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Nouns is a tokenized community.
Tokenized communities are meme-driven capital allocation machines that grow more valuable as they fund community projects. While they may be governing a protocol or supporting some centralized business, the primary function of a tokenized community is the incubation and funding of community projects.
Looking at Nouns DAO, there is a lot to be excited about. The elegance of the "one NFT a day, forever" protocol can't be denied, and it is a constant revenue generator. 100% of the revenue goes to a community governed treasury, something that most NFT projects wouldn't ever consider. The art is fun and accessible. The community is possibly the most active in the entire DAO ecosystem and is building some really cool, ambitious stuff.
Nouns DAO's goal is to propagate the meme, and they're doing a fantastic job of it.
Some folks claim that the Nouns model will revolutionize DAOs – that hundreds or thousands of new Nouns forks will be created over the next few years. Clearly, this is the DAO model we've been waiting for!
Nouns forks have yet to prove that they can survive in the long-run:
- Lil Nouns DAO lacks unique direction and will probably be increasingly damaged by Nounlets and other fractional governance opportunities in the OG DAO.
- Gnars DAO and other derivatives with their own missions are auctioning off NFTs for $20-$30 a piece at a much slower than expected rate, with floor prices dropping disproportionately faster than OG Nouns.
Honestly, it's not obvious that the Nouns X-a-day model is sustainable for any organization outside of Nouns DAO itself. The novelty of the Nouns experience – and the instant social and financial capital that the project received due to its founders – are large pieces of the equation.
The gift and the curse of Nouns DAO is that the only goal of the DAO is propagating the meme, but the meme is meaningless. "Nounishness" is a reflection of Nouns builders, and thus the meme can make room for an increasingly large TAM.
The minute that Nouns, or any other organization, decides to stand for something of substance, they limit their TAM – they cannot simply grow forever, and will be much more open to ideological forks.
This isn't a bad thing!
My point is that the X-a-day mint model works well for the Nouns meme, but not every meme grows the same or needs to be monetized in the same way. There are other business models that exist to turn memes into money – daily NFT auctions are just one way to do that.
Okay, back to tokenized communities.
I think the primary reason Nouns is exciting to people has nothing to do with the mechanics of the DAO.
Instead, it's because Nouns is the first project that focused on allocating a large treasury toward community projects in a completely community governed way. In other words, Nouns is the first well-resourced tokenized community.
But there will be many, many more. I (biasedly) believe some of the most powerful organizations in the world will be tokenized communities. These communities will create new avenues for advocacy, patronage, public goods funding, and much more.
Nouns DAO's gift to the world wasn't introducing the one-a-day NFT auction – it was opening people's eyes to the power of a community-run treasury funding community-run projects.
This is Forefront's entire thesis: that projects are the core primitive of tokenized communities, and what people are really excited about is the opportunity to build cool stuff with their friends. Tokenized communities are the foundations of the new internet. We need more blueprints for building sustainable organizations that create alternative economic models for creators, founders, builders, and beyond.
Nouns DAO is exciting because it is a tokenized community. Let's build some more.