TL;DR
This recent proposal has many valuable ideas that we should build on to further improve and empower the ENS Foundation as the DAO’s accountability and strategy layer, with a world-class independent board. The main changes:
- Custody stays with the DAO. Treasury, operational wallet, ENS holdings, endowment, and all protocol control remain in DAO contracts.
- A world-class, strategic, and independent board. 1 ENS Labs seat plus 4 independent directors, to be able to keep all entities accountable, sourced by a DAO-ratified search committee that recruits operators who have built and run open-source infrastructure and large organizations at scale.
- Allocation under a DAO-set cap. The Foundation proposes the DAO’s operating spend within an envelope that the DAO votes each year, and can be overridden, clawed back, or defunded at any time.
- Lean budget. ~$1M/yr operating budget; any increase requires a DAO vote.
- Aligned pay. Directors are paid a higher cash compensation to attract high-caliber talent and ENS that gets distributed at the end of the term and stays vested for 12 months afterward, so the board is itself a long-horizon token holder.
In corporate governance, the board of directors provides oversight on the company on behalf of the shareholders. We can make ENS win and grow by drawing on good practices coming from centuries of knowledge and adapting them to our context.
1. The problem
ENS is critical internet infrastructure operating at scale: a protocol valued at half a billion dollars (and several times that in past years) and a DAO treasury of $100M+ (in ETH and stablecoins) and millions of users. An asset base and a mandate this size need accountability and strategic management that token voting alone does not provide. Three problems stand out.
1. No real accountability. What accountability exists today is delegates approving or rejecting spending one vote at a time, without the experience, time, structure, or incentives to evaluate it properly. No independent body reviews all funded entities against outcomes, identifies gaps, or holds anyone accountable for performance.
2. A strategy and management gap. The DAO has no vehicle for long-term, multi-year strategy and no concentrated bench of people who understand how organizations at ENS’s scale are built and run. Decisions tend to optimize for individual entities and single budget cycles rather than for ENS as a whole, over a multi-year horizon. Delegates try to do it, but we need a more formal and dedicated structure.
3. Revenue and sustainability. At the same time, protocol revenue has been declining. The yearly run-rate (~$5.1M), based on last quarter, is roughly one-third of total DAO spend (~$16M) and roughly half of the DAO’s development funding to ENS Labs (~$9M). This is not a criticism of any funded entity. It is a structural reason the DAO needs to change, aimed at long-term sustainability and accountability to continue growing.
A small, independent board addresses all of this. It is the accountability layer the DAO lacks, staffed by people with the experience and the structure to evaluate spend. It brings operators who have built and scaled organizations of comparable scale and importance, so strategy is set by people who have done it and optimizes for ENS overall rather than any single entity. And a credible, professional board lends ENS legitimacy in its institutional and policy work (ICANN, IETF, W3C, and the pursuit of recognition), where counterparties expect to engage a serious, accountable governing body.
2. Custody and protocol stay with the DAO
The protocol (contracts, pricing, fee structure, root key) and the treasury remain entirely under token-holder control, in DAO-governed contracts. The Foundation:
- custodies no protocol funds: not the operational wallet, not the ENS token holdings, not the endowment;
- holds no protocol authority: it cannot upgrade contracts, change pricing, or touch the root;
- cannot vote, delegate, lend, or pledge any ENS tokens it holds.
The Foundation is non-custodial by design. Token holders gain an accountability layer without surrendering control.
3. What the Foundation does: allocation under mandate, not control
The Foundation is the accountability layer for DAO spending. Its authority is a delegated allocation mandate, bounded by three hard limits that keep it short of control.
The mandate. Each cycle, the Foundation allocates the DAO’s operating spend across the DAO’s structure (currently ENS Labs, Service Provider streams, and Working Groups) and publishes the rationale for each allocation. Because the board is an independent majority with Labs in the minority, no funded entity sets its own budget: an independent body does, in the open. That is the accountability the DAO lacks today.
The three firewall limits (allocation, not custody):
- The DAO caps it. Token holders ratify the Foundation’s annual spending. The Foundation allocates within that cap and cannot exceed it.
- The DAO custodies it. Funds never leave DAO-governed contracts. The Foundation directs disbursement; it never holds the treasury (as it is today).
- The DAO can reverse it. Token holders retain the standing power to override a specific allocation, claw back, decline to renew the mandate, and remove directors.
If the DAO dislikes how the envelope is being spent, it caps it lower, overrides the allocation, or replaces the board, none of which requires unwinding a treasury transfer, because there is none.
4. The board: one permanent Labs seat, four independent directors
- Five voting seats: 1 ENS Labs permanent seat + 4 independent directors. Independents hold a decisive majority.
- Terms: two-year terms, with renewal and removal authority held by the DAO over every independent seat.
- Chair: always an independent director, never the Labs seat.
4.1 The bar: world-class, strategically aligned operators
The board’s job is to steward ENS as what it is: open-source, public internet infrastructure operating at scale, in the naming and identity space. Directors are sourced against that reality, for strategic alignment with ENS and the least conflict of interest possible. Selection criteria:
- Experience building or stewarding open-source and public internet infrastructure at scale, such as registries, certificate authorities, browsers, or protocols that many people and applications depend on (for example Mozilla, Let’s Encrypt / ISRG, Cloudflare, or the Linux Foundation).
- Management experience running large organizations and multiple teams, matching the scale, coordination, and operational complexity ENS now carries.
- Domain-industry and consumer-facing naming or identity experience: the naming and registry industry (for example Verisign, PIR /
.org, or ICANN-accredited registrars such as GoDaddy and Namecheap) and consumer identity or authentication products used at scale (for example Okta or Auth0). Directly relevant to ENS’s.ethand TLD ambitions. - Financial and fiduciary acumen appropriate to overseeing a nine-figure ecosystem.
We need a board of people who have built and run infrastructure and organizations of comparable scale and importance with strategic value to add.
4.2 Terms, tenure, and departure
- No hard term limit. The DAO renews or replaces each seat at the end of its two-year term.
- To define (with legal counsel): the exact renewal mechanics and whether seats are staggered so the board does not turn over all at once. This needs precise drafting in the Foundation’s governing documents and is flagged here as open, not fixed.
- Compensation cadence: the cash retainer is paid monthly. The ENS grant is distributed at the end of each term, using the average price of 2 years and a 12-month linear vesting.
- Resignation process: 30 days’ written notice for resignation. On departure, the ENS grant is distributed, using the average price of the period the board member served and a 12-month linear vesting (§7).
- Vacancies: an independent seat is filled by the standing nominating process (seated independent directors recruit, the DAO ratifies); the Labs seat is re-named by Labs.
- Removal: the DAO retains full authority to remove a director through the normal DAO voting process.
5. The Executive Director
The board oversees; the Executive Director runs the Foundation day to day, hired by and accountable to the board.
Not a board seat. The ED attends and drives the agenda but does not vote, keeping the board a clean 1 Labs + 4 independent oversight body and keeping one executive from both proposing and approving the spend. The board holds sole authority over the ED’s hiring, evaluation, pay, and termination by resolution.
Scope. Within board-set strategy and the DAO-capped envelope, the ED leads: standards and mission advocacy (ICANN, IETF, W3C, namespace recognition); protocol-layer legal posture (legal-process triage, trademark and brand enforcement); the grants program (cohort sizing and awards against board priorities); allocation diligence (reviewing funded entities against outcomes to inform the board’s allocation); and Foundation operations and reporting. The ED proposes; the board decides allocation. Allocation authority never leaves the board (§3).
Hired after the board seats. The ED is not on the inaugural slate. The seated board’s first act is an ED search, so the ED is accountable to the body that can remove them rather than a peer of their overseers.
Pay and conflicts. Board sets ED compensation by resolution, benchmarked and disclosed in audited financials; the §6 conflict-of-interest policy applies from day one.
6. The selection process
Both independence and board caliber come from how directors are chosen: the DAO ratifies a search committee, the committee recruits world-class candidates through outreach, and the DAO ratifies the resulting board slate.
6.1 The search committee (5 members)
- 2 DAO delegates, for legitimacy, token-holder representation, and high context.
- 2 independent operators with executive-search reach and networks in consumer, identity, and internet-infrastructure, so the committee can find world-class candidates rather than choose from who is already in the room.
- 1 ENS Labs seat, voting but a structural minority (the 2 delegates plus 2 operators outvote it 4-to-1). Labs contributes product and protocol context and candidate intros and votes as one voice; it cannot drive the outcome.
How the committee is seated: the proposal will be edited to put forward a complete named committee slate, each name accompanied by a public rationale, and the DAO ratifies it as a single slate (and may reject it, forcing a revision).
Call for names. Multiple delegates are actively sourcing candidates, and this thread is open for suggestions, both for the search committee and, for the committee’s later consideration, for the board itself. Names raised here are informal input, not appointments; the committee slate is still ratified by the DAO as above.
6.2 The committee’s work
- Define the candidate profile against the §4.1 criteria.
- Run outreach and active recruitment first: source, interview, reference-check, and negotiate with world-class candidates.
- Bring a board slate (the 4 independent directors) to the DAO for ratification, with a written rationale per director.
- ENS Labs names its single board seat separately.
The written conflict-of-interest and recusal policy should be provided by the board member candidate in the selection process, so the committee has visibility to make the best decision.
The DAO ratifies (or rejects) the board slate. The committee dissolves once the inaugural board is seated; a standing nominating process (run by the seated independent directors, DAO-ratified) handles future vacancies and renewals on the same outreach-first principle.
6.3 Timeline
The search committee is constituted immediately on passage of the implementing proposal, and sourcing of both committee and board candidates is already underway. The exact timeline is to be determined.
7. Board compensation
Directors are paid ~50/50 in cash and ENS. The level is deliberately competitive: to attract and retain the world-class operators described in §4.1, the Foundation pays well, treating compensation as an investment in finding and rewarding a quality director who can move the needle for ENS. The cash amount is benchmarked against comparable operating boards (Mozilla and other companies with access to equity/token compensation). The ENS half makes directors long-horizon token holders.
| Per year | Cash (USDC) | ENS grant | All-in |
|---|---|---|---|
| Independent director | $60k | ~$60k | ~$120k |
| Independent chair | $80k | ~$80k | ~$160k |
| ENS Labs seat | $0 | $0 | $0 |
| Board total | ~$260k | ~$260k | ~$520k |
ENS grant terms. Is distributed at the end of each term, using the average price of 2 years and a 12-month linear vesting. If an exit occurs, the distribution occurs immediately, using the average price of the board-serving time and a 12-month linear vesting.
Guardrails. Compensation is DAO-ratified (the board never sets its own pay), disclosed per director, and capped; a written conflict-of-interest and recusal policy.
8. Foundation budget
The Foundation’s own operating budget is ~$1M/yr, covering:
- board cash compensation (~$260k);
- operational hires as needed;
- legal counsel (legal process, trademark and brand);
- standards and policy advocacy (ICANN, IETF, W3C).
Lean by design. Any increase requires a DAO vote.
9. Transition
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Existing directors of the ENS Foundation serve until the new board slate is ratified, then hand over.
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From the moment it is seated, the board holds all funded entities accountable, including ENS Labs, Service Providers, and Working Groups. Even with some mechanics still being settled, having one independent body keep everyone accountable is an immediate benefit.
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Coordination with the SPP committee to be defined. The Service Provider Program already has its own committee; how the board’s accountability and allocation role fits with it (oversight, sequencing, who decides what) needs clearer definition and is flagged here as open, not fixed.
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Live commitments are honored: current Service Provider streams, steward terms, and active engagements run through their natural conclusion, so live work is not disrupted.
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The search committee is constituted immediately on passage of the implementing proposal; the inaugural board is targeted to be seated within one term cycle.
10. Foundation Design TL;DR
| Design choice | Why |
|---|---|
| Non-custodial Foundation (§2) | Treasury security and decentralization are non-negotiable. Token holders get accountability without surrendering control; nothing leaves DAO contracts. |
| Foundation budget defined by the DAO (§3) | Real teeth: an independent body, not the funded entities, sizes the spend, while the DAO keeps custody, the cap, and the power to reverse. |
| 1 Labs + 4 independent, DAO-ratified committee (§4, §6) | Independence and legitimacy both come from how directors are chosen; Labs has a voice (1 vote) but cannot seat its own overseers. |
| Operator bar (§4.1) | ENS is open-source infrastructure at scale, so the board should be people who have built and run infrastructure and organizations of comparable scale across many teams. |
| Independent, transparent allocator (§3) | All entities are reviewed by a single independent body, which publishes its rationale. |
| 50/50 cash + vested, locked ENS comp (§7) | Set competitively to attract world-class talent, with economic skin in the game, using ENS token vesting. |
| Written conflict-of-interest policy (§6) | Disclosure and recusal rules give credibility with token holders and the institutions ENS engages. Ensures a cleaner decision-making process. |
11. Open questions
Items still to define before the final state of proposal, several with legal counsel:
- Executive Director. The exact scope, authority, and compensation of the ED role (§5), to be finalized by the board once seated.
- Is ~$1M/year a reasonable amount? Whether the operating budget adequately funds allocation diligence, legal, and advocacy. Should be larger or smaller? Any increase requires a DAO vote (§7).
- Term and renewal mechanics. Term limits, whether seats are staggered, and the renewal process (§4.2), to be drafted with legal counsel.
- Conflict-of-interest policy. The specific policy text and recusal rules (§6).
- Board operating rules. Quorum, the voting threshold for board decisions, tie-breaking, and meeting cadence, to be drafted with legal counsel in the Foundation’s governing documents.
- Board accountability. How the board itself is held accountable beyond the DAO’s standing power to remove directors: reporting cadence, published metrics, and audited financials.
- Amend sections from the recent proposal. The “Mission Driven Advocacy” section and “Foundation holding the trademarks and licensing the brand” ideas from the previous proposal are great and should be properly merged. To be drafted with legal counsel.
Acknowledgments
This proposal was reviewed and edited by multiple delegates. It’s a collective contribution. It’s the result of multiple conversations that have happened since the first foundation proposal was published, back in March. Thank you for the conversations, the pushback, and the shared conviction that ENS can be both more ambitious and more accountable.