay for $nouns, due to the still-elevated exit price.
*conditional logic*
If sufficiently optimistic about rounds, if $nouns proposers are intent on speedrunning deployment, and if high likelihood of strong engagement at go-live is a priority, executing this tx is seemingly implied. stake-1k-in-rounds
# stake 1k in rounds
*I didn't consult with this multisig before proposing this idea. i wanted to lay out the case in this format & hopefully generate some discussion; they can ofc signal they don't want to receive and the prop won't proceed.*
**tldr**
tx
1000 eth to the rounds multisig (Soli+Seneca)
campaign
* guarantee that rounds can experiment/scale over the next 12/24 mo
* reduce the exit (via fork) incentive, improving the seed liquidity prospects for the launch of $nouns, increasing the likelihood of adoption
**securing rounds' future**
I think many in the network recognize the outsized potential of rounds to revolutionize Nouns. Super low-friction, maximally diffuse, all-inclusive sandbox funding feels to me like the most interesting path forward, and I don't think I'm alone in this sense. I'm personally convinced that there's unlikely to be a better use of reserves in the next year.
The treasury's future trajectory is uncertain due to the volatility of inflows / spending rate, and potential forks. For instance, if a fork 3 occurs, it will deduct roughly 20% of the treasury in contributed eth and 10% of the treasury in extracted/arbed eth. The impact on the treasury of a fork 4 is likely be worse in % terms. It would be unfortunate if rounds couldn't be afforded the opportunity to significantly scale up its efforts when ready. While I'm generally not a fan of large outlays to multisigs, in this case it feels healthy to make sure its future is assured.
**impact on FORK / $nouns**
Additionally, earmarking this ETH reduces any exit premium currently embedded in the value of Nouns, lowering the floor price by as much as 20% before the potential deployment of the $nouns contracts.
*Who is the possible LP for $nouns?*
As it stands there is virtually 0 sell-side liquidity below current pro-rata book value (currently >10eth). This is because the financially-oriented owners (holders of all the "floor" nouns) all hope, at a minimum, to be able to sell back to the DAO via fork near this price.
This group of owners constitutes the potential market makers/LP for $nouns at launch, because they are the group that may be unattached to their Noun(s) and willing to deposit in the redemption pool. Given that the majority of pre-fork 2 Noun owners were uninterested in selling at 22, 33, 36 eth, it's unlikely they will now jump at the chance to sell at 10, let alone below.
*At what price will $nouns be offered?*
In order for there to be a successful launch of $nouns it is important there be reasonable liquidity in the AMM. 20 nouns would be a modest goal, with a number closer to 50 (or near 10% of total supply) being much better. But is also important that there is an offer price reflective of current fair market value, to attract buyers irrespective of where we are in the fork cycle at launch (ie priced as close to the current meme+governance value of NOUN as possible). Whether that price is 4, 7, or 9 eth, it makes sense to lower the price floor implied by the fork since generally buyers of $nouns will not be interested playing a (likely losing) near-term arbitrage game, but looking for a fair initial price, accurately reflective of true steady-state supply/demand.
In general, potential $nouns market makers are hoping to capture a minimum of 10.7 eth per noun. While the potential to accrue a blitz of transaction fees in the launch may incentivize a slightly lower initial price for the AMM, if you study recent successful memecoin launches with similar market caps, an optimistic estimate for initial price may be 7 eth, with likely not more than 10 nouns available below 10.7. This is because, while transaction fees may yield 10-30% on total liquidity in the first weeks, this yield quickly falls and is not enough incentive to offer meaningful inventory or sustained liquidity below the risk-free exit level.
nogs and higher tx fees around launch
https://info.uniswap.org/#/base/pools/0xe22a2dfaaaaec8a7b2b7acb4909eaaa5c5bd6e64
https://info.uniswap.org/#/base/pools/0xcc28456d4ff980cee3457ca809a257e52cd9cdb0
*What happens after launch?*
If retail demand for $nouns does not push demand squarely above 10.7, as transactions slow after the initial blitz, the LP will, in all likelihood, pull liquidity en masse, redeem NOUN and fork. In order for this not to occur, the launch will need to attract 1500+ eth at the entry price of roughly 10 per Noun or likely much higher. Due to the forking threshold, there will be a hesitancy to sell too many Nouns near this level since there is a risk of forfeiting the needed inventory to meet the threshold and helplessly watching the fork value fall as Nouns progressively spends.
By lowering the protective put (exit price), we increase the chance that the financially-oriented owners will look to the $nouns pool for exit liquidity/profit from fees etc rather than towards capture of treasury (*see below for comments on the case where this prop itself triggers fork). Much of the sell liquidity will be forced 2 eth lower, accommodating demand at 8eth, if it materializes. Of course the best way to ensure strong engagement with $nouns at launch is with addtl productive spend-down.
If successful, we may prevent fork eth from leaving our treasury, effectively redirecting (a portion of) its value to one of our highest-upside projects, and engineer a more vital $nouns market at launch in the process. The risk to Nouns is that we wish we could redirect this eth to another project down the road (which may still be possible by requesting a partial return from the multisig?).
*What happens if prop triggers fork?*
It may also be possible that a fork is successfully executed before this prop transacts. This is still a positive outcome. Liquidity will build up in the weeks following fork at a much more aligned price (auction prices will dislocate towards the meme+gov value due to forking threshold); if we don't do it the fork is likely to occur before too long anyway but may or may not happen in a timely manner wrt $nouns. And, post-fork, the arber bid may still be higher than what the market will be willing to pay for $nouns, due to the still-elevated exit price.
*conditional logic*
If sufficiently optimistic about rounds, if $nouns proposers are intent on speedrunning deployment, and if high likelihood of strong engagement at go-live is a priority, executing this tx is seemingly implied. stake-1k-in-rounds
another thing to add after some thought is i think proposals in general are not something to incentivize; if anything there would be a cost or deposit which dao could return if proposal is deemed not malicious. Successful proposals, could receive an outsize reward.
I suggest allowing proposalreward% to go negative (maybe it can?) meaning registered ids could incur a liability/slash in theory if it transacts malicious props.
finally, rewarding votes is imo also not quite right tho i get there is contention around this (fans of token vote, might-makes-right crypto ethos etc) . You simply just need a sybil resistance layer for it to work well. The economies of scale/asymmetry for large blocks is a problem:
Legitimate clients with favored big voters will simply pass through value in one way or another to that controlling individual. it effectively destroys the credible neutrality of the client layer
was told offchain that 'word on the street' is i wanted this/ pretty wild given it's antithetical to all my values/politics in nouns. it's true that it may serve my personal short-term governance interests and that i view those interests as strongly aligned with nouns
- however -
exit rights imo, even under a flawed and inequitable design, are integrally important to positive sum world-building . they are as critical as crypto tenets such as 'freedom to transact,' 'right to privacy,' etc
any proposal that rolls them back should be viewed with hostility imo. i recognize it may be hard to stomach - no one in nouns has poured a fraction of the amount of sweat as i have into correcting this dynamic (and i believe the solution is on the way)- but in reality 0 threshold is by far the best option here. It keeps the dao maximally free from ongoing anon/arber presence (or absence) in governance and keeps the threat of progressive capture at a minimum. it also game-theoretically minimizes the overall amount of drain, as well as the volatility of drain (drain under higher thresholds is harder to predict) .
My cost basis to build my current Noun position under 0 threshold would have been close to 2x higher.
even with the discount, i think we can count on our hands the # of new engaged nouners we've onboarded at auction.
what else is there to say?
client-incentives-v1-12-dao-logic--auction-house-contract-upgradesdao permissioning of incentives creates another funnel for the economic majority to drain the minority. if it is not understood whether the economics work trustlessly then i suggest an audit along the lines of prop 528.
with due deference, the verbs are not incentives designers by trade and i feel its unhealthy to normalize nouns functioning as a playground for them to cut their teeth, especially if there are clear vulnerabilities.
Is it positive sum if a large block pushes their rewards through and rejects all smaller claims with whatever narrative about their clients' various deficiencies?
appreciate adding the settlement history ledger!
To the extent that Ethereum is an emergent organism, my money is on Nouns becoming something like its heart.
The daily auction, our primary inflowing ventricle, can at its best feel like a celebration of this process. For much of our history it has been a testament to its challenges; pathogenized into lethargy, opacity, adversariality.
What does it do to us to watch this organism attacking itself every day- tearing at its own efforts to forge a soul?
How can we ask new entrants to pour all of themselves into a de facto paternalistic governance context, where the majority of ultimate influence, however wielded, tends to concentrate via winner-take-all economics into a handful of wallets, & a smaller # still of coordinated subgroups?
For instance, I acquired this block of nouns mostly post-fork 2. While not without risk, under certain demand conditions the existing forking structure creates a too-easy path to dao dominance (which I have purposefully stopped well short of), an existential exposure to Nouns in the wrong hands. Still, because of the persistent drain and non-accretive engagement at auction, some minority interests in the dao have begun to voice support for raising the threshold above 50%. If this occurs, unresolvable capture becomes a concern.
Beyond the security risks, the endless anon bidding is culturally demoralizing. What will there be to celebrate at Noun O' Clock in the new cafe? How do we explain to the Noun-curious that the governance participation rate for new Nouns since fork 0 (excluding this block) is < 1%? How can we observe the ongoing market impact of our collective efforts if we can't properly gauge auction demand? How do we attract long term thinkers when the short game dominates valuation? How will we hold on to good-faith Nouners in a capitulating market when the game theory screams run-on-treasury?
% Exit is a potentially transformative tool for Nounish daos. Speculators hoping to extract excess auction revenue will vanish from NoC. Entities with conservative charters, for whom systemic arbitrage is a dealbreaker, can begin to consider participation. It offers low-friction, infinite capital recombination with full minority rights preserved at each instance. What could be more Nounish (and charismatic!) than a protocol that gives every token holder equal agency; that decisively leaves the door unlocked?
I often feel that I take it all much too seriously, and am then reminded in some way or other how exciting it might be if we increased our capacitance for interesting new participants with a more complete incentives design; how much more fun Nouns would be if it felt more deeply free.
There is no more vital cause in Nouns or possibly crypto generally than to devise ways to resist the centralizing force of token vote, and EXIT is one of the primary fronts in that effort.
Please consider exploring this alternative.
# Heal Noun O'Clock; Full Spec and Economic Audit of % Exit, An Arbitrage-Free Forking Mechanic
#
[ added a summary at the bottom of the prop of the case for % exit ]
*TLDR; spec % exit (value determined by auction price +/- pro-rata treasury asset fluctuations) & other ideas if brought forth by the group and do a thorough economic audit as well as an analysis of status quo (book-value) exit for comparison.
-$58k streamed
-est time to complete is 9 weeks*
*my hope is this document can help relieve some of the tension surrounding the adoption of V3, offering a grounded perspective to help us decide whether we protocolize this/another design or focus on optimizing the current program via existing levers.*
*below proposal shared from cryptecon.eth*
_____________________________
### Problem Statement
Since last year, there has been a growing divide in the Nouns DAO community between those who see Nouns as collectibles with voting rights and those who see them as arbitrage opportunities. Several measures have been taken to address the growing number of arbitrageurs holding Nouns, including initiatives such as [burning](https://w.mirror.xyz/AmHOzH-FQZVO3IhGXHSvCRxRSf2MO6VCZdmMwNEIyKE) [and](https://mirror.xyz/verbsteam.eth/W4gaOrp6NC6jopc6vGsGuhz3o4ej0G_0TFhBlcLed94) [setting](https://nouns.wtf/vote/384) [thresholds](https://nouns.wtf/vote/439). Raising the threshold did not solve the problem. The disparity has sparked extensive debate within the community. Arbers aim to predict the book value of NFTs at the time of the next fork and buy them at auction for less to ensure a profit. This strategy distracts from the real demand for nouns, pushing their valuation toward a strictly financial viewpoint and overshadowing their communal and cultural value.
### Proposal Overview
We propose to commission a focused research project to explore possible alternative exit schemes specifically designed to incorporate the uniqueness of NFTs planning to exit a DAO. This project aims to investigate different models (such as compensation based on contributed Ether) to minimize the arbitrage opportunities that distort the Nouns ecosystem. By incorporating additional factors into the treasury allocation formula, the aim is to develop a more equitable valuation mechanism that aligns with genuine demand for individual NFTs.
### Research Objectives:
* Specify the exit scheme based on contributed ETH and additional ideas brought forth by community members and Cryptecon.
* Conduct a comparative analysis of exit mechanics' incentives and economic resilience to determine which will attract more valuable bidders for the Nouns DAO.
### Menu Offer
The research project consists of the following two Work Streams:
* **Work Stream 1: Full Specification of Exit Schemes**: We start by fully specifying the exit scheme based on contributed ETH and other mechanics proposed by the community. Additionally, we explore and propose alternative exit schemes, focusing on incentive compatibility and tractability. This specification will present a clear path to implement an alternative exit scheme if the analysis is favorable.
* **Work Stream 2: In-depth Comparative Analysis and Scheme Evaluation**: This work stream examines the incentive structures and economic resilience of different exit mechanisms to determine their impact on auction engagement, focusing on attracting value-enhancing bidders to the Nouns ecosystem. We use advanced economic modeling and agent-based simulations to identify schemes that promote robust participation.
* Using **economic modeling** and game theory, we assess how various mechanisms influence the behavior of Noun bidders. The objective is identifying which exit scheme optimizes bidder contribution, enhancing ecosystem value. This model aims to unravel agents' interactions within the Nouns ecosystem, providing actionable insights into economic behaviors under various mechanisms.
* We employ an **agent-based simulation** to evaluate the performance of exit strategies under historical and hypothetical market conditions. This involves assessing price responses to market volatilities and identifying potential arbitrage risks. We perform a sequence of robustness tests using historical data to observe how these schemes would have historically performed. Additionally, hypothetical market conditions are put to the test. We evaluate the resulting prices of each exit scheme, scrutinizing how they respond to market volatilities, such as substantial fluctuations in ETH value. The objective is to surface any potential weaknesses and strengths in the schemes, ensuring they can mitigate risks associated with arbitrage opportunities.
### Costs and Duration
The project spans nine weeks and will incur a total cost of USDC 58,000. The USDC funds will be transferred daily throughout the duration of the project.
### Proposed Research Group
[Cryptecon](https://cryptecon.org/home.html) brings a deep academic background in cryptoeconomics and extensive experience in designing and auditing protocols. Their game theory and ecosystem simulation expertise are critical to analyzing and optimizing participant behavior and systemic resilience within the Nouns ecosystem. Their track record makes us an ideal partner. Cryptecon's approach to solving complex decentralized system challenges aligns with Nouns DAO's vision for sustainable growth and innovation.
### Past Relevant Projects (more on [cryptecon.org](https://[cry](https://cryptecon.org/home.html)))
- **[Synthetix](https://synthetix.io/)**: We supported the team in the design phase of their future contract project, using simulation and game-theoretic analysis.
- **[Polkadex](https://polkadex.trade/)**: We helped during the design phase of the cryptocurrency exchange, designing the token economics and the automated market maker.
- **[Pact.fi](https://www.pact.fi/)**: Support designing efficient incentive mechanisms and setting a fair price for the exchange's assets.
- **[Folks Finance](https://folks.finance/)**: Long-time partner. We helped set up their lending platform with simulations for parameter setting and game-theoretic analysis.
_______________________________
% Exit properties:
-Arbitrage-free alternative to current design (likely ends the anon bidding era)
-durable layer of protection from contentious proposals in any context (due to superior compatibility with low forking thresholds), substantively reducing dependency on veto
-gives capital a way to gain exposure & exert influence on the DAO other than via vote-hoarding. the point is not that the incentive to accumulate votes is eliminated, but that if we decide to discourage it through other novel mechanisms we should still be able to raise funds effectively via Noun sales.
-opens Nouns up to a new range of participants, such as non-profits, for whom periodic treasury drain may generally make Nouns investment/contribution a non-starter
-can accommodate rapid demand expansion (ie scaling) much more fluidly than now; currently entering at large premiums to BV badly exposes the buyer (and Nouns itself) to strong dao-wide forking incentives in the event of a sudden price contraction, which will always to some degree constrain the what one may pay to join. Under % exit there is no upper bound.
(this summary is my take which cryptecon is not incentivized to echo. they will provide a neutral analysis which may undermine some or all of the above. thank you!)
Noun removed & some context on % exit added
# Heal Noun O'Clock; Full Spec and Economic Audit of % Exit, An Arbitrage-Free Forking Mechanic
#
[ added a summary at the bottom of the prop of the case for % exit ]
*TLDR; spec % exit (value determined by auction price +/- pro-rata treasury asset fluctuations) & other ideas if brought forth by the group and do a thorough economic audit as well as an analysis of status quo (book-value) exit for comparison.
-$58k streamed
-est time to complete is 9 weeks*
*my hope is this document can help relieve some of the tension surrounding the adoption of V3, offering a grounded perspective to help us decide whether we protocolize this/another design or focus on optimizing the current program via existing levers.*
*below proposal shared from cryptecon.eth*
_____________________________
### Problem Statement
Since last year, there has been a growing divide in the Nouns DAO community between those who see Nouns as collectibles with voting rights and those who see them as arbitrage opportunities. Several measures have been taken to address the growing number of arbitrageurs holding Nouns, including initiatives such as [burning](https://w.mirror.xyz/AmHOzH-FQZVO3IhGXHSvCRxRSf2MO6VCZdmMwNEIyKE) [and](https://mirror.xyz/verbsteam.eth/W4gaOrp6NC6jopc6vGsGuhz3o4ej0G_0TFhBlcLed94) [setting](https://nouns.wtf/vote/384) [thresholds](https://nouns.wtf/vote/439). Raising the threshold did not solve the problem. The disparity has sparked extensive debate within the community. Arbers aim to predict the book value of NFTs at the time of the next fork and buy them at auction for less to ensure a profit. This strategy distracts from the real demand for nouns, pushing their valuation toward a strictly financial viewpoint and overshadowing their communal and cultural value.
### Proposal Overview
We propose to commission a focused research project to explore possible alternative exit schemes specifically designed to incorporate the uniqueness of NFTs planning to exit a DAO. This project aims to investigate different models (such as compensation based on contributed Ether) to minimize the arbitrage opportunities that distort the Nouns ecosystem. By incorporating additional factors into the treasury allocation formula, the aim is to develop a more equitable valuation mechanism that aligns with genuine demand for individual NFTs.
### Research Objectives:
* Specify the exit scheme based on contributed ETH and additional ideas brought forth by community members and Cryptecon.
* Conduct a comparative analysis of exit mechanics' incentives and economic resilience to determine which will attract more valuable bidders for the Nouns DAO.
### Menu Offer
The research project consists of the following two Work Streams:
* **Work Stream 1: Full Specification of Exit Schemes**: We start by fully specifying the exit scheme based on contributed ETH and other mechanics proposed by the community. Additionally, we explore and propose alternative exit schemes, focusing on incentive compatibility and tractability. This specification will present a clear path to implement an alternative exit scheme if the analysis is favorable.
* **Work Stream 2: In-depth Comparative Analysis and Scheme Evaluation**: This work stream examines the incentive structures and economic resilience of different exit mechanisms to determine their impact on auction engagement, focusing on attracting value-enhancing bidders to the Nouns ecosystem. We use advanced economic modeling and agent-based simulations to identify schemes that promote robust participation.
* Using **economic modeling** and game theory, we assess how various mechanisms influence the behavior of Noun bidders. The objective is identifying which exit scheme optimizes bidder contribution, enhancing ecosystem value. This model aims to unravel agents' interactions within the Nouns ecosystem, providing actionable insights into economic behaviors under various mechanisms.
* We employ an **agent-based simulation** to evaluate the performance of exit strategies under historical and hypothetical market conditions. This involves assessing price responses to market volatilities and identifying potential arbitrage risks. We perform a sequence of robustness tests using historical data to observe how these schemes would have historically performed. Additionally, hypothetical market conditions are put to the test. We evaluate the resulting prices of each exit scheme, scrutinizing how they respond to market volatilities, such as substantial fluctuations in ETH value. The objective is to surface any potential weaknesses and strengths in the schemes, ensuring they can mitigate risks associated with arbitrage opportunities.
### Costs and Duration
The project spans nine weeks and will incur a total cost of USDC 58,000. The USDC funds will be transferred daily throughout the duration of the project.
### Proposed Research Group
[Cryptecon](https://cryptecon.org/home.html) brings a deep academic background in cryptoeconomics and extensive experience in designing and auditing protocols. Their game theory and ecosystem simulation expertise are critical to analyzing and optimizing participant behavior and systemic resilience within the Nouns ecosystem. Their track record makes us an ideal partner. Cryptecon's approach to solving complex decentralized system challenges aligns with Nouns DAO's vision for sustainable growth and innovation.
### Past Relevant Projects (more on [cryptecon.org](https://[cry](https://cryptecon.org/home.html)))
- **[Synthetix](https://synthetix.io/)**: We supported the team in the design phase of their future contract project, using simulation and game-theoretic analysis.
- **[Polkadex](https://polkadex.trade/)**: We helped during the design phase of the cryptocurrency exchange, designing the token economics and the automated market maker.
- **[Pact.fi](https://www.pact.fi/)**: Support designing efficient incentive mechanisms and setting a fair price for the exchange's assets.
- **[Folks Finance](https://folks.finance/)**: Long-time partner. We helped set up their lending platform with simulations for parameter setting and game-theoretic analysis.
_______________________________
% Exit properties:
-Arbitrage-free alternative to current design (likely ends the anon bidding era)
-durable layer of protection from contentious proposals in any context (due to superior compatibility with low forking thresholds), substantively reducing dependency on veto
-gives capital a way to gain exposure & exert influence on the DAO other than via vote-hoarding. the point is not that the incentive to accumulate votes is eliminated, but that if we decide to discourage it through other novel mechanisms we should still be able to raise funds effectively via Noun sales.
-opens Nouns up to a new range of participants, such as non-profits, for whom periodic treasury drain may generally make Nouns investment/contribution a non-starter
-can accommodate rapid demand expansion (ie scaling) much more fluidly than now; currently entering at large premiums to BV badly exposes the buyer (and Nouns itself) to strong dao-wide forking incentives in the event of a sudden price contraction, which will always to some degree constrain the what one may pay to join. Under % exit there is no upper bound.
(this summary is my take which cryptecon is not incentivized to echo. they will provide a neutral analysis which may undermine some or all of the above. thank you!)
heal-noun-oclock-full-spec-and-economic-audit-of--exit-an-arbitrage-free-forking-mechanic
# Spec and Economic Audit of Alternate Forking Mechanics (incl % Exit)
#
*TLDR; spec and review % exit (value determined by auction price +/- pro-rata treasury asset flux) & other ideas if brought forth by the group and do a thorough economic audit as well as an analysis of status quo (book-value) exit for comparison.
-$48k streamed + 1 Nil Moon Noun
-est time to complete is 9 weeks*
*my hope is this document can help relieve some of the open tension surrounding the adoption of V3, providing a grounded perspective to help us decide whether we move towards protocolization of an alternate design or focus on optimizing the current program via existing levers.*
*below proposal shared from cryptecon.eth*
### Problem Statement
Since last year, there has been a growing divide in the Nouns DAO community between those who see Nouns as collectibles with voting rights and those who see them as arbitrage opportunities. Several measures have been taken to address the growing number of arbitrageurs holding Nouns, including initiatives such as [burning](https://w.mirror.xyz/AmHOzH-FQZVO3IhGXHSvCRxRSf2MO6VCZdmMwNEIyKE) [and](https://mirror.xyz/verbsteam.eth/W4gaOrp6NC6jopc6vGsGuhz3o4ej0G_0TFhBlcLed94) [setting](https://nouns.wtf/vote/384) [thresholds](https://nouns.wtf/vote/439). Raising the threshold did not solve the problem. The disparity has sparked extensive debate within the community. Arbers aim to predict the book value of NFTs at the time of the next fork and buy them at auction for less to ensure a profit. This strategy distracts from the real demand for nouns, pushing their valuation toward a strictly financial viewpoint and overshadowing their communal and cultural value.
### Proposal Overview
We propose to commission a focused research project to explore possible alternative exit schemes specifically designed to incorporate the uniqueness of NFTs planning to exit a DAO. This project aims to investigate different models (such as compensation based on contributed Ether) to minimize the arbitrage opportunities that distort the Nouns ecosystem. By incorporating additional factors into the treasury allocation formula, the aim is to develop a more equitable valuation mechanism that aligns with genuine demand for individual NFTs.
### Research Objectives:
* Specify the exit scheme based on contributed ETH and additional ideas brought forth by community members and Cryptecon.
* Conduct a comparative analysis of exit mechanics' incentives and economic resilience to determine which will attract more valuable bidders for the Nouns DAO.
### Menu Offer
The research project consists of the following two Work Streams:
* **Work Stream 1: Full Specification of Exit Schemes**: We start by fully specifying the exit scheme based on contributed ETH and other mechanics proposed by the community. Additionally, we explore and propose alternative exit schemes, focusing on incentive compatibility and tractability. This specification will present a clear path to implement an alternative exit scheme if the analysis is favorable.
* **Work Stream 2: In-depth Comparative Analysis and Scheme Evaluation**: This work stream examines the incentive structures and economic resilience of different exit mechanisms to determine their impact on auction engagement, focusing on attracting value-enhancing bidders to the Nouns ecosystem. We use advanced economic modeling and agent-based simulations to identify schemes that promote robust participation.
* Using **economic modeling** and game theory, we assess how various mechanisms influence the behavior of Noun bidders. The objective is identifying which exit scheme optimizes bidder contribution, enhancing ecosystem value. This model aims to unravel agents' interactions within the Nouns ecosystem, providing actionable insights into economic behaviors under various mechanisms.
* We employ an **agent-based simulation** to evaluate the performance of exit strategies under historical and hypothetical market conditions. This involves assessing price responses to market volatilities and identifying potential arbitrage risks. We perform a sequence of robustness tests using historical data to observe how these schemes would have historically performed. Additionally, hypothetical market conditions are put to the test. We evaluate the resulting prices of each exit scheme, scrutinizing how they respond to market volatilities, such as substantial fluctuations in ETH value. The objective is to surface any potential weaknesses and strengths in the schemes, ensuring they can mitigate risks associated with arbitrage opportunities.
### Costs and Duration
The project spans nine weeks and will incur a total cost of USDC 48,000 + one Noun. The USDC funds will be transferred daily throughout the duration of the project, and the Noun will be transferred in the first weeks of the project.
### Proposed Research Group
[Cryptecon](https://cryptecon.org/home.html) brings a deep academic background in cryptoeconomics and extensive experience in designing and auditing protocols. Their game theory and ecosystem simulation expertise are critical to analyzing and optimizing participant behavior and systemic resilience within the Nouns ecosystem. Their track record makes us an ideal partner. Cryptecon's approach to solving complex decentralized system challenges aligns with Nouns DAO's vision for sustainable growth and innovation.
### Past Relevant Projects (more on [cryptecon.org]([cry](https://cryptecon.org/home.html)))
- **[Synthetix](https://synthetix.io/)**: We supported the team in the design phase of their future contract project, using simulation and game-theoretic analysis.
- **[Polkadex](https://polkadex.trade/)**: We helped during the design phase of the cryptocurrency exchange, designing the token economics and the automated market maker.
- **[Pact.fi](https://www.pact.fi/)**: Support designing efficient incentive mechanisms and setting a fair price for the exchange's assets.
- **[Folks Finance](https://folks.finance/)**: Long-time partner. We helped set up their lending platform with simulations for parameter setting and game-theoretic analysis.
didnt think i had so much to say about this until i read mikegood vwr. immediately clear to me he has the most nounish take.
i think coral's point about brand referencing (& cc0 licensing as pre-requisite mentioend by 41) make sense as reasons for an against vote, but unsure if downvoting for aesthetic reasons is healthy culturally, in a dynamic quorum governance context. is brett attacking the protocol with 90's vibes?
an alternative would be to abstain and see if the head has enough positive support to make it through (could increase quorum requirement if not satisfied with current limit or have a different dynamic quorum requirement over Noundry submissions). feels odd to say hell no to someone's earnest self-expression.. maybe we can move towards a more optimistic governance norm in future.
just at the practical level imagine if we were faced with 1000 separate trait props/ easier to simply not vote and have a higher threshold and possibly a bit less discouraging idk
# Spec and Economic Audit of Alternate Forking Mechanics (incl % Exit)
#
*TLDR; spec and review % exit (value determined by auction price +/- pro-rata treasury asset flux) & other ideas if brought forth by the group and do a thorough economic audit as well as an analysis of status quo (book-value) exit for comparison.
-$48k streamed + 1 Nil Moon Noun
-est time to complete is 9 weeks*
*my hope is this document can help relieve some of the open tension surrounding the adoption of V3, providing a grounded perspective to help us decide whether we move towards protocolization of an alternate design or focus on optimizing the current program via existing levers.*
*below proposal shared from cryptecon.eth*
### Problem Statement
Since last year, there has been a growing divide in the Nouns DAO community between those who see Nouns as collectibles with voting rights and those who see them as arbitrage opportunities. Several measures have been taken to address the growing number of arbitrageurs holding Nouns, including initiatives such as [burning](https://w.mirror.xyz/AmHOzH-FQZVO3IhGXHSvCRxRSf2MO6VCZdmMwNEIyKE) [and](https://mirror.xyz/verbsteam.eth/W4gaOrp6NC6jopc6vGsGuhz3o4ej0G_0TFhBlcLed94) [setting](https://nouns.wtf/vote/384) [thresholds](https://nouns.wtf/vote/439). Raising the threshold did not solve the problem. The disparity has sparked extensive debate within the community. Arbers aim to predict the book value of NFTs at the time of the next fork and buy them at auction for less to ensure a profit. This strategy distracts from the real demand for nouns, pushing their valuation toward a strictly financial viewpoint and overshadowing their communal and cultural value.
### Proposal Overview
We propose to commission a focused research project to explore possible alternative exit schemes specifically designed to incorporate the uniqueness of NFTs planning to exit a DAO. This project aims to investigate different models (such as compensation based on contributed Ether) to minimize the arbitrage opportunities that distort the Nouns ecosystem. By incorporating additional factors into the treasury allocation formula, the aim is to develop a more equitable valuation mechanism that aligns with genuine demand for individual NFTs.
### Research Objectives:
* Specify the exit scheme based on contributed ETH and additional ideas brought forth by community members and Cryptecon.
* Conduct a comparative analysis of exit mechanics' incentives and economic resilience to determine which will attract more valuable bidders for the Nouns DAO.
### Menu Offer
The research project consists of the following two Work Streams:
* **Work Stream 1: Full Specification of Exit Schemes**: We start by fully specifying the exit scheme based on contributed ETH and other mechanics proposed by the community. Additionally, we explore and propose alternative exit schemes, focusing on incentive compatibility and tractability. This specification will present a clear path to implement an alternative exit scheme if the analysis is favorable.
* **Work Stream 2: In-depth Comparative Analysis and Scheme Evaluation**: This work stream examines the incentive structures and economic resilience of different exit mechanisms to determine their impact on auction engagement, focusing on attracting value-enhancing bidders to the Nouns ecosystem. We use advanced economic modeling and agent-based simulations to identify schemes that promote robust participation.
* Using **economic modeling** and game theory, we assess how various mechanisms influence the behavior of Noun bidders. The objective is identifying which exit scheme optimizes bidder contribution, enhancing ecosystem value. This model aims to unravel agents' interactions within the Nouns ecosystem, providing actionable insights into economic behaviors under various mechanisms.
* We employ an **agent-based simulation** to evaluate the performance of exit strategies under historical and hypothetical market conditions. This involves assessing price responses to market volatilities and identifying potential arbitrage risks. We perform a sequence of robustness tests using historical data to observe how these schemes would have historically performed. Additionally, hypothetical market conditions are put to the test. We evaluate the resulting prices of each exit scheme, scrutinizing how they respond to market volatilities, such as substantial fluctuations in ETH value. The objective is to surface any potential weaknesses and strengths in the schemes, ensuring they can mitigate risks associated with arbitrage opportunities.
### Costs and Duration
The project spans nine weeks and will incur a total cost of USDC 48,000 + one Noun. The USDC funds will be transferred daily throughout the duration of the project, and the Noun will be transferred in the first weeks of the project.
### Proposed Research Group
[Cryptecon](https://cryptecon.org/home.html) brings a deep academic background in cryptoeconomics and extensive experience in designing and auditing protocols. Their game theory and ecosystem simulation expertise are critical to analyzing and optimizing participant behavior and systemic resilience within the Nouns ecosystem. Their track record makes us an ideal partner. Cryptecon's approach to solving complex decentralized system challenges aligns with Nouns DAO's vision for sustainable growth and innovation.
### Past Relevant Projects (more on [cryptecon.org]([cry](https://cryptecon.org/home.html)))
- **[Synthetix](https://synthetix.io/)**: We supported the team in the design phase of their future contract project, using simulation and game-theoretic analysis.
- **[Polkadex](https://polkadex.trade/)**: We helped during the design phase of the cryptocurrency exchange, designing the token economics and the automated market maker.
- **[Pact.fi](https://www.pact.fi/)**: Support designing efficient incentive mechanisms and setting a fair price for the exchange's assets.
- **[Folks Finance](https://folks.finance/)**: Long-time partner. We helped set up their lending platform with simulations for parameter setting and game-theoretic analysis.
exploring-novel-treasury-allocation-mechanisms-for-nouns
# Spec and Economic Audit of Alternate Forking Mechanics (incl % Exit)
#
*below proposal is from cryptecon.eth.*
*TLDR; spec and review % exit (value determined by auction price +/- pro-rata treasury asset flux) & other ideas if brought forth by the group and do a thorough economic audit as well as an analysis of status quo (book-value) exit for comparison.
$48k streamed + 1 Nil Moon Noun
est time to complete is 9 weeks*
### Problem Statement
Since last year, there has been a growing divide in the Nouns DAO community between those who see Nouns as collectibles with voting rights and those who see them as arbitrage opportunities. Several measures have been taken to address the growing number of arbitrageurs holding Nouns, including initiatives such as [burning](https://w.mirror.xyz/AmHOzH-FQZVO3IhGXHSvCRxRSf2MO6VCZdmMwNEIyKE) [and](https://mirror.xyz/verbsteam.eth/W4gaOrp6NC6jopc6vGsGuhz3o4ej0G_0TFhBlcLed94) [setting](https://nouns.wtf/vote/384) [thresholds](https://nouns.wtf/vote/439). Raising the threshold did not solve the problem. The disparity has sparked extensive debate within the community. Arbers aim to predict the book value of NFTs at the time of the next fork and buy them at auction for less to ensure a profit. This strategy distracts from the real demand for nouns, pushing their valuation toward a strictly financial viewpoint and overshadowing their communal and cultural value.
### Proposal Overview
We propose to commission a focused research project to explore possible alternative exit schemes specifically designed to incorporate the uniqueness of NFTs planning to exit a DAO. This project aims to investigate different models (such as compensation based on contributed Ether) to minimize the arbitrage opportunities that distort the Nouns ecosystem. By incorporating additional factors into the treasury allocation formula, the aim is to develop a more equitable valuation mechanism that aligns with genuine demand for individual NFTs.
### Research Objectives:
* Specify the exit scheme based on contributed ETH and additional ideas brought forth by community members and Cryptecon.
* Conduct a comparative analysis of exit mechanics' incentives and economic resilience to determine which will attract more valuable bidders for the Nouns DAO.
### Menu Offer
The research project consists of the following two Work Streams:
* **Work Stream 1: Full Specification of Exit Schemes**: We start by fully specifying the exit scheme based on contributed ETH and other mechanics proposed by the community. Additionally, we explore and propose alternative exit schemes, focusing on incentive compatibility and tractability. This specification will present a clear path to implement an alternative exit scheme if the analysis is favorable.
* **Work Stream 2: In-depth Comparative Analysis and Scheme Evaluation**: This work stream examines the incentive structures and economic resilience of different exit mechanisms to determine their impact on auction engagement, focusing on attracting value-enhancing bidders to the Nouns ecosystem. We use advanced economic modeling and agent-based simulations to identify schemes that promote robust participation.
* Using **economic modeling** and game theory, we assess how various mechanisms influence the behavior of Noun bidders. The objective is identifying which exit scheme optimizes bidder contribution, enhancing ecosystem value. This model aims to unravel agents' interactions within the Nouns ecosystem, providing actionable insights into economic behaviors under various mechanisms.
* We employ an **agent-based simulation** to evaluate the performance of exit strategies under historical and hypothetical market conditions. This involves assessing price responses to market volatilities and identifying potential arbitrage risks. We perform a sequence of robustness tests using historical data to observe how these schemes would have historically performed. Additionally, hypothetical market conditions are put to the test. We evaluate the resulting prices of each exit scheme, scrutinizing how they respond to market volatilities, such as substantial fluctuations in ETH value. The objective is to surface any potential weaknesses and strengths in the schemes, ensuring they can mitigate risks associated with arbitrage opportunities.
### Costs and Duration
The project spans nine weeks and will incur a total cost of USDC 48,000 + one Noun. The USDC funds will be transferred daily throughout the duration of the project, and the Noun will be transferred in the first weeks of the project.
### Proposed Research Group
[Cryptecon](https://cryptecon.org/home.html) brings a deep academic background in cryptoeconomics and extensive experience in designing and auditing protocols. Their game theory and ecosystem simulation expertise are critical to analyzing and optimizing participant behavior and systemic resilience within the Nouns ecosystem. Their track record makes us an ideal partner. Cryptecon's approach to solving complex decentralized system challenges aligns with Nouns DAO's vision for sustainable growth and innovation.
### Past Relevant Projects (more on [cryptecon.org]([cry](https://cryptecon.org/home.html)))
- **[Synthetix](https://synthetix.io/)**: We supported the team in the design phase of their future contract project, using simulation and game-theoretic analysis.
- **[Polkadex](https://polkadex.trade/)**: We helped during the design phase of the cryptocurrency exchange, designing the token economics and the automated market maker.
- **[Pact.fi](https://www.pact.fi/)**: Support designing efficient incentive mechanisms and setting a fair price for the exchange's assets.
- **[Folks Finance](https://folks.finance/)**: Long-time partner. We helped set up their lending platform with simulations for parameter setting and game-theoretic analysis.
exploring-novel-treasury-allocation-mechanisms-for-nouns
# Spec and Economic Audit of Alternate Forking Mechanics (incl % Exit)
*[despite the (assumed) third-party character of the proposal I floated the idea that they take part of their compensation via a Noun & they agreed at the indicated split. Personally think it might benefit us to have more dedicated economic thinkers w fresh eyes & skin in the game, but this piece can ofc be changed if it's preferred to keep the relationship arms-length. W/o the Noun would be $58k USDC streamed. Please give feedback if any preference before prop moves on-chain.]*
*below proposal is from cryptecon.eth.*
*TLDR; spec and review % exit (value determined by auction price +/- pro-rata treasury asset flux) & other ideas if brought forth by the group and do a thorough economic audit as well as an analysis of status quo (book-value) exit for comparison.
est time to complete is 9 weeks*
### Problem Statement
Since last year, there has been a growing divide in the Nouns DAO community between those who see Nouns as collectibles with voting rights and those who see them as arbitrage opportunities. Several measures have been taken to address the growing number of arbitrageurs holding Nouns, including initiatives such as [burning](https://w.mirror.xyz/AmHOzH-FQZVO3IhGXHSvCRxRSf2MO6VCZdmMwNEIyKE) [and](https://mirror.xyz/verbsteam.eth/W4gaOrp6NC6jopc6vGsGuhz3o4ej0G_0TFhBlcLed94) [setting](https://nouns.wtf/vote/384) [thresholds](https://nouns.wtf/vote/439). Raising the threshold did not solve the problem. The disparity has sparked extensive debate within the community. Arbers aim to predict the book value of NFTs at the time of the next fork and buy them at auction for less to ensure a profit. This strategy distracts from the real demand for nouns, pushing their valuation toward a strictly financial viewpoint and overshadowing their communal and cultural value.
### Proposal Overview
We propose to commission a focused research project to explore possible alternative exit schemes specifically designed to incorporate the uniqueness of NFTs planning to exit a DAO. This project aims to investigate different models (such as compensation based on contributed Ether) to minimize the arbitrage opportunities that distort the Nouns ecosystem. By incorporating additional factors into the treasury allocation formula, the aim is to develop a more equitable valuation mechanism that aligns with genuine demand for individual NFTs.
### Research Objectives:
* Specify the exit scheme based on contributed ETH and additional ideas brought forth by community members and Cryptecon.
* Conduct a comparative analysis of exit mechanics' incentives and economic resilience to determine which will attract more valuable bidders for the Nouns DAO.
### Menu Offer
The research project consists of the following two Work Streams:
* **Work Stream 1: Full Specification of Exit Schemes**: We start by fully specifying the exit scheme based on contributed ETH and other mechanics proposed by the community. Additionally, we explore and propose alternative exit schemes, focusing on incentive compatibility and tractability. This specification will present a clear path to implement an alternative exit scheme if the analysis is favorable.
* **Work Stream 2: In-depth Comparative Analysis and Scheme Evaluation**: This work stream examines the incentive structures and economic resilience of different exit mechanisms to determine their impact on auction engagement, focusing on attracting value-enhancing bidders to the Nouns ecosystem. We use advanced economic modeling and agent-based simulations to identify schemes that promote robust participation.
* Using **economic modeling** and game theory, we assess how various mechanisms influence the behavior of Noun bidders. The objective is identifying which exit scheme optimizes bidder contribution, enhancing ecosystem value. This model aims to unravel agents' interactions within the Nouns ecosystem, providing actionable insights into economic behaviors under various mechanisms.
* We employ an **agent-based simulation** to evaluate the performance of exit strategies under historical and hypothetical market conditions. This involves assessing price responses to market volatilities and identifying potential arbitrage risks. We perform a sequence of robustness tests using historical data to observe how these schemes would have historically performed. Additionally, hypothetical market conditions are put to the test. We evaluate the resulting prices of each exit scheme, scrutinizing how they respond to market volatilities, such as substantial fluctuations in ETH value. The objective is to surface any potential weaknesses and strengths in the schemes, ensuring they can mitigate risks associated with arbitrage opportunities.
### Costs and Duration
The project spans nine weeks and will incur a total cost of USDC 48,000 + one Noun. The USDC funds will be transferred daily throughout the duration of the project, and the Noun will be transferred in the first weeks of the project.
### Proposed Research Group
[Cryptecon](https://cryptecon.org/home.html) brings a deep academic background in cryptoeconomics and extensive experience in designing and auditing protocols. Their game theory and ecosystem simulation expertise are critical to analyzing and optimizing participant behavior and systemic resilience within the Nouns ecosystem. Their track record makes us an ideal partner. Cryptecon's approach to solving complex decentralized system challenges aligns with Nouns DAO's vision for sustainable growth and innovation.
### Past Relevant Projects (more on [cryptecon.org]([cry](https://cryptecon.org/home.html)))
- **[Synthetix](https://synthetix.io/)**: We supported the team in the design phase of their future contract project, using simulation and game-theoretic analysis.
- **[Polkadex](https://polkadex.trade/)**: We helped during the design phase of the cryptocurrency exchange, designing the token economics and the automated market maker.
- **[Pact.fi](https://www.pact.fi/)**: Support designing efficient incentive mechanisms and setting a fair price for the exchange's assets.
- **[Folks Finance](https://folks.finance/)**: Long-time partner. We helped set up their lending platform with simulations for parameter setting and game-theoretic analysis.
exploring-novel-treasury-allocation-mechanisms-for-nouns
# Spec and Economic Audit of Alternate Forking Mechanics (incl % Exit)
*[despite the (assumed) independent-contractor character of the proposal I floated the idea that they take part of their compensation via a Noun & they agreed at the indicated split. Personally think it might benefit us to have more dedicated economic thinkers w fresh eyes & skin in the game, but this piece can ofc be changed if it's preferred to keep the relationship arms-length. W/o the Noun would be $58k USDC streamed. Please give feedback if any preference before prop moves on-chain.]*
*below proposal is from cryptecon.eth.*
*TLDR; spec and review % exit (value determined by auction price +/- pro-rata treasury asset flux) & other ideas if brought forth by the group and do a thorough economic audit as well as an analysis of status quo (book-value) exit for comparison.
est time to complete is 9 weeks*
### Problem Statement
Since last year, there has been a growing divide in the Nouns DAO community between those who see Nouns as collectibles with voting rights and those who see them as arbitrage opportunities. Several measures have been taken to address the growing number of arbitrageurs holding Nouns, including initiatives such as [burning](https://w.mirror.xyz/AmHOzH-FQZVO3IhGXHSvCRxRSf2MO6VCZdmMwNEIyKE) [and](https://mirror.xyz/verbsteam.eth/W4gaOrp6NC6jopc6vGsGuhz3o4ej0G_0TFhBlcLed94) [setting](https://nouns.wtf/vote/384) [thresholds](https://nouns.wtf/vote/439). Raising the threshold did not solve the problem. The disparity has sparked extensive debate within the community. Arbers aim to predict the book value of NFTs at the time of the next fork and buy them at auction for less to ensure a profit. This strategy distracts from the real demand for nouns, pushing their valuation toward a strictly financial viewpoint and overshadowing their communal and cultural value.
### Proposal Overview
We propose to commission a focused research project to explore possible alternative exit schemes specifically designed to incorporate the uniqueness of NFTs planning to exit a DAO. This project aims to investigate different models (such as compensation based on contributed Ether) to minimize the arbitrage opportunities that distort the Nouns ecosystem. By incorporating additional factors into the treasury allocation formula, the aim is to develop a more equitable valuation mechanism that aligns with genuine demand for individual NFTs.
### Research Objectives:
* Specify the exit scheme based on contributed ETH and additional ideas brought forth by community members and Cryptecon.
* Conduct a comparative analysis of exit mechanics' incentives and economic resilience to determine which will attract more valuable bidders for the Nouns DAO.
### Menu Offer
The research project consists of the following two Work Streams:
* **Work Stream 1: Full Specification of Exit Schemes**: We start by fully specifying the exit scheme based on contributed ETH and other mechanics proposed by the community. Additionally, we explore and propose alternative exit schemes, focusing on incentive compatibility and tractability. This specification will present a clear path to implement an alternative exit scheme if the analysis is favorable.
* **Work Stream 2: In-depth Comparative Analysis and Scheme Evaluation**: This work stream examines the incentive structures and economic resilience of different exit mechanisms to determine their impact on auction engagement, focusing on attracting value-enhancing bidders to the Nouns ecosystem. We use advanced economic modeling and agent-based simulations to identify schemes that promote robust participation.
* Using **economic modeling** and game theory, we assess how various mechanisms influence the behavior of Noun bidders. The objective is identifying which exit scheme optimizes bidder contribution, enhancing ecosystem value. This model aims to unravel agents' interactions within the Nouns ecosystem, providing actionable insights into economic behaviors under various mechanisms.
* We employ an **agent-based simulation** to evaluate the performance of exit strategies under historical and hypothetical market conditions. This involves assessing price responses to market volatilities and identifying potential arbitrage risks. We perform a sequence of robustness tests using historical data to observe how these schemes would have historically performed. Additionally, hypothetical market conditions are put to the test. We evaluate the resulting prices of each exit scheme, scrutinizing how they respond to market volatilities, such as substantial fluctuations in ETH value. The objective is to surface any potential weaknesses and strengths in the schemes, ensuring they can mitigate risks associated with arbitrage opportunities.
### Costs and Duration
The project spans nine weeks and will incur a total cost of USDC 48,000 + one Noun. The USDC funds will be transferred daily throughout the duration of the project, and the Noun will be transferred in the first weeks of the project.
### Proposed Research Group
[Cryptecon](https://cryptecon.org/home.html) brings a deep academic background in cryptoeconomics and extensive experience in designing and auditing protocols. Their game theory and ecosystem simulation expertise are critical to analyzing and optimizing participant behavior and systemic resilience within the Nouns ecosystem. Their track record makes us an ideal partner. Cryptecon's approach to solving complex decentralized system challenges aligns with Nouns DAO's vision for sustainable growth and innovation.
### Past Relevant Projects (more on [cryptecon.org]([cry](https://cryptecon.org/home.html)))
- **[Synthetix](https://synthetix.io/)**: We supported the team in the design phase of their future contract project, using simulation and game-theoretic analysis.
- **[Polkadex](https://polkadex.trade/)**: We helped during the design phase of the cryptocurrency exchange, designing the token economics and the automated market maker.
- **[Pact.fi](https://www.pact.fi/)**: Support designing efficient incentive mechanisms and setting a fair price for the exchange's assets.
- **[Folks Finance](https://folks.finance/)**: Long-time partner. We helped set up their lending platform with simulations for parameter setting and game-theoretic analysis.
exploring-novel-treasury-allocation-mechanisms-for-nouns
# Comparative Economic Audit of Various Exit/Forking Mechanics
*shared from folks @ cryptecon.org*
### Problem Statement
Since last year, there has been a growing divide in the Nouns DAO community between those who see Nouns as collectibles with voting rights and those who see them as arbitrage opportunities. Several measures have been taken to address the growing number of arbitrageurs holding Nouns, including initiatives such as [burning](https://w.mirror.xyz/AmHOzH-FQZVO3IhGXHSvCRxRSf2MO6VCZdmMwNEIyKE) [and](https://mirror.xyz/verbsteam.eth/W4gaOrp6NC6jopc6vGsGuhz3o4ej0G_0TFhBlcLed94) [setting](https://nouns.wtf/vote/384) [thresholds](https://nouns.wtf/vote/439). The disparity has sparked extensive debate within the community. Arbers aim to predict the book value of NFTs at the time of the next fork and buy them at auction for less to ensure a profit. This strategy distracts from the real demand for nouns, pushing their valuation toward a strictly financial viewpoint and overshadowing their communal and cultural value.
### Proposal Overview
We propose to commission a focused research project to explore possible alternative exit schemes specifically designed to incorporate the uniqueness of NFTs planning to exit a DAO. This project aims to investigate different models (such as compensation based on contributed Ether) to minimize the arbitrage opportunities that distort the Nouns ecosystem. By incorporating additional factors into the treasury allocation formula, the aim is to develop a more equitable valuation mechanism that aligns with genuine demand for individual NFTs.
### Research Objectives:
* Design possible exit schemes that reduce arbitrage opportunities.
* Evaluate the different mechanisms.
### Menu Offer
Cryptecon can offer economic research in various depths. As such, the research proposal consists of the following two modules that can be combined freely:
* **Module 1: Comparison of different exit schemes** (USDC 23'000): We start with a critical review and comparative analysis of varying exit schemes, such as 'book value' and 'contributed eth.' Leveraging our expertise in game theory, we design an economic model to discern and evaluate the incentive structures that drive Noun holders and potential buyers within your unique market environment. This model aims to unravel agents' interactions within the Nouns ecosystem, providing actionable insights into economic behaviors under various mechanisms. The duration of this module is three weeks.
* **Module 2: Simulation and Performance Analysis** (USDC 35'000): In Module 2, we shift our focus from theoretical design to empirical assessment. Here, we use an agent-based simulation to test the exit schemes formulated in Module 1. Using historical data, we perform a sequence of robustness tests to observe how these schemes would have historically performed. Additionally, hypothetical market conditions are put to the test. We evaluate the resulting prices of each exit scheme, scrutinizing how they respond to market volatilities, such as substantial fluctuations in ETH value. The objective is to surface any potential weaknesses and strengths in the schemes, ensuring they can mitigate risks associated with arbitrage opportunities. This proactive approach allows us to anticipate the effects of various market conditions on the Nouns DAO, including extreme risk scenarios. This module will take six weeks.
### Proposed Research Group
[Cryptecon](https://cryptecon.org/home.html) brings a deep academic background in cryptoeconomics and extensive experience in designing and auditing protocols. Their game theory and ecosystem simulation expertise are critical to analyzing and optimizing participant behavior and systemic resilience within the Nouns ecosystem. Their track record makes us an ideal partner. Cryptecon's approach to solving complex decentralized system challenges aligns with Nouns DAO's vision for sustainable growth and innovation.
### Past Relevant Projects (more on [cryptecon.org]([cry](https://cryptecon.org/home.html)))
- **[Synthetix](https://synthetix.io/)**: We supported the team in the design phase of their future contract project, using simulation and game-theoretic analysis.
- **[Polkadex](https://polkadex.trade/)**: We helped during the design phase of the cryptocurrency exchange, designing the token economics and the automated market maker.
- **Pact.fi**. Support designing efficient incentive mechanisms and setting a fair price for the exchange's assets.
- **[Folks Finance](https://folks.finance/)**: Long-time partner. We helped set up their lending platform with simulations for parameter setting and game-theoretic analysis.
exploring-novel-treasury-allocation-mechanisms-for-nouns
have thought about it more and have softened somewhat;
while certainly not strictly a reserve, it *is* reserve-y in spirit (the aim in both is to control dilution as a function of demand).
I understand the motivation, & in some sense it looks logical to say: more eyeballs, more members
a possible issue with this is that price is a poor proxy for eyeballs. Look at Nouns, where attention is likely near an all-time high (great time to onboard) but organic demand remains in freefall.
A (potentially) beautiful property of a forced static issuance rate is that it can produce progressive demographic transition which is an elegant way to resolve the current group's inability to generate consistent demand. Part of the (needed) tension is that it may be uncomfortable for the current holder base, such that if given a border wall with gate and keys, they may well choose to use it. Is definitely true that it does not need to be every dao's objective to procedurally scale & decentralize ad inf., but I do wonder about the upside in using a nounish dao if trying to govern in a more controlled, traditional way.
It's also worth noting that this mechanic will provide no respite from v3 nouns (fork) if your aim is to interweave that too. There is no way to meaningfully preserve this sort of exit and expect to engineer a circumstance where high-signal members join regularly via auction.
So,
While seems like a bit of an arbitrary and potentially counterproductive constraint to me, I appreciate the challenges involved in pivoting from the application approach (where cohort has maximal autonomy over issuance rate) to something with a degree of permissionless-ness. I admit I lack a lot of context on this particular group which seems to be having some good success so far, so if this is a mechanic everyone is excited about exploring then so be it.
pivoting signal to abstain; still think the issuance piece is hand-wavy but recognize it may not be really the center of what this prop is about
good luck!
personally think this prop needs to make a much stronger case for this issuance idea.
afaict its really a reserve price by other means/
can look at sharkdao and lilnouns as case studies of why this may not give the results you are hoping for .
while illiquidity is a thing, you may find that while trying to hold out for your 1eth buyer demand goes the other direction and you lose the .75eth buyers that maybe you later wish you hadn't frozen out. Nouns is also experiencing this since v3 exit is also a sort of reserve price..
to the extent the dao would be implicitly funding implementation of this i think i am a no. do love the UNA wrapper and the regional focus.. i'm just stuck on the issuance piece which i think is not conducive to growing a fledgling community
exploring-novel-treasury-allocation-mechanisms-for-nounsfwiw this audit may be directly actionable in that verbs have said they are open to working on alternate exit contracts if dao signals an urgent interest
i have no pre-existing/personal relationship with this team & a competing/redundant prop is very welcome
# Exploring Novel Treasury Allocation Mechanisms for Nouns
*shared from folks @ cryptecon.org*
### Problem Statement
Since last year, there has been a growing divide in the Nouns DAO community between those who see Nouns as collectibles with voting rights and those who see them as arbitrage opportunities. Several measures have been taken to address the growing number of arbitrageurs holding Nouns, including initiatives such as [burning](https://w.mirror.xyz/AmHOzH-FQZVO3IhGXHSvCRxRSf2MO6VCZdmMwNEIyKE) [and](https://mirror.xyz/verbsteam.eth/W4gaOrp6NC6jopc6vGsGuhz3o4ej0G_0TFhBlcLed94) [setting](https://nouns.wtf/vote/384) [thresholds](https://nouns.wtf/vote/439). The disparity has sparked extensive debate within the community. Arbers aim to predict the book value of NFTs at the time of the next fork and buy them at auction for less to ensure a profit. This strategy distracts from the real demand for nouns, pushing their valuation toward a strictly financial viewpoint and overshadowing their communal and cultural value.
### Proposal Overview
We propose to commission a focused research project to explore possible alternative exit schemes specifically designed to incorporate the uniqueness of NFTs planning to exit a DAO. This project aims to investigate different models (such as compensation based on contributed Ether) to minimize the arbitrage opportunities that distort the Nouns ecosystem. By incorporating additional factors into the treasury allocation formula, the aim is to develop a more equitable valuation mechanism that aligns with genuine demand for individual NFTs.
### Research Objectives:
* Design possible exit schemes that reduce arbitrage opportunities.
* Evaluate the different mechanisms.
### Menu Offer
Cryptecon can offer economic research in various depths. As such, the research proposal consists of the following two modules that can be combined freely:
* **Module 1: Comparison of different exit schemes** (USDC 23'000): We start with a critical review and comparative analysis of varying exit schemes, such as 'book value' and 'contributed eth.' Leveraging our expertise in game theory, we design an economic model to discern and evaluate the incentive structures that drive Noun holders and potential buyers within your unique market environment. This model aims to unravel agents' interactions within the Nouns ecosystem, providing actionable insights into economic behaviors under various mechanisms. The duration of this module is three weeks.
* **Module 2: Simulation and Performance Analysis** (USDC 35'000): In Module 2, we shift our focus from theoretical design to empirical assessment. Here, we use an agent-based simulation to test the exit schemes formulated in Module 1. Using historical data, we perform a sequence of robustness tests to observe how these schemes would have historically performed. Additionally, hypothetical market conditions are put to the test. We evaluate the resulting prices of each exit scheme, scrutinizing how they respond to market volatilities, such as substantial fluctuations in ETH value. The objective is to surface any potential weaknesses and strengths in the schemes, ensuring they can mitigate risks associated with arbitrage opportunities. This proactive approach allows us to anticipate the effects of various market conditions on the Nouns DAO, including extreme risk scenarios. This module will take six weeks.
### Proposed Research Group
[Cryptecon](https://cryptecon.org/home.html) brings a deep academic background in cryptoeconomics and extensive experience in designing and auditing protocols. Their game theory and ecosystem simulation expertise are critical to analyzing and optimizing participant behavior and systemic resilience within the Nouns ecosystem. Their track record makes us an ideal partner. Cryptecon's approach to solving complex decentralized system challenges aligns with Nouns DAO's vision for sustainable growth and innovation.
### Past Relevant Projects (more on [cryptecon.org]([cry](https://cryptecon.org/home.html)))
- **[Synthetix](https://synthetix.io/)**: We supported the team in the design phase of their future contract project, using simulation and game-theoretic analysis.
- **[Polkadex](https://polkadex.trade/)**: We helped during the design phase of the cryptocurrency exchange, designing the token economics and the automated market maker.
- **Pact.fi**. Support designing efficient incentive mechanisms and setting a fair price for the exchange's assets.
- **[Folks Finance](https://folks.finance/)**: Long-time partner. We helped set up their lending platform with simulations for parameter setting and game-theoretic analysis.
exploring-novel-treasury-allocation-mechanisms-for-nouns
i LOVE retro. prop 63 was my attempt to do this in as trustless, open a way as conceivable and we tried to include literally anyone that cared about nouns as possible recipients *and* voters. however it does frustrate me that we are still resorting to multisigs and that a perpetual fully onchain retro funding engine *does not exist.* If it did I would push to activate it with as much dao eth as possible, ramping up to around 80-90% of our annual capital raise. i continue to feel this is the ideal funding strategy for Nouns; maximally decentralized/open and so the most conducive to unbounded scale. SO the model is totally up my alley and I agree frictionless/social ux is important ...but the off-chain stuff really is a drag I know the proposers are not indifferent to this, but I do think the prop should address how this particular attempt can be made admin-less (and really scale alignment-wise if it ultimately relies on farcaster sybil resistance). thusss Would be much more excited about a prop to fund building coordinape-like functionality (ie allocation proportional to votes received) -but with fully trustless voter onboarding- either into prop-house or as a standalone onchain backend for future farcaster activations or otherwise . i guess in my head since its already clear that this is probably the most powerful & culturally-aligned way we can spend, these multisig mvps feel like sort of pointless interim steps. Lets build the right infra and really legitimize retro at scale!
imo is self-evident that adding the client approval layer will increase centralization since coordinated voting blocks can favor rewards distribution to their favored client vs smaller claimants. will be interesting to see if we get any against votes from larger delegations. torn having pushed for stipending gov interactions since my first nouner call haha. what a difference 3 years and some inventive marketing makes! nouns offers many lessons to the socially indelicate lol. hoping we can iterate a less whale-friendly version of this & wish verbs the best with the prop
shortlist of most nounish-vibey props ever. big feels for me on this one.
how can you not be charmed by these school activations? SEL is becoming foundational in elementary education and if the impact is real, this is the *perfect* kind of thing for nouns to be involved in.
prop feels balanced (something for the 'network value' folks as well as the social impact folks), the passion shown in the videos is infectious & (imo) the foundation mission/concept is intuitive & compelling.
Signaling abstain for now bc wanting to do a bit of diligence (wylin raised a valid concern about auditability of foundation financials), but is not often i get butterflies from a prop & this kind of outreach hits deep.
thanks Grove et al for bringing what you love constructively into schools . play is the way!
+1 bix. if bidders have something to say imo we want to hear it. even more true if they try to use the forum in an adversarial manner.
don't see spam as much of a concern since there is still gas and its <= 1 comment per 2%-ish (?) price increase. we have 0-weight VwR which has seen limited bad-faith use & cost in bid case is higher since some eth must be locked.
Bidding is useful participation in the protocol. imo it earns you the right to say something- don't see why we'd ever opt out of more on-chain speech
nounswap-auction-houseimo it's undesirable to not collateralize the auction with a noun- it will produce a disorderly/unfair market condition, where someone can bid up an auction without consequence. would strongly oppose this approach & encourage the prop to be explicit about collateralization and to work to find gas-efficient ways to do it and maybe even ultimately allow governance participation, though i think this is a good trade-off if necessary.
also should we address the issue that traders with less 'valuable' nouns are advantaged (since they will be the ones likely to pay the largest premiums for the swap auction)? Feels like the complete version of this would allow nouns collateralized in auctions to be themselves permissionlessly auctioned with any premiums flowing directly to the original owner. Then the swapper can apply a reserve to their swap noun, where their bid for the treasury noun is only valid if they receive that reserve in their original noun's auction. The bidder for that noun's noun can also be auctioned etc etc . A lot more complicated but nesting auctions like this would provide a fair market mechanism where excess noun value can be recouped by the swap participant, rather than limiting participation to 'floor' noun owners... maybe could be shipped in a v2
not sure about price but does feel like a crucial thing.
always feels like high 90's % of funding should be via streams/currents
used to shill payouts-as-function-of-auction-price in early days and seems easy enough to do here. like equity opts.. or your friendly neighborhood mlm (why i sort of stopped talking about it lol)
ANYway
also interested to hear if builders don't like the mandatory update-to-claim...maybe the perfect amount of friction? sort of cements propdates as core protocol (not sure i'm using those terms correctly)
gl!
nounswap-auction-housewhy can't bidder lock their noun in the contract during the auction to prevent settlement failure?
also seems odd to make the dev royalty gov configurable.. fwiw i'd think we'd just immediately set it to something closer to 15-20%
largely an outsider in the current wave of minting euphoria.
imo there is a very simple/valuable idea here that can also be read as a cosmetic/branding flaw of prop house;
if 'props' were instead called something like 'expressions' you get the general case. Wrote around it in the 2024 re-up vwr; the expressions can be formal requests for eth, but they can also be anything else, and the voting or minting body is given agency to choose which creators to subsidize further.
this body can be self-permissioned (like nouncil/amigos etc but with richer dimensionality), which imo will be the 'identity/credibility' layer that ultimately works best for nouns vs top-down tallying of nounish deeds, etc.
it would be great if bound and prop house could work together in some way bc it may be wiz is more on the right track but also we have put a lot into prop house which seemingly could fold in some of this infra (additional chains, integrated minting/fee switches) and be instantly a mature (network effects, inherently sybil-resistant) platform for realizing the decentralized funding paradigm i think a lot of us are converging on; collectivized nounish allocation v2!
find it difficult somehow to rly support the prop; i think just because i feel like it could just end up swallowing prop-house since there is so much overlap & decentralized small grants may end up being 80-90% of what the dao funds (you could even imagine scout rounds being done alternatively through this, for example). ofc fomenting competition is one way to go, but i think it could be more nounish to encourage collaborations where it makes sense to avoid redundant efforts/fragmentation.
(as an aside, afaik wiz has some pending deliverables from a previous prop (?) and wonder if there is any issue with funding new projects while many of us are eagerly waiting for the L2 federation stuff)