Feedback - lil nouns Delegation Proposal

Soliciting feedback on a proposal noodling around in GOOP TROOP regarding how to best utilize the lil nouns granted to Nouns DAO by lil nouns dao.

Current state of affairs:

  • Nouns DAO holds 355 lil nouns and is the largest holder in the dao.
  • Nouns DAO has not voted in lil nouns governance.
  • Voter turnout in lil nouns hovers around 2-4% of unique voters.

Utilizing lil nouns held by Nouns DAO

  • It seems unlikely that Nouns DAO will vote in lil nouns governance due to the technical friction involved in voting.
  • Delegation is a good option to overcome the technical friction.

Feedback Request

I am looking for feedback on delegation models. The following are some ideas and I would welcome more or feedback on these:

  • Create a multi-sig to delegate lil nouns to and vote using the multi-sig (internalize voting, reduce technical friction, but creates governance overhead for Nouns DAO).
  • Invite lil noun holders to apply to be Nouns DAO delegates within lil nouns (externalize voting, place voting power in the hands of people nearest to governance decisions, but creates overhead at Nouns DAO for selecting lil noun holders).
  • Create a multi-sig to delegate lil nouns to and create a structure whereby lil noun holders can govern the Nouns DAO lil nouns using gasless voting (Snapshot) (externalize voting, democratize governance by reducing the cost of voting, no governance overhead for Nouns DAO).

Not directly related to the above (I don’t have strong views on how we should vote / not vote / delegate; I would actually lean on not creating any governance externalities in a system that we aren’t active enough to have good understanding of), but I’d actually support matching the lil nounders in offering up some of our lil nouns for their small grants pool. It seems like lil nounders is contributing every 90th lil noun to SG (10% of their stake?), so something like that would be contributing around 35 lil nouns the nouns dao owns to lil nouns SG.

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Thanks. I think I am aligned in the sense that Nouns is probably best positioned to off load voting in lil nouns to people closer to lil nouns governance (in the Feedback Request above, that’s the third option).

Regarding the small grants pool, I agree.

fwiw I think this is one of the best outcomes. We can continue compensating lil noun builders with governance tokens and hopefully also increase voter turnout from previously unused tokens.

I think any outcome that starts rewarding builders with these tokens or allows our most active community members to get a stronger vote is best case. One issue we currently face is voter turnout so anything to help us reach quorum would be a big value add to the community, especially enabling these inactive tokens to get voting!

this is a complex issue. i dont have a high conviction opinion on what we should do, but wanted to share a few thoughts:

  • we cannot expect Nouners to participate in governance of every protocol or extension that the Nouns treasury owns. it is hard enough for Nouners to keep up with Nouns - on chain / prop house / small grants
  • i don’t think it’s a bad thing necessarily if we keep a passive stake. voter turnout isn’t the issue here, it’s about the quality of the vote. if Nouns DAO delegates our Lil Nouns votes, we own 10%, and that significantly tips the scales in favor of who we delegate to. that creates an incentive for people to lobby Nouns DAO for our Lil Nouns delegation (vs buy lil nouns). imagine if the Nounders allocation to Nouns DAO was up for delegation…
  • the easiest way to solve this is with incentives. i think governance for the sake of governance creates work… but people will respond to incentives. that is why Lil Nouns has succeeded so far. Lil Nouns gave an economic interest to Nouns DAO. if there was a financial incentive for Nouns DAO to delegate our Lil Nouns… that would get support without only relying on goodwill

Appreciate it 22. I wonder if simply delegating the entire stake to lil nouns collectively makes sense.

It could be used to create a gasless voting instance to overcome the financial burden of the current voting system (and thereby increase participation) and also solve the influence issue you note as every lil noun would speak into how the Nouns DAO stake votes.

The passive stake would be preserved (i.e., passive as to Nouns DAO), reinforcing the financial incentive.

Hey all,

Tl;dr for below - least complex solution is utilising lil nouns as raffle/contributor rewards through lil grants in Lil Nouns DAO or small grants in Nouns DAO.

Appreciate the thoughts and ideas towards nouns dao lil nouns. Agree with noun22 that it is indeed a complex issue as votes are tied to the NFTs. Lobbying is an interesting second order effect I hadn’t considered.

As noun 40 mentioned, we (lil nounders) allocate a portion of our lil nouns to lil grants. If we were to ask for anything, it would be to receive a little more lil nouns to scale our efforts.

Lil grants use these lil nouns in retro/startup comp packages, splitting comp by lil nouns/eth. The reception towards this has been great, with a lot of contributors even preferring payment in lil noun/eth splits as over raw eth. We’ve managed to find a way of increasing our treasury run rate without underpaying contributors.

It would be equally interesting to see Nouns DAO SG do the same thing with Nouns DAOs lil nouns - utilising them as comp and lengthening run rate to the same effect if not more.

During development of lil nouns v0 (pre dao), I had a conversation with 4156 regarding the Nouns DAO reward. We figured that best use case would be in community giveaways/rewards as a means of engaging non nouners (large majority of community members and builders at the time). Although, we couldn’t build out a system to allow for this in time. I’m still under the impression that this is the optimal use case for Nouns DAOs lil nouns. Especially after seeing a working model of this in lil grants.

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Good idea. Perhaps then, sending Lil Nouns to 22’s group to be used in small grants? Just thinking about the most best way to get the lil nouns on the hands of active participants vs just in a passive stake.

Interesting idea. I will think it through.

My gut reaction - I don’t know if Nouns DAO would be interested in just giving our Lil Nouns back to Lil Nouns / Lil Grants for free, or having Nouns SG distribute them to builders. This is because Nouns DAO is currently incentivized to see Lil Nouns succeed because Nouns DAO owns 10% of the project - if Nouns DAO gives away our ownership of Lil Nouns to proliferate Lil Nouns, it seems counter productive to Nouns DAO’s interest.

Again could be convinced otherwise but that’s just a gut reaction

wanted to suggest another potential solution, despite it incurring more governance overhead, I like it because it doesn’t require trust:

  • deploy a new governor contract that looks at NounsToken for voting power, and set its parameters such that proposals end faster than lil nouns proposals
  • lil nouns change their Nouns emissions to send to this new governor
  • Nouns DAO can execute a prop to transfer lil nouns it holds to the new governor
  • then Nouners can submit props on new governor to vote on lil nouns props or submit props of their own

That’s fair.

I view the Nouns incentive as proliferating the meme and governance/treasury mechanism, not the financial granting of 10% of the project (which arguably would be near impossible to monetize without inflicting significant harm on the pricing of lil nouns – e.g., sends a signal is Nouns is selling its lil nouns).

Good solution, but I don’t think there is appetite for additional governance overhead. As 22 points out: “We cannot expect Nouners to participate in governance of every protocol or extension that the Nouns treasury owns. it is hard enough for Nouners to keep up with Nouns - on chain / prop house / small grants”

i think the reason that Lil Nouns got so much engagement from Nouns DAO, compared to just about any other extension project, is because of the financial incentives. there are a lot of extensions that all serve to proliferate the Nouns meme, but i think the financial incentives were critical in incentivizing many Nouns to support Lil Nouns in the early days

i agree with you - i don’t think Nouns is going to sell our Lil Nouns into the market any time soon, but if Lil Nouns succeeds, that 10% Nouns DAO owns could be valuable one day whether in market value or governance rights. in my mind, it doesn’t make sense for Nouns DAO to just give our Lil Nouns back or give them away at this stage. if Lil Nouns succeeds, Nouns DAO has asymmetric upside on the 10% of the project we own. also, if we give away our ownership stake, Nouns DAO has less incentive to see Lil Nouns succeed

so my point is that i believe Lil Nouns will succeed, im just as bullish as you, and for that reason i think it would be foolish for Nouns DAO to give away its interest in Lil Nouns

That’s fair. Appreciate your feedback, 22.

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I really think the best practical solution is zero governance from Nouns to Lil, for the reasons already mentioned; just think that if there’s real governance appetite, trustless is what I would aim for

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Given the heated discussions I’ve seen in the discord, I think Nouners should game plan utilizing their voting power to try and help clear up some governance concerns they have there or delegate their authority to a couple Nouners to go and be active in the community to that effect. I’m sure some Nouncillers would be interested in taking on a project like that as well if there wasn’t any interest from the Nouners. Just a thought.

The complexity of the issue is appreciated greatly over here in the FOODNOUNS prep kitchen. As we finish art and move closer to launch we continue to appreciate the clear decision made previously in regards to our future distribution, specifically 25% liquid ETH auto transferred to NounsDAO treasury, three times a day, forever.

This is the model we have chosen. It may not be for all projects, but we are proud to be an example of a frictionless, admin free subDAO contribution. TBH, Lil nouns were the project that drove us to make our decision. With 1 click the landscape will evolve again.

We offer this as merely a point in the conversation. Frictionless and admin free is our only recommendation in regards to the decision that both DAOs face.

We love all Nouns and nounish extensions. Thank you for blazing trails.

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I appreciate everyone’s feedback. I think this is a workable solution – let me know your thoughts.

  • lil nouns owns 6 Nouns. They govern those nouns through a sub-group called League of Lils comprised of four lil nouns holders that were elected and serve 3 month terms. League of Lils studies Nouns DAO proposals, gathers consensus from lil nouns holders, and votes lil nouns Nouns in Nouns DAO.

  • Nouns DAO owns >355 lil nouns. Governance of those lil nouns internally would be difficult, delegation introduces the politics of who to delegate to, and giving them away disrupts the incentive mechanism set up by the Nouns DAO reward from lil nouns.

  • Proposal: Delegate lil nouns owned by Nouns DAO to League of Lils. This results in (1) the Nouns DAO lil nouns being used in governance (a good thing as it makes the lil nouns protocol less centralized by having Nouns DAO lil nouns votes cast in a manner reflective of the broader community), (2) eliminates the politics of delegation as delegation is made to a group that lil nouns formed and can change (i.e., change the members of League of Lils), and (3) preserves the incentive mechanism by keeping ownership of the Nouns DAO lil nouns within Nouns DAO.

Please let me know your thoughts.

sounds interesting. one thing worth considering on your end is that, if Nouns delegated our Lil Nouns votes to the League of Lils, those 4 people would control 10% of the Lil Nouns vote and gain considerable power over Lil Nouns. in that sense it might not make things more decentralized