Nouns DAO

TLDR

Asking for 45,625 USDC to audit the $nouns ERC20 token contract and DAO upgrade with Sherlock.

Context

The $nouns token is designed to be the canonical ERC20 token backed by Nouns. It will enable Nouns fans to “stack $nouns” similar to how Bitcoin fans “stack sats”. Any Noun could be deposited into the $nouns contract in order to mint e.g. 1M $nouns. Anyone holding 1M $nouns would be able to redeem them for a Noun from the $nouns contract.

For deeper context please see:

• Noun 40’s first cast about it, and his recent podcast with Toady where he discusses the token.
• The token spec.
• A discussion thread about the spec.

Scope

We’re deploying a new token factory on mainnet, that lets anyone create a new NFT-backed ERC20 token:

• They have a fixed exchange rate, e.g. 1 NFT = 1M ERC20 tokens.
• The ERC20 token has an Owner account that can upgrade it, as well as disable future upgrades.

We’re upgrading the Nouns DAO logic contract, such that it treats its $nouns akin to how it treats DAO-owned Nouns:

• The DAO’s Nouns redeemable balance is excluded from adjusted total supply.
• One of the DAO’s fork parameters is the list of ERC20 tokens that get sent to fork DAOs; this upgrade rejects attempts to add the $nouns address to this list (again, similar to how we do not send Nouns to fork DAOs today).

For a deeper dive you are welcome to review the NFT-backed token Github repository, and the DAO upgrade PR.

Audit Plan

We intend to undergo a 6-day audit with Sherlock, led by hyh, #4 on Sherlock’s, #6 on code4rena, and lead our recent audits for client incentives and DAO V3. The audit will cost 40,625 USDC. We are also allocating 5K USDC for reviewing potential fixes after the audit (500 USDC x 10 hours).

Total USDC requests: 45,625 USDC.

Transactions

Similar to the previous audit proposal, this proposal’s single transaction approves the verbs multisig to spend the requested budget.

Note: this approval overrides any previously set approvals, thereby removing any leftover approval balance from the previous audit.

Post-Audit Steps

If this audit proposal is approved, we plan on performing the following next steps once the audit is complete:

1. Deploy the token factory
2. Create a proposal to upgrade the DAO
3. Create a proposal that will:
   1. Use the token factory to create the $nouns token
   2. Set the DAOs’ $nouns token parameter, so the DAO logic can treat it as planned

Once this setup is done, any Nouner can deposit their Nouns to mint $nouns, including the DAO by executing a proposal that would deposit DAO-owned Nouns into the $nouns contract.

Thanks! elad & david verbs team ⌐◨-◨