TLDR
- the Ethereum community relies on public goods
- Venture funding isn’t aligned, we can do better
- the Nouns model might be a step forward, and Nouns DAO could lead the way
- What we could do right now: source and fund quality teams to ship valuable “ethereum hyperstructures”
- Provide $500K-$1M to 1-3 teams, to provide sufficient runway to ship non-trivial software
- Provide 1-2 months for people to organize and pitch big-enough projects
Aligned Funding
Many existing and future crypto-native projects do not have (or are better without) a revenue stream, e.g. Ethereum, Uniswap, Tornado Cash (), Gnosis Safe, and many more. Often such projects still raise VC money, when then pressures them into perverse moves like issuing a governance token to their investors, or having fee switches, despite the protocol being perfectly fine (and even better) without all that. Another kind of situation is VCs doing early investments without having any business model in mind, simply applying the web2 thinking of “we’ll invest in this great team and they’ll figure something out that generates ROI for us”; I suspect many of these teams won’t be able to raise their next rounds once their investors wake up and smell the lack of business model.
The Nouns model seems like a worthy experiment in solving this challenge. Anyone who wants to contribute to the creation and sustainability of public goods could leverage a memetic flywheel that (1) funds successful important public goods (2) grows its treasury thanks to its meme growth (3) goto 1. The brilliant Noun 40 recently started a discussion on such a fork.
Nouns DAO should lead
The point I want to stress is that Nouns DAO is the best group of people to run this experiment right now. Its outcomes can educate forks, and potentially strengthen their resolve and product-market fit, if proven successful. Furthermore, we seem to have consensus that Nouns DAO relies heavily on Ethereum thriving, so funding “ethereum hyperstructures” seems fully aligned.
In addition to being aligned, Nouns DAO is best-poised to execute right away, given its treasury size, the amazing set of humans on board, and the strong tools at hand like prop house.
Concrete execution suggestion
The critical ingredient is having exciting team-idea combos to fund. A mandated prop house can attract top talent and ideas, especially with sufficient lead time to organize. The grant size should ideally provide teams with a multi-month runway so they can achieve meaningful outcomes without having to chase additional funds; a range of $500K - $1M per funded team seems a reasonable starting point.
Potential execution steps
- Create a mandated prop house with 2-3 winners, each receiving $500K - $1M to build an Ethereum hyperstructure
- Proposal period should be at least a month, maybe with an option to extend another month if we’re lacking great content
- Activate a pod in the DAO with the purpose of sourcing the best people to propose their ideas (we’re lucky to have truly amazing humans on board with genius friends)
- Execute the prop house
- Potentially offer support to these teams in doing “building in public” type communication, to increase transparency for us, as well as proliferate our contribution to the community (eg the Nounish could help out)
- Possibly offer additional funding (via on-chain proposals) to teams we believe in that need more to get to a successful launch
The Tornado Cash fiasco was a great reminder of how important it is to have unstoppable public goods. Would love for us to double down on our intention to contribute.
Would love to hear more people share their take on Nouns <> public goods!
Thanks for reading
thanks @krel and @davidbrai for the awesome discussions last few days.