The NounsDAO community is currently witnessing an unprecedented phenomenon. Hundreds of its dedicated members are fervently requesting refunds, giving rise to the possibility of a significant division within the project’s treasury. This unexpected surge in interest among participants seeking to withdraw from the DAO has cast a shadow of uncertainty over the treasury’s future, a treasury that has played a pivotal role in funding numerous innovative projects.

The core purpose of the NounsDAO treasury is to allocate resources strategically for the long-term growth and prosperity of the Nouns project. Over time, it has successfully financed a remarkable total of 158 projects and proposals. However, its very existence is now called into question as a substantial segment of the community expresses their intention to disengage from the collective.

Following the protocols outlined in NounsDAO’s “rage quit” provisions, if 20% of Nouns NFT holders unite in advocating for a “fork,” they hold the collective authority to initiate a separation from the main group. By doing so, they can rightfully claim their respective shares in the project. Once this intricate forking process concludes, participants can break away from the primary collective, each receiving an equitable allocation, approximately valued at 35 ETH. Presently, Nouns auctions are observed to be within the range of 35-36 ETH.

~40% of Nouns are quitting the DAO and claiming a refund

Noun #1 sold for 613 ETH in August '21 ($1.9M at the time)

Now Nouns are only going for around 35 ETH ($40k)

Some holders think the $30M treasury is being thrown out the window

Here's what's causing problems:… pic.twitter.com/jPsPE9ycLV

— Hunter Solaire ᵍᵐ (@huntersolaire_) September 11, 2023

At the time of drafting this report, there are a total of 334 Nouns actively associated with the “fork,” and the countdown stands at four days. The present value of the fork treasury is estimated at approximately 11,858 ETH. This remarkable level of participation, comprising nearly 40% of Nouns holders aspiring to exit the organization, is indicative of the gravity of the situation.

The financial implications that arise from this unfolding scenario are substantial, sparking concerns about the future of other decentralized autonomous organizations (DAOs). Even a well-established entity like NounsDAO is facing such challenges, raising pertinent questions about the sustainability of similar projects.

However, amidst the concerns, some members within the crypto community perceive a potential silver lining in this situation. User NiftyNoonNFT has ventured to suggest that the departure of NounsDAO from the scene could potentially inject liquidity into the market. In a tweet, they mentioned, “[NounsDAO] exit may serve as a modest liquidity event that bolsters the market. This could see thousands of ETH returning to the hands of devoted NFT enthusiasts.”

This intriguing juncture in the evolution of NounsDAO traces its origins back to the approval of a comprehensive upgrade known as v3. This pivotal decision introduced a mechanism that allows dissatisfied investors to exit the organization through a well-structured forking process, with the primary aim of safeguarding the interests of all stakeholders. The consequences of this experiment in decentralized governance are still unfolding, with the entire crypto community attentively monitoring NounsDAO for further developments.

Disclaimer: This article is intended solely for informational purposes and should not be construed as financial or investment advice. The cryptocurrency markets and decentralized autonomous organizations (DAOs) are characterized by their rapid evolution and inherent uncertainties. Readers are strongly encouraged to undertake their research and seek advice from relevant experts before making any financial decisions.