WTF is Nouns Prop House?!?
The Tally Newsletter, Issue 78
Welcome back for issue 78 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 do a quick NounsDAO update and cover Nouns Prop House, a public infrastructure project funded by NounsDAO.
A Quick Nouns Update
GM anons, since we last spoke, the Nouns Discord has been discontinued. 4156 has made it apparent that he wants no official place of discourse and wants the community to uphold conversations wherever they please. Nouns wants to take the most decentralized approach to allowing discourse to happen, therefore, he wants to mimic BTC and ETH, which have no official places of discourse.
Enter the post-Discord era.
I've openly expressed dissenting/mixed feelings about whether axing the discord would help. Discord is a place of congregation, but ultimately Nouns as a project hyper-focused on decentralization. It only makes sense the Discord had to come to a close. I still do believe there are short-term centralization headwinds of certain groups controlling power, although I hope this changes as the DAO continues to dilute it's holders.
Nonetheless, time to dive into Nouns Prop House.
Prop House Intro
Prop House is a DAO bootstrapping mechanism that helps DAOs fund creators to complete initiatives the DAO has. In a way, Prop House acts as a bounty system for DAO work. Whether it’s to propagate the brand of the DAO or specific mandates/work the DAO may need completed, Prop House is the house for DAOs to get shit done. Let’s run through a timeline of how Prop House became what it is today.
Prop House Timeline
NounsDAO Proposal 23 - The beginnings of Prop House
Nouns Prop House originally began as an experiment for the DAO. The goal of the Prop House is to fund projects that further the meme of Nouns. Prop House is a place that NounsDAO can fund proposals from community members to propagate the Nouns meme. Prop House was originally funded for three rounds in NounsDAO Proposal 23.
For the funding rounds, each Noun is worth ten votes. The reason for this is so a single Noun can spread their vote across numerous proposals in a round, because a single round can have numerous winners. For example, Round 3 had two winners win 5 ETH each.
Round 3 above was an open round, allowing proposals of all types. Each round can have it's own focus defined by the community that is funding the round. For example, NounsDAO held a Prop House round, calling for any ideas that would materially help governance.
You are likely wondering why these proposals are not made directly to the NounsDAO? In order to submit a proposal to the NounsDAO, you need 2 Nouns. Also, there is not a direct avenue for the DAO to jumpstart an initiative (ie Calling for Noun Governance Clients) which makes Prop House an easier outlet for initiatives to propagate. Prop House is a way for NounsDAO to fund buildors for specific goals the DAO may have.
NounsDAO Proposal 62 - Nounish Project Support
NounsDAO Proposal 62, the continuation of Prop House expanded on the Prop House functionality. Specifically within this proposal, NounsDAO communities like CryptToadz, Nouns Japan, Budlight etc. could have their own Prop Houses to fund ideas that their respective DAOs want to further. For the specific Prop Houses, the holders of those NFTs could vote on which proposals they like best in funding rounds their DAOs approve.
All the same functionality, but extended to Nounish houses that spread the Nouns glasses meme.
NounsDAO Proposal 105 - Prop House as Public Infra
This move felt inevitable. NounsDAO Proposal 105 by the Prop House team was a funding request to make the Prop House public infrastructure a good that could be used by any project. Projects like Aave, ENS, Ape Coin expressed interest in building/using a Prop House like mechanism. This leading to this proposal - why not turn Prop House into a decentralized protocol?
Not only did proposal 105 take Prop House public, but they integrated new formats.
Retroactive rewards are rounds where the proposals are in a completed stage. After which the DAO members vote on which proposals were the most successful and deserving of the rewards. Pre-funding rounds leaves DAOs susceptible to a principal-agent problem. If a DAO has already granted funds to the proposal executor the funds, they can not quality control the delivery of the project. Therefore, having a round that is retroactively funded, opens the gate for competition of actual execution of the rounds mandate.
Ok, that is a mouthful, let's take a look at a simple example. NounsDAO's "Challenge: Make Nouns Go Viral" Prop House round is one of the first retroactive rounds. As you can see, the goal of the round is very simple, make Nouns go viral and submit evidence of the content going viral.
In this challenge, proposers have 2 weeks to make Nouns go viral. Noun holders then vote on the top 5 proposals and fund them.
Prop House has yet to launch an infinite auction, but what I'm imaging is a rolling auction where the DAO funds a new auction on a rolling basis. For example, every week the DAO funds one proposal and that same round is reinstated every week.
Overall, NounsDAO proposal 105 was the largest and most important funding of Prop House. You can tell by not a single Against vote of the proposal how excited NounsDAO is for Prop House.
Final Thoughts
The pseudo economy has always been a meme of Balaji Srinvasan's. Prop House feels like one of the purest implementations of it. Any DAO can submit a proposal, which is then decentrally fulfilled by a random actor.
Not only can DAOs effectively deploy capital into meaningful projects, but also fund a proposer a life-changing amount of money. Prop House rounds will be globally competitive, and as more people catch on, the competition for winning rounds will become more intense.
Alas, be gone, anon. Happy Halloween ya freaks!