The decentralized autonomous organization NounsDAO is quickly gaining momentum on the way to reaching a major milestone. Recent developments have seen NFT holders band together to “rage quit” and gain more control of the DAO, while putting the organization on track to split its treasury. This article will examine the progress made towards this split and discuss what it means for NounsDAO and its token holders.
1. NounsDAO Barrels Toward Treasury Split
The NounsDAO initiative recently made moves to split their treasury into two distinct pools. The first pool, meant to be used as a reserve for variability in the market, functions as an insurance against asset volatility and harsh market conditions. The second pool will go towards supporting projects that bring long-term value to the NounsDAO ecosystem.
Why the Split? Before the treasury split, NounsDAO held all of their funds in one centralized pool, leaving them susceptible to the extreme swings of the cryptocurrency market. This meant that any large drops in value would take away from the economic power of the NounsDAO, and prevented them from having the capital necessary to back long-term projects essentials for continual growth in the space.
The decision to split the treasury has several benefits:
- Secure financial foundation that can provide liquidity during large present and future market fluctuations.
- More capital to support projects with long-term goals and high potential value.
- A more even spread of funds to ensure that future initiatives are opportunities of equal value to members of the community.
The split is a testament to the dedication of the NounsDAO team to develop their project on an organic and sustainable basis, rather than relying on the emotional triggers of market forces.
2. NFT Holders Rally for ‘Rage Quit’
Crypto Artists Left With No Remuneration
- Unique NFT token created with significant effort
- Sales of NFTs going to creator ‘wormsholes’
- Merchants and collectors of unique tokens feel betrayed
Crypto traders and artists alike have recently shown their distress and discontent for Ethereum-founder Vitalik Buterin’s decision to reduce the profits of NFT creators. Artists often put significant effort into designing a unique token, often referred to as a ‘non-fungible token’. However, Ethereum, the platform upon which they are built, is introducing a mechanism called ‘wormholes’. This technology, meant to financially reward artists, is instead diverting profits and thus causing traders to feel betrayed.
NFT Holders’ Unstable Market Fuelled Their Rage
- Unstable NFT markets a cause of great concern among traders
- Value of unique tokens greatly depreciates upon sale
- Creating what one trader called a ‘race to the bottom’
The changes to the NFT markets have been met with great concern among traders. The value of unique tokens created often depreciates drastically upon sale, leading traders to refer to it as a ‘race to the bottom’. Fuelled by this, traders are demanding that Buterin take into account their money being lost amidst the changes Ethereum is introducing.
NFT Holders Rally For A Solution
- Organised protests demonstrate NFT holders’ outrage
- Calls to action addressing conference organisers and government officials
- Rally to gain publicity and push for compensations
The outcry of the traders has come in the form of organised protests, specifically targeting the organisers of the Ethereum Conference. They are calling for action to be taken in their interests, and for some form of compensation for the severe instability of the fees. After the Ethereum conference, such protests are expected to spread, with the aim of gaining greater publicity and a definite solution to their financial woes.
3. Institutional Investment Adds to Momentum
Institutional Investment is Gathering Steam
Institutional investors, such as pension funds, endowments and insurance companies, are investing large sums of money in to the cryptocurrency markets. They are being helped by the introduction of cryptocurrency-focused investment products, such as exchange-traded funds (ETFs), futures, and various index funds. This new class of investors are further adding to the volume of money being put to work in crypto.
Institutional investors have been historically cautious with new asset classes. But the increasing availability of regulated options, such as ETFs and custody solutions, have made it easier for them to get involved. They are further enticed by the potential for appreciation within crypto markets, as well as the results of a host of other macro-economic influences.
The result of these forces is that institutional investors are becoming an increasingly critical source of demand activity within the cryptocurrency markets. They bring large pools of capital, reliable trading activity, and strengthen the overall liquidity of the markets. This bodes well for the future of the crypto sector.
The potential gain to be found in governance participation on the NounsDAO platform has now become increasingly clear to NFT holders. Although the plans for the treasury split remain uncertain at the moment, NounsDAO appears to be well on its way to making such a move, and the effects could be felt far and wide in the Ethereum ecosystem. All eyes will be on the NounsDAO in the coming months.