NounsDAO, a notable player in the bustling NFT arena, is treading on shaky grounds with its treasury split just a week away. Propelled by displeased holders of 25% of all Nouns NFTs who are seemingly disillusioned with the project, a whirlwind of ‘rage quits’ is candidly sweeping across this quirky world of digital collectibles. Instead of venturing into the less profitable open market, where NFTs are weathering a bearish storm, these holders are seeking better returns directly from the project’s repository of ether tokens.
The club’s freshly approved ‘rage quit’ guidelines state that a ‘fork’, triggered by the call of 20% of Nouns NFTs, could lead to a split from the main group. The potential split could enable the dissenting faction to claim their share of the project’s 30,620 ether tokens, valued at approximately $50 million. Consequently, each Nouns NFT currently holds a book value of about 36.5 ETH or $59,600, contributing to an overall treasury of 7,598 ETH, which is roughly $12.4 million.
Driven by the promise of easy money through arbitrage, traders have pushed the value of Nouns near to the book value for the first time since last December. Interestingly, some are key players in the crypto market’s ‘risk-free value’ trading subculture, including the pseudonymous DCFGod who owns 28 Nouns.
The unfolding situation in NounsDAO shines a spotlight on similar ‘rage quits’ occurring within decentralized autonomous organizations (DAOs). These betray the tensions that arise when factions of investors lose faith in the vision of the project and insist on cashing out. Projects valued beneath their book values are particularly tempting to activist traders seeking to unlock hidden value within these assets.
It’s worthwhile to note that the means for unlocking value in NounsDAO is a recent modification. Last month, the DAO greenlit a sweeping upgrade dubbed ‘v3’ that permits forking, providing disgruntled investors with a peaceful avenue to ‘rage quit’. In a recent YouTube video, DAO contributor Elad made an astute observation, emphasizing that “Every DAO needs a minority protection mechanism”. This, it seems, applies aptly to the current situation, as NounsDAO dances on the edge of an operational split.
Source: Coindesk
