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The Tally Newsletter, Issue 76
Welcome back for issue 76 of the Tally Newsletter, a publication focused on DeFi and DAO governance. We’ll keep you updated on key proposals, procedural changes, newly launched voting systems, shifting power dynamics, and anything else you need to know to be an informed citizen.
My name is 0xThanos, an NFT native and the newest member of Tally’s newsletter collective. I will provide deeper insights on NFT DAO’s and their takes on governance. As well as any NFT meta conversations that may affect governance.
In today’s issue, we will preview Zora’s newest product, NounsBuilder, a crucial piece of future DAO infrastructure.
DAO infra has piqued many investors’ attention. While companies have been funded to make the DAO voting/proposal experience easy (ie Tally), the ability for DAOs to raise funds is still taboo and an underfunded aspect of DAO infra.
Historically, the traditional form of fundraising for DAOs has been from token sales (including NFTs). In today’s issue, I will cover how I expect the landscape of DAO funding to mimic longer-term models like the NounsDAO auction model - 1 token, every day, forever.
NounsDAO has quickly gained popularity and become the flagship NFT DAO. As NFT projects search for better ways to monetize, the NounsDAO auction mechanism will become the standard minting process for DAOs of the future.
Prior to the NFT boom of 2021, DAOs historically launched ERC20 tokens as a way of representing ownership in the DAO. As NFTs caught fire we began seeing "more than art" primitives being built - on-chain games, token-gated access events, and of course NFT governance tokens.
Thousands of NFT projects have launched but few have had staying power. Often, the original founders and adopters are the only ones left caring for governance post mint. NFT projects have not had a strong baseline for how to launch an effective project, creating a lack of incentive and secondary buyer alignment Projects mimic'd what worked best in the past - generating thousands of copy pastas of the original CryptoPunk 10k mint.
New minting mechanisms like Metadrops Fairlaunch and Doodles Bucket auction have emerged to avoid gas wars. These models have suffered because the period in which the NFTs are sold is too short - you are either paying attention the day of the mint or you aren’t.
Nouns was the first NFT project to auction 1 Noun, everyday, forever. The infinite mint turned into a genuine paradigm shift. Instead of a single fundraise mint and reliance on royalties, the mint became a consistent daily raise. This effectively drove liquidity from resale markets to the new NFT in the collection being auctioned that day. Instead of relying on a slice of royalties on P2P sales post-launch, the auction provided consistent revenue. With the ETH of each sale being added to the DAO treasury directly, NounsDAO treasury grew faster than the standard royalty-dependent projects.
The auction has already been forked by projects like lil nouns, but has yet to be adopted by non-Nouns inspired projects. This will change rapidly as NFT royalties get squeezed to 0, and better infra is presented to creators to launch with the Nouns auction.
Are you Nounish?
Nounish? It’s hard to explain what Nounish is, without interacting with Nouns.The novel infinite mint has been the backbone of NounsDAO, but the project goes much deeper than that. There is so much to love about Nouns - for its "1 Noun = 1 Vote" governance, for the on-chain focus, for FOMO Nouns, for CC0, or the dope art.
The open-source/non-proprietary (CC0) beliefs of NounsDAO and the protocol has allowed for projects to pick what Nounish aspects they would like to incorporate. Nounish projects have begun to emerge by pulling traits, but we are at the cusp of the projects pulling features from the Nouns protocol into theirs.
How do I launch a Nounish project? Don't worry anon, NounsBuilder is here.
WTF is NounsBuilder?
NounsBuilder is an abstraction factory of the Nouns protocol that allows DAOs to customize the NFTs, auction, and governance settings similar to the core Nouns distribution mechanism. With NounsBuilder you don't need to fork the Nouns contracts and manually change the hard-coded variables. You simply upload your own art, decide what parts of the Nouns protocol you would like to incorporate, define the variables you would want to change, and deploy.
What exactly can you customize for V1?
Art and it's properties/attributes
Proposal threshold basis points
Founder’s carry of proceeds
What % of the mints are sent to the founders
Kickback to NounsBuilder Protocol DAO
Zora has designed the protocol to support custom metadata renderers and more auction types, such as GDAs, over time. NounsBuilder will be an avenue for NFT projects that want consistent revenue or for DAOs that are looking to launch immediately without having to worry about fundraising concerns. The intersection of NFTs and DAOs continues to be blurred.
Currently, NounsBuilder is in code audit/private beta and deployed on Ethereum testnets. Stay tuned for the mainnet launch by following NounsBuilder on Twitter.
A special thanks to Rohan for helping refine this post!