Nouners made some points which I respect and understand where they’re coming from. Going down the path of equity funding - as opposed to strictly funding projects without a direct expectation of return - firmly places the DAO in the same territories as VCs and traditional funds. And that path is marked by increased legal liabilities and regulatory scrutiny that could significantly affect the way the DAO operates. To me, these concerns are valid and should be carefully considered.

At the same time, I do want to highlight my disagreements with some other arguments made against this proposal, specifically relating to the ideological values of Nouns.

1. Contractual equity agreements dilute the nounishness of a proposal

   I think this argument is orthogonal to the core premise of the Nouns virtuous cycle: drive attention back to the meme. To me, it doesn’t make sense to eschew potential equity partnerships under the pretense that the DAO should never seek direct upside from funding projects. In my opinion, if the goal is to drive attention & value back to the Nouns brand, there shouldn’t be mutual exclusivity between accruing value via brand exposure & accruing value via contractual revenue flow. Both routes increase the size of the treasury and enable the meme to further propagate.

2. Nouns should fund projects which it is uniquely capable of supporting

   As Nouns grows, the validity of this argument diminishes. If Nouns indeed becomes a massively valuable, permissionless brand, the most ambitious projects which approach the DAO for funding will have no shortage of potential funders who realize the value and are more inclined to fund the project & experience the upside. For example, it’s easy to imagine a scenario where Pharrell approached the DAO about funding a song about Nouns. It wouldn’t make sense for the DAO to walk away from this proposal just because he could also readily get the funds necessary from any sufficiently interested record label.

3. Nouns should be a neutral ecosystem, and shouldn’t take profit-driven stakes in projects

   I found this argument to be the strongest and most compelling, because it gets at the heart of Nouns strongly resembling Ethereum itself; a credibly neutral ecosystem in which anyone can build. It’s not hard to imagine a future where NounsDAO operates similar to the Ethereum foundation, providing grants to projects that build in the ecosystem. Extending this possibility, it’s also not hard to imagine venture funds spinning up Nouns-specific arms - just like many traditional VC funds have done admist the growth of Ethereum - and doing equity deals with companies that are building on top of Nouns.

   At the same time, I do think it’s important to recognize the nuances here. A big part of the Nouns virtuous cycle mechanism is building up the treasury, which continues to accrue funds at a rapid rate. In a world where Nouns becomes more Ethereum-like and turns into more of a public utility than a brand, it’s also likely that many ambitious projects will turn to venture funding over DAO funding, as the former will be cheaper/more readily available to access & will arguably offer the project more tailored resources to succeed. In this case, if the social value of the treasury depreciates, it seems logical that the DAO would want to extend the value of Noun ownership to not only governing the treasury, but governing projects & protocols that are built on top of Nouns. And what is the most straightforward way to gain these governance rights? To become early investors in these projects & protocols, via an equity/token structure. In the long-run, I think it’s inevitable that the DAO seeks more ownership in the projects that are built in the Nouns ecosystem. I’m not saying that will necessarily come in the form of traditional equity, but it’ll be structured in the form of profit-driven stakes nonetheless.

Obviously, I’m disappointed that Prop 107 didn’t pass. I think it’s unfortunate that the proposal had such low turnout and I think many of the uncertainties could have been worked out/ameliorated had more discussion taken place before the proposal went on-chain. However, I firmly respect the outcome, as it was the result of a perfectly legitimate process. I want to thank many of the Nouners and Nounders who did offer very helpful feedback throughout this process. Even though I don’t agree with all the points that were made, I think this was a very valuable learning experience and for

Nouners made some points which I respect and understand where they’re coming from. Going down the path of equity funding - as opposed to strictly funding projects without a direct expectation of return - firmly places the DAO in the same territories as VCs and traditional funds. And that path is marked by increased legal liabilities and regulatory scrutiny that could significantly affect the way the DAO operates. To me, these concerns are valid and should be carefully considered.

At the same time, I do want to highlight my disagreements with some other arguments made against this proposal, specifically relating to the ideological values of Nouns.

1. Contractual equity agreements dilute the nounishness of a proposal

   I think this argument is orthogonal to the core premise of the Nouns virtuous cycle: drive attention back to the meme. To me, it doesn’t make sense to eschew potential equity partnerships under the pretense that the DAO should never seek direct upside from funding projects. In my opinion, if the goal is to drive attention & value back to the Nouns brand, there shouldn’t be mutual exclusivity between accruing value via brand exposure & accruing value via contractual revenue flow. Both routes increase the size of the treasury and enable the meme to further propagate.

2. Nouns should fund projects which it is uniquely capable of supporting

   As Nouns grows, the validity of this argument diminishes. If Nouns indeed becomes a massively valuable, permissionless brand, the most ambitious projects which approach the DAO for funding will have no shortage of potential funders who realize the value and are more inclined to fund the project & experience the upside. For example, it’s easy to imagine a scenario where Pharrell approached the DAO about funding a song about Nouns. It wouldn’t make sense for the DAO to walk away from this proposal just because he could also readily get the funds necessary from any sufficiently interested record label.

3. Nouns should be a neutral ecosystem, and shouldn’t take profit-driven stakes in projects

   I found this argument to be the strongest and most compelling, because it gets at the heart of Nouns strongly resembling Ethereum itself; a credibly neutral ecosystem in which anyone can build. It’s not hard to imagine a future where NounsDAO operates similar to the Ethereum foundation, providing grants to projects that build in the ecosystem. Extending this possibility, it’s also not hard to imagine venture funds spinning up Nouns-specific arms - just like many traditional VC funds have done admist the growth of Ethereum - and doing equity deals with companies that are building on top of Nouns.

   At the same time, I do think it’s important to recognize the nuances here. A big part of the Nouns virtuous cycle mechanism is building up the treasury, which continues to accrue funds at a rapid rate. In a world where Nouns becomes more Ethereum-like and turns into more of a public utility than a brand, it’s also likely that many ambitious projects will turn to venture funding over DAO funding, as the former will be cheaper/more readily available to access & will arguably offer the project more tailored resources to succeed. In this case, if the social value of the treasury depreciates, it seems logical that the DAO would want to extend the value of Noun ownership to not only governing the treasury, but governing projects & protocols that are built on top of Nouns. And what is the most straightforward way to gain these governance rights? To become early investors in these projects & protocols, via an equity/token structure. In the long-run, I think it’s inevitable that the DAO seeks more ownership in the projects that are built in the Nouns ecosystem. I’m not saying that will necessarily come in the form of traditional equity, but it’ll be structured in the form of profit-driven stakes nonetheless.

Obviously, I’m disappointed that Prop 107 didn’t pass. I think it’s unfortunate that the proposal had such low turnout and I think many of the uncertainties could have been worked out/ameliorated had more discussion taken place before the proposal went on-chain. However, I firmly respect the outcome, as it was the result of a perfectly legitimate process. I want to thank many of the Nouners and Nounders who did offer very helpful feedback throughout this process. Even though I don’t agree with all the points that were made, I think this was a very valuable learning experience and for