Introducing Nouns Fork: A Last-Resort Minority Protection Mechanism

Forking is the crypto-native way for groups of token holders to exit together into a new instance of their protocol, resulting in maximal conservation of momentum in the ecosystem; famous examples include the Ethereum Classic fork and the Bitcoin Cash fork. We believe it’s time to enable DAO forks as well, starting here at Nouns.

Empowering DAO Forks for Protection and Innovation

To date, there has been no DAO version of forking, but it is needed. How can we protect a minority against a tyrannical majority? Or, in less extreme cases, how can groups amicably part ways on a conflict of visions? Ragequit has been used in some cases, allowing individuals to leave with a pro rata share of the treasury, but it comes with a variety of legal and incentive risks, e.g. overemphasis on individuals.

Introducing Nouns Fork: The Solution

Today we’re excited to share a solution Nouns has been working on: Nouns Fork. In our model, any token holder can signal to fork (exit) in response to a governance proposal. If a quorum of 20% of tokens signals to exit, the fork will succeed. We discuss further below.

Getting Familiar with Nouns Fork

We encourage Nouners and delegates to familiarize themselves with Nouns Fork in anticipation of the upcoming upgrade proposal once the feature is complete and audited. Please reach out with questions and feedback, so we can make sure to fix any bugs in the design or how it’s communicated. We’ve been careful to minimize the scope of this initial version for the sake of shipping fast; there’s ample room for improvement in future versions.

How Nouns Fork Works

Nouns Fork introduces a new forking user flow. This flow enables Nouners to start a fork as soon as the Fork Threshold is reached. The feature operates in one of two states: (1) Escrow Period and (2) Forking Period.

Escrow Period: The Beginning

Forking Period: Moving Forward

Fork DAO Initial Configuration

Before diving into the fork initial configuration, it’s important to highlight all fork DAO contracts are upgradable, giving its token holders full freedom to adjust code and parameters through proposals. For more technical details you’re invited to read this spec.

FAQs: Answering Key Questions

Q: What happens to the tokens that were escrowed?

A: Once the fork happens, the DAO can transfer them to any account it chooses to, including an auction contract, individuals’ accounts, etc. Tokens held in the escrow contract or in the treasury contract are excluded from total-supply-dependent calculations, e.g. proposal threshold and quorum.

Q: What about NFTs in the treasury, e.g. LilNouns?

A: They are kept in the original DAO’s treasury. Future versions may introduce some fair forking mechanism, e.g. random permutations.

Q: Why the big change from the previous design? Why do owners fork and not delegates, and why can’t we tie a fork decision to a vote?

A: We had a wrong assumption. Nouns token delegation doesn’t store which Nouns are delegated to each account, so we can’t identify which Nouns participated in each vote. Moreover, the action of forking seems more appropriate for owners, as it involves transferring their Nouns.

What’s Next: The Road Ahead

There’s still time for feedback! Please let us know if you identify any problems or if you have better ideas.

We’re already coding this design and are in touch with auditors; next we’re planning to run a bunch of tests, get it audited, and finally submit a proposal to upgrade the DAO to this new version.

Also you can read their official announcement article on mirrorxyz platform through here.


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