During the last MetaGov call, we discussed how ENS DAO should approach token airdrops and whether participation in other DAOs should be done.
The group agreed this is an important topic that deserves broader community input, which is why I’m bringing it here for open discussion.
Context
Syndicate (https://syndicate.io/), an Infrastructure for scalable, programmable, atomically composable appchains, recently launched its token, $SYND. The team airdropped allocations to 100+ reputable DAOs, treasuries, and organizations across Web3, including ENS DAO, to build a “community-owned Internet” as they described their mission (see full list of recipients).
This post seeks community input on:
What should be done with the $SYND tokens after the ENS DAO wallet claims them?
Broader question on whether ENS DAO should actively participate in governance of other ecosystems (when invited, aridropped, diversified in, or an opportunity presents itself).
Questions and Options
What should ENS DAO do with the $SYND tokens received?
Do nothing: ENS does not claim or engage, keeping focus strictly on ENS.
Claim and hold: Treat $SYND tokens as treasury diversification, but do not participate in governance.
Claim and sell: Claim and sell $SYND tokens immediately.
Delegate: Claim tokens and delegate governance rights to an individual, steward, or MetaGov Working group.
Active participation: ENS DAO claims and directly votes/engages in Syndicate governance, setting a precedent for active external governance.
Redistribution / Public goods: Consider transferring or using the tokens to fund aligned initiatives, other DAOs, or ENS public goods work.
Should ENS DAO actively participate in other ecosystems’ governance?
What should the criteria be for participation: alignment with ENS mission, size of allocation, reputational benefit, etc.?
Should ENS DAO develop a policy framework for handling governance tokens received from other projects (airdrop or otherwise)?
If ENS DAO does participate, how should delegate authority be structured?
Another working group, elected individual, service provider, or delegated to the MetaGov working group (representative democracy)?
Pros and Cons
Pros
DAO-to-DAO Diplomacy → Builds stronger ties with DAOs, signaling ENS DAO is an active, collaborative player in the Web3 ecosystem.
Strategic Influence → Gives ENS a voice in shaping protocols that may directly or indirectly affect naming, identity, or ENS integrations.
Treasury Diversification → Adds other assets that could strengthen ENS DAO’s financial position over time.
Reputation & Visibility → Shows ENS DAO as a leader that engages beyond its borders, reinforcing legitimacy in governance circles.
Network Effects → Opens doors for partnerships, integrations, and co-initiatives with aligned DAOs/projects.
Precedent for Collaboration → By accepting and participating, ENS sets a standard that other DAOs may follow.
Cons
Mission Creep → Risk of spreading ENS DAO’s limited attention away from its core mandate: naming and identity.
Operational Overhead → Tracking external proposals, coordinating votes, and collecting DAO feedback for voting requires time and effort.
Political Entanglement → Participation in another DAO’s debates could drag ENS into conflicts or reputational risks.
Value Volatility → External tokens may be highly speculative, adding financial or reputational risk if their governance falters.
Call for Feedback
Inviting everyone to share their perspectives on this.
How should ENS DAO approach the $SYND allocation specifically, and what guiding principles should shape our handling of governance tokens from other projects more broadly?
This post is intended solely to continue the discussion from the MetaGov call. Thanks to @estmcmxci and @Meta-Gov_Stewards for comments and discussion.
Thanks for opening this up for wider discussion.
I think it’s really important that the community gets to weigh in on this kind of decision.
For me, the $SYND allocation raises two separate but connected questions: what we do with these tokens in the short term, and what kind of precedent we want to set for the long term.
On the $SYND specifically, I lean towards claiming and holding rather than selling straight away. It feels premature to sell something that was intentionally given to ENS as part of a broader attempt to build DAO-to-DAO relationships. Even if we don’t end up using them actively, just holding keeps the door open.
The bigger conversation, though, is whether ENS should get involved in other DAO ecosystems at all. Personally, I think it makes sense if and only if, there’s a clear connection to ENS’s mission around identity and naming, or if the relationship could strengthen our ability to serve users. Otherwise, we risk spreading ourselves thin.
If we do decide to participate, I’d prefer a structured approach where tokens like these are delegated to a steward, working group, or even an outside delegate who reports back. That way ENS can have a voice without dragging the whole DAO into day-to-day debates in other communities
Bouncing off of @GozmanGonzalez response. Short term, keep the tokens although I understand if it puts extra burden tax wise on the DAO. The last thing we would want is ENS getting stuck with a big tax bill because everyone starts airdropping tokens to it.
Long term, my personal opinion is the protocol and work/mission ENS is on requires partnerships. If there are no people, agents, apps and smart contracts to name then we have nothing.
There are two methods I could see this happen. This is an EXAMPLE. One is the individual users (@Limes) can buy a Noun and partakes in Nouns. In that capacity, Limes is an individual and as long as he doesnt let his voting in Nouns deter from his duties to ENS I don’t see much of an issue other than he recuses himself from COI props. Sorry for using you as an example Limes!
The second method would be a more formal partnership or commitment from ENS DAO. Not sure what that model looks like, I know the idea of another working group makes people flinch (not saying this is the solution). Adding extra responsibilities to an existing group can also be an issue.
Long winded way of saying, I do think ENS would benefit from this type of collaboration.
On the question of whether the ENS DAO should actively participate in the governance of other ecosystems:
Here’s one way the DAO can participate in the governance of another ecosystem right now:@Meta-Gov_Stewards spin up a new multisig, purchase a Noun using this multisig, and then they vote on this proposal: gg @gramajo, @jkm.eth.
Not sure how that affects the planned incentives in the upcoming [TEMP CHECK] ENS Contract Naming Season prop; nonetheless, it could serve as a low-lift experiment with potential positive externalities.
Claim and transfer them to the endowment, just like we’re doing with SPK as part of this proposal (I’ve already suggested it be bundled). Kpk should do as they see fit with them on behalf of the DAO, in accordance with the endowment rules.
No, for the sake of mission creep and operational overhead.
Similar to @gregskril, I’m not in favor of creating additional complexity to participate in a protocol that cold-airdropped us tokens. If there was misson/constitutional alignment critical to the success of ENS I would reconsider this opinion.
I’d prefer keeping the tokens idle (no interaction) in the treasury wallet rather than moving to endowment. Keeping them untouched/unsold seems like a good faith gesture on our behalf if we’re choosing not to participate.
Just an FYI the issues being discussed here re: DAO tokens & participation create the very legal risks which I previously analyzed vis-a-vis assets ENS DAO owns in the endowment (both with & without voting rights/participation in underlying DAOs/protocols). See: DAO Governance Threat Identification & Proposed Mitigation
While it doesn’t seem any action was taken in response to my prior legal risk report, it should be noted that without the proper legal analysis & basic legal protections (i.e. holding companies/legal wrappers to isolate 3rd party tokens and/or DAO participation) ENS DAO is unnecessarily risking 100% of its assets across all ENS wallets including the treasury; therefore, control of DAO governance & the protocol.
I’ll further note, in one of the two cases I cited the court found holders of tokens in unwrapped DAO to be partners of a general partnership creating joint and several liability on passive token holders for actions of the DAO.
Re: Syndicate, on a preliminary review of their terms they seem to operate as Syndicate Inc. (a “legal wrapper within the meaning of the case law), but it’s not clear if the corporation wraps the DAO/DAO token or just their services. If this corporation “wraps” Syndicate DAO, ENS would then be subject to the those terms, including indemnification of Syndicate, a Delaware governing law provision, and a ADR provision (mediation).
It’s relatively easy and cost effective to protect ENS DAO even in the instance ENS wanted to actively participate/vote in another DAO, but it’s even easier to get it wrong and create unmitigated legal risk such as the asset(s) I highlighted in my prior risk report. While “doing nothing” with an airdrop to the treasury wallet may seem like it’s the safest course of action, ENS DAO should discuss the potential risks of doing nothing with their counsel.
Seems like the consensus is that ENS DAO should not participate in protocols that cold-airdrop tokens, unless the airdrop is mission-critical or aligned with the ENS Constitution. Is that fair to say?
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Cap’s post specifically refers to the recent $SYND airdrop, which, based on the prevailing consensus, should remain idle for now.
That said, I’d like to invite delegates to consider how ENS DAO might engage with other ecosystems in ways that are both mission-aligned and low lift, perhaps through representative participation or collaborative initiatives.
The Nouns DAO proposal I mentioned above is just one example. I believe @conor has also compiled a valuable list of other ecosystems where similar, mutually beneficial proposals could be explored.
@ENSPunks.eth are you suggesting that the current ENS Foundation structure doesn’t already provide those legal protections?
Think of how the ENS Foundation provides protection to ENS token holders…
When the ENS DAO is the token holder in a DAO the ENS Foundation is immaterial to protecting ENS from potential liabilities of 3rd party DAOs, the analysis shifts to if the 3rd party DAO has a legal wrapper that protects ENS as a token holder. In other words, do these DAOs offer ENS at least the same protection as a token holder the ENS foundation offers ENS token holders?
If ENS holds tokens in unwrapped DAOs, then ENS is unnecessarily creating an unmitigated potential legal liability that includes all ENS’ assets.
I provided the case law on point and proposed mitigation in the legal risk report and mitigation strategy I previously published.
Okay — definitely something @kpk should address. As Endowment managers, they probably have the best understanding of the DAO’s exposure. It’s worth tracking the DAO’s positions here.
My question was more about whether the DAO’s current legal wrapper is sufficient to protect participants (like you and me) from the kinds of risks you’ve previously raised in your report.
The ENS Foundation, or “legal wrapper”, provides at least some form of limited liability protections to the $ENS token holders. ENS owning tokens/participating in another DAO would not generally affect those protections to the token holders (ie you and I).
ENS token holders → protected by ENS Foundation wrapper
ENS DAO holding other DAO tokens → ENS DAO is NOT protected (unless those other DAOs also have legal wrappers)