Beloved community treasury project, Nouns DAO, has been scandalized by an internal dispute. Two of the DAO’s most powerful members, in terms of voting power, are pulling massive salaries out of the community’s treasury. This appears to be a serious conflict of interest: Who wouldn’t be tempted to approve their own $32k a month salary?!?
For those of you who are unaware, Nouns was started in August of 2021. Some of the prominent founders, aka “Nounders,” include Dom Hoffman of Vine and Punk4156. The project is based around Noun NFTs, created via a generative code. Instead of releasing a full collection of several thousand PFPs, Nouns took a different approach. Every day, a single Noun NFT is generated and put up for auction. Thus, their motto is “One Noun, every day, forever.”
Proceeds of the daily auctions go to a community treasury. This treasury is the most famous part of the project–it currently sits at ~28,500 Eth! The experimental mission of Nouns is to see how a community can come together to fund public goods. It is the DAO’s responsibility to decide what to do with the project’s treasure chest. Proposals are made and anyone that has a Noun NFT can vote on the DAO’s proposals.
While past proposals have involved creating Super Bowl ads (with Budweiser), a coffee brand, feature films, animated shorts and a comic book, certain proposals have come under scrutiny for the appearance of corruption. On the Nouns Forum, a user, Ponti, pointed out that the “Two biggest Nouns DAO delegates are also the two biggest DAO ‘earners.’” The reference to “delegates” indicates that someone trusts a DAO member to vote on their behalf; thus, they are delegated that non-voting Noun holder’s vote.
Apparently, Noun 22, the DAO’s highest-paid member, earns 360 Eth a year while controlling 19 votes. The second largest salary goes to Toady Hawk: 148Eth a year. He controls 23 delegates. Considering that the total voting population of Nouns is about 500, Noun 22 and Toady’s 42 combined delegates make up about 8% of all the votes. For what is supposed to be a direct democracy, two people having 8% of the votes is bad enough. However, when looking at past proposals, the voting power of Toady and Noun 22 is MUCH more significant than 8%.
The average number of votes that each proposal gets is about 100. That changes the Toady + Noun 22 math a lot: 42 delegates out of 100 is tantamount to a stranglehold on power! The threshold of “for” votes that a proposal needs to be passed is usually around 40-50 votes. This means that, without any other members voting, Toady and Noun 22 COULD pass proposals by themselves! With this is mind, certain expenditures from a few months ago look suspicious, or at the least, very generous.
One expensive proposal that Toady passed was #128. It was unopposed receiving a 111 to 0 mandate. The proposal funded the @thenounsquare Twitter account. Details of the (very polished) proposal report show previous engagement numbers, contest results, and a schedule of Twitter Spaces. While the language and pictures look good, the numbers do not. After growing the Twitter account by 1.5k followers in 6 weeks, the proposal requested $500k to keep the project funded for four months! At that rate, the account would get 4k followers for that ginormous sum. Another way to put it into perspective is that Nouns DAO is paying its Twitter team $125 per new follower. That's either gross mismanagement, blind generosity, or embezzlement.
Finally, let’s look at Noun 22’s eye-popping salary proposal. The vote on Noun 22’s $32k-a-month salary, proposal 111, passed 117-1. So, to be fair, a large number of votes were cast in Noun 22’s favor. However, it is unclear how many votes were individually cast on this proposal. It is plausible that a few members with many delegates made up the majority of the 117 “for” tally. In other words, via the mechanism of delegates, Nouns DAO passes votes that seem completely democratic and transparent–yet the truth of the votes is actually obscured.
Speaking of obscuring the truth, the whistleblower, Ponti, was banned from the Noun Discord for posting about the possibility of corruption within the DAO's leadership. Neither Noun 22 nor Toady hawk chose to address Ponti’s inquiries directly.
