Nouns Proposal Auction House (or Prop House) is an experimental approach to deploying capital: an auction of ETH where the bids placed are proxy NounsDAO proposals. At the end of each auction, Noun owners (Nouners) vote on which proposal gets funded.
This proposal aims to be the MVP for a trustless on-chain solution.
The NounsDAO treasury is accruing capital at a $100M+ annual run rate. While NounsDAO has pushed several proposals through to execution, the current funding process does not seem like the optimal approach to scaling to thousands of projects. Prop House is an exploration of an alternative funding mechanism: forced treasury spend that minimizes friction to propose while maintaining quality via Nouns DAO member votes.
If the underlying thesis behind Nouns DAO is that the more a meme is spread, the more its provenance is worth, then spending the treasury to proliferate Nouns makes a lot of sense. Assuming there is ongoing supply of ideas to proliferate Nouns, Prop House aims to force perpetual spend to capture this supply.
Anyone who wants to build on Nouns is encouraged to do so. To this end, there is documentation and guidance to help builders get funded as quickly as possible. Still, proposing to the DAO involves friction. It means joining a new community, proposing an idea, getting sponsorship, achieving community consensus and more. The process can take a week or more before proposing on-chain which takes yet another week. Prop House could alleviate some of this friction by redirecting focus to the proposal itself instead of other functions.
Assuming that being able to amass the significant amount of capital required to buy a Noun is correlated to being a good capital allocator, NounsDAO members represent a pool of intellectual capital that could be used as a quality filter for the best use of the Prop House auction funds.
Funds requested from the DAO would be sent to a 2/3 safe controlled by cryptoseneca, devcarrot and Pixelz. The funds would be used to run three auctions of varying amounts and run times:
- 5 ETH with a 7 day proposal and 3 day voting period.
- 10 ETH with a 14 day proposal and 3 day voting period.
- 20 ETH with a 21 day proposal and 3 day voting period.
The differing amounts and run times are to test which scale (if any) is best suited for the format.
A web app will be built as the home for the project where both auctions and voting will take place. Auctions will run for their allotted time, allowing anyone to bid with a proposal. The consecutive voting period will have Nouners vote for the proposal of their choice. At the end of the voting period, the funds will be transferred to the proposal with the most votes.
This proposal requests a total of 36 ETH from the DAO:
- 35 ETH to fund three auctions.
- 1 ETH for operational spend
cryptoseneca, one of the Nouns project founders. I will be building Prop House alongside devcarrot (Nounder) and Pixelz (designer) with help from the rest of the Nounders.
Prop House aims to be the MVP of a trustless on-chain solution. If the experiment succeeds, the next logical step would be to build an unopinionated suite of contracts that automate the process.
Conceptually, the contracts could be the seed to a crypto native Y Combinator model. Where as before you had partners, now you have DAO members. Instead of summer and winter batches, you have weekly or monthly cadences. And instead of demographic restrictions for applicants, you have anyone with an Ethereum wallet. It might be the case that breaking thresholds in the categories mentioned above transforms the model to something completely different.
Proposals that further proliferate Nouns onto the world while accurately representing the Nouns culture.
While assurance of proposal execution is not possible, we can minimize the risk by putting the funds into the hands of credible bidders. Just as the Nouns iOS and Apple Watch apps team were funded 100 ETH without hesitation, we can rely on social reputation, relevant experience and other norms to maximize the chance of seeing the proposals through to proper execution.