Nouns DAO

This proposal raises the fork threshold to 30% (from 10%) and returns the fork period to 7 days (from 3.5 days).

We lowered the fork threshold from 20% to 10% back in Prop 384. The intentions back then was to:

• Make it easier for long-time nouners to fork if they felt fundamentally misaligned with the direction Nouns was accelerating towards in season 3 (post-fork 0).
• Reduce the daily treasury leak to arbitrageurs by making arb easier (and thus more competitive) while figuring out thoughtful acceleration of spend to lower BV naturally.

Now, a month and a half later, we’ve mostly cleared those intentions:

• Fork 1 occurred and long-time nouners that felt fundamentally misaligned (such as poap and beautifulnfts) joined the fork. We’re not seeing additional forks being initiated by long-time nouners.
• Book value has been lowered from the mid-30 ETH range to mid-20 ETH range through important bets on Gnars ($300k), Nouns Stories + Stoopid Buddy ($1.8M), Protocol Guild Animation Film ($400k), Nounish ($1M), Messhup’s Graphic Novel ($100k), Rise of Blus ($1.1M), and likely The Nouns Square ($270k). Happy with these high conviction bets.

Now that we don’t really need to worry about (for the time being) fundamentally misaligned long-time nouners being stuck in the DAO, we’re in a position of mostly just dealing with arbitrageurs.

I wouldn’t be a proponent of raising the fork threshold if that meant arbitraguers would just accumulate more Nouns for longer, but given that the BV is now already lower, arb modelling by the Verbs team is showing that if we raise the fork threshold to 30% the expected BV at next fork would be in the low-10 ETH range, which means that if the true market clearing price is above that then we should start seeing real buyers outbid the arbitrageurs immediately.

We could just wait out a few more months for BV to naturally lower and the problem to resolve itself, but the benefits of adding new DAO members and getting true price discovery sooner in my opinion outweighs the governance overhead of adjusting the fork threshold and thus I propose we raise the fork threshold to 30% now.