- The illiquid nature of Nouns + mainnet transaction fees prices out most people who want to participate in governance
- Real world adoption of Ethereum will happen on layer 2s
- Participation in NounsDAO is currently not possible on layer 2s
- Coinbase is about to onboard over 100 million people to Base
Pixels solves these problems by offering a protocol for fractionalizing Nouns in the form of an ERC20 that exists entirely on Base (layer 2) while providing a seamless and trustless interface for interacting with NounsDAO governance on mainnet.
How does it work?
The Pixel Protocol works by utilizing LayerZero to send cross chain atomic messages to contracts that exist on both mainnet and Base. A full diagram of the protocol can be found here.
There are 2 contracts on mainnet
- Noun Vault
- PixelDAO Relayer
And 2 contracts on Base
Noun Vault & $PIXEL
The Noun Vault works by allowing Nouners to deposit Nouns on mainnet in return for 1 million $PIXEL on Base. Furthermore, a Noun can be withdrawn by burning 1 million $PIXEL. This value remains fixed and is the only way Nouns can be deposited and withdrawn from the contract.
The Noun Vault also adds the ability for Nouners to perform trustless swaps with other Nouns stored in the contract. A small, but notable added value proposition.
Just like that, we now have pool of fractionalized Nouns in the form of $PIXEL on a layer 2 (Base). This method strips away the fungibility aspect of Nouns making it easier and cheaper to acquire voting power since ERC20s are divisible for up to 18 decimals. However, this process has removed the ability for the Nouns stored in the vault to be used in governance. Enter…
PixelDAO & PixelDAO Relayer
PixelDAO (Base) is a governance structure that mimics NounsDAO while providing new ways for people to participate in governance that aren’t currently possible.
Since 1 Noun = 1M $PIXEL, we know that 1M $PIXEL = 1 vote and 2M $PIXEL represents enough voting power to create an onchain proposal.
For people with >2M $PIXEL, proposals can be relayed directly to NounsDAO. For everyone else, the PixelDAO contract provides a “Crowdsource Proposal” function. This function allows any $PIXEL holder to create a proposal and provide initial voting power. Anyone else with $PIXEL can add their voting power to help push the proposal to the 2M $PIXEL threshold and relay it to NounsDAO.
Voting with $PIXEL works almost the same way as creating proposals. Just like NounsDAO, PixelDAO allows $PIXEL holders to vote “For”, “Against”, or “Abstain” on any proposal. However, there is a slight problem with this. We can’t vote with 1/n of a Noun. To solve this, we create a queue for each vote type with the threshold of 1M $PIXEL. When this threshold is reached, the vote is relayed to NounsDAO and the queue for that vote type is reset.
*Note: While the PixelDAO governance structure could include many more features and introduce new methods of voting, it is intentionally left simple. PixelDAO is meant to be a simple interface to NounsDAO on layer 2. Builders are free to create their own governance abstractions on top of PixelDAO for more complex and interesting governance models.
The PixelDAO Relayer (mainnet) is really simple. We delegate the Nouns from the Noun Vault to the PixelDAO Relayer and relay cross chain governance messages via LayerZero.
Thats it! We now have real liquid NounsDAO voting power on layer 2 (Base). But…
There are many layer 2 solutions to choose from on Ethereum, so why choose Base over something like Polygon or Arbitrum? The answer is users, network effects, and future proofing.
Coinbase has over 100 million users that are about to be onboarded to their layer 2 scaling solution, Base. That is over 100 million more people that can be onboarded to Nouns and participate in governance regardless of networth.
Base was built on top of the OP Stack, a set of composable modules for creating layer 2s on Ethereum. Optimism’s goal with the OP Stack is to create a solid foundation for an interoperable set of layer 2 solutions that they call the Superchain. Because these layer 2s are all built on top of the same framework of composable modules they are able to eventually reach a state where interaction between contracts on different OP Stack chains happens seamlessly at the protocol level. The network effects of this are huge as, in the future, chains like Optimism or other OP Stack layer 2s can all interact with $PIXELS and PixelDAO without fractionalizing liquidity due to bridging.
Another massive added benefit of Optimism’s OP Stack is its ability to work with composable modules. This means that modules like the Settlement Layer (optimistic fault proofs, zero-knowledge proofs, etc…) can be hot swapped in and out at will. For example, when a working ZKP Settlement module becomes available, Base could swap out their Fault Proof Settlement module for a ZKP one making cross chain (L2 → mainnet) transactions happen almost instantly removing Pixel’s need for LayerZero altogether.
- A native liquidity token for props that give the recipients funding as well as voting power in the DAO
- Makes Nouns accessible to over 100 million Coinbase users
- Brings participation in Nouns governance to layer 2s
- Cheap layer 2 fees make it practical to “micro-fund” proposals or contributions (less than $10)
- Trustless Noun swaps
- Liquidity for purchasing or selling Nouns
- The ability to use DeFi applications while retaining the economic power of your Nouns
For $PIXEL Holders
- Participate directly in Nouns governance regardless of networth while enjoying low transaction fees from layer 2s
For Nounish Builders
- A platform for builders to create their own custom governance abstractions on top of Nouns
- Allows subDAOs to participate in governance and grow economic and voting power in NounsDAO without the inefficient and expensive process of acquiring Nouns
My name is Sam and I like to build fun web experiences! I have been doing development and design work as a hobby for almost 7 years now and working professionally in the web3 space for over 3 years. I currently am a contributor over at Nouns Esports working on the website. Some other work I have done in the Nouns space includes I’m Feeling Nounish (won 2nd place for the Prop House Hackweek developers round) and the website for Nouncil.
Is LayerZero safe?
Yes. Sending cross chain messages with LayerZero is not the same thing as bridging and does not include the same risks that are associated with bridges like Wormhole. At its core, LayerZero is just a messaging layer. Nothing more. It uses Chainlink oracles, the same tech used for price data with DeFi protocols like Aave, to transmit messages from any chain and validate their integrity with cryptography. It is important to note that LayerZero is not the endgame for Pixels. The goal is to eventually replace LayerZero with native cross chain messaging included with an OP Stack layer 2 chain that uses a zero-knowledge proof as its settlement layer.
If anyone has any feedback or questions regarding this proposal idea I would really appreciate it! Thanks!