NounsDAO is heading for a public treasury split within a week, after a critical mass of owners of cute, colorful digital collectibles declared crypto’s latest ‘craze quit’.
Holders with 25% of all noun NFTs are thumbing their noses at the project. Instead of trying to sell their NFTs on the open market – where NFTs are taking a bear market beating – they are rushing to get a better price directly from their hoard of ether tokens.
Under the crypto club’s newly introduced rage quit rules, if 20% of Nouns NFTs request a ‘fork’, they can split from the main group and get their share of the project’s 30,620 ether tokens (worth approximately $50 million at the time of writing). . Each Nouns NFT has a book value of approximately 36.5 ETH ($59,600), giving the current fork a treasury of 7,598 ETH (approximately $12.4 million).
Nouns are now trading near that level for the first time since December last year, with their price pushed higher by traders looking to make an easy profit from the arbitrage. Some of them are well-known figures in the crypto market’s “risk-free value” trading subculture, including the pseudonym DCFGod, which owns 28 nouns.
The situation is the latest in a series of “rage quits” that show how decentralized autonomous organizations (DAOs) deal with groups of investors who lose faith in their vision and demand their money back. Projects where the value of the assets is below their book value are especially attractive to activist traders looking to unlock the value of those assets
In the case of NounsDAO, the mechanism to unlock that value is relatively new. Last month, the DAO approved a broad upgrade called v3, which enabled forking to give disgruntled investors a way to exit peacefully.
“Every DAO needs a minority protection mechanism.” DAO employee Elad said in a recent YouTube video describing the process.
