[Temp Check] ENS DAO Investment in OpenBox Inc

[Brandley]

Proposal Summary

This proposal invites the ENS DAO to invest $1 million/ year over five years ($5 million total) for a 10% equity stake in OpenBox Inc. The investment gives the ENS community direct exposure to the 2026 ICANN gTLD round and, if approved, marks the DAO’s first investment‑for‑equity program.

Proposal Overview

This Temp Check seeks DAO feedback on a strategic proposal for the ENS community to take an equity stake in OpenBox Inc., a new venture launched by Intercap — the team behind .box, .inc, and other innovative naming projects.

OpenBox’s mission is to bridge DNS and ENS through the creation of the Open Domain Protocol (ODP). This open-source layer allows DNS top-level domains (TLDs) to integrate natively with ENS and the broader Ethereum ecosystem. ODP is the same core technology that powers the .box <> ENS integration announced here, and it will also be integrated into Namechain.

OpenBox will be the legal entity that:

• Builds and evolves the Open Domain Protocol (ODP);
• Acquires and operates key ICANN gTLDs in the 2026 round to advance ENS-native identity;
• Partners with brands and communities to launch ENS-compatible gTLDs onchain via ODP.

OpenBox Inc. has secured a $45 million capital commitment from Intercap and believes that this ENS investment is a strategic long-term positioning that is mutually beneficial.

Motivation

ENS is the leading naming system for web3, but the broader identity landscape remains fragmented. Across DNS and blockchain-based protocols, there are now dozens of overlapping and often incompatible systems competing to define “ownership” of names on the internet. This fragmentation creates user confusion, dilutes trust, and undermines the values ENS was founded to protect.

Fragmentation will accelerate when ICANN opens its next gTLD application window in April 2026, introducing a fresh wave of operators and suffixes. Without a unifying framework, these new namespaces will further diverge from ENS.

In response, we are launching OpenBox Inc. to help unify the naming ecosystem around a shared, open standard – one that prioritizes the Ethereum Name System at its core. Our mission will be:

1. Ship the Open Domain Protocol (ODP)—an open‑source layer that extends ENS directly into the DNS stack, giving any top‑level domain native ENS functionality.

2. Acquire and operate a portfolio of strategic and branded gTLDs, applying the ODP from day one.

This effort is being led by Intercap, a long-standing ICANN registry operator and early investor in ENS ecosystem projects, in close collaboration with ENS Labs, which brings protocol expertise, engineering capabilities, and strategic alignment with the DAO. Our team has already delivered the v1 of this vision — .box — as a fully ENS-integrated TLD built using ODP principles.

What the DAO gets

A strategic equity stake in OpenBox gives the ENS DAO direct influence over the future of onchain naming—and a share in its success. By acquiring and launching key TLDs natively on ENS and Namechain, OpenBox further solidifies ENS as the backbone of decentralized web identity.

Perhaps most importantly, this will serve as a case study in how to build a profitable business on top of the ENS protocol. The investment has the potential to deliver meaningful returns: a $5M investment could conservatively generate $1–1.5M in annual cash flow, based on a 20–30% dividend yield.

Technical Overview: Open Domain Protocol

The Open Domain Protocol is a registry and identity infrastructure designed to bring ICANN-approved TLDs into full technical alignment with the ENS ecosystem. It allows DNS-compatible TLDs (e.g. .box) to behave like .eth names across web3 applications, while preserving DNS compliance and operational standards.

At a technical level, ODP consists of the following components:

1. ICANN-Compliant Operating Stack – ODP respects the legal and operational requirements of being an ICANN registry operator. That includes.

• EPP (Extensible Provisioning Protocol) support for registrars
• WHOIS/RDAP services
• Backend integration with ICANN’s root zone processes

2. Onchain Registry Contracts – ODP domains will be represented and managed through smart contracts deployed on Namechain. Each ODP-operated TLD has its own:

• ERC-721-compatible name wrapper
• Ownership and metadata registries
• ENS resolver support

3. Authoritative Name Servers - DNS-based authoritative nameservers, operated by OpenBox and compliant with ICANN’s technical standards. These nameservers:

• Resolve traditional DNS queries (e.g., josh.box)
• Interface with ENS-compatible infrastructure via signed zone data
• Support cross-chain ownership resolution, enabling domain-to-wallet linking

4. ENS Integration & Namechain Compatibility – ODP is designed for native integration with ENS contracts and Namechain, ENS Labs’ upcoming onchain naming system. That means:

• All ODP domains will be resolvable through ENS resolvers
• Ownership records will sync with ENS’s universal ownership tree
• Names will show up in the ENS Manager App and any dapp that supports .eth

Roles & Contributions

Intercap

Intercap is leading the formation and funding of OpenBox Inc. We are contributing the following:

• $45 million in committed capital, with access to additional resources as needed to scale operations and pursue future TLD acquisitions.
• Operations of .box, the first TLD of its kind to be natively integrated with ENS.
• The formation of a core team, including leadership, product, engineering, growth, legal, and ICANN specialists, all of whom have deep experience building decentralized naming infrastructure.
• Over a decade of operational expertise as an ICANN Registry Operator, including the development and launch of .box as a next-generation, ENS-compatible TLD.

ENS Labs (Proposed)

We propose that as part of this investment, ENS Labs would consider contributing resources, expertise, and strategic alignment to support the development and adoption of the ODP. Specifically:

• Engineering resources to support the co-development of the Open Domain Protocol, with a particular focus on its native integration with Namechain and the broader ENS infrastructure.
• Collaboration on marketing and business development, including integration of ODP-based TLDs into ENS-facing products and public-facing communications.
• Act as a key partner in protocol alignment, technical delivery, and ecosystem integration.

ENS DAO (Proposed)

The proposal invites the ENS DAO to become a shareholder in OpenBox Inc. by investing up to $5 million. This participation would allow the DAO to:

• Signal support for the Open Domain Protocol (ODP) as the foundational standard for ENS-native DNS integration.
• Share in the long-term financial upside of a venture built to advance ENS’s mission at the infrastructure layer.
• Help define governance that extends the ENS Constitution into DNS—prioritizing openness, decentralization, and neutrality wherever possible.

Risks & Tradeoffs

This would represent the DAO’s first direct investment in exchange for equity, a meaningful step that introduces new considerations around financial exposure, treasury management, and legal structuring. Unlike grants or service provider agreements, an equity stake implies a longer-term relationship and a shared interest in the commercial success of the entity.

These considerations are real, but they are also manageable. Intercap brings a proven team of founders, investors, and ICANN registry operators. Their experience and capital reduce execution risk while aligning with ENS’s mission. This structure offers strategic alignment and a credible path to long-term value for the ENS treasury.

Alternatives Considered

Why ENS DAO?

ENS DAO represents the values, users, and governance model we want to align with. DAO participation gives this initiative legitimacy, accountability, and broad ecosystem support — especially in a space where trust and openness matter.

Why Equity Investment?

Because OpenBox is a for-profit venture, equity is the most appropriate structure — it aligns incentives, reflects a fair exchange of value for the DAO’s capital contribution, and enables the DAO to participate in the financial upside.

Why Now?

The 2026 ICANN gTLD round presents a rare window of opportunity. Acting now allows ENS to help define the standard for DNS-onchain integration before others move to fill the gap with competing or closed systems.

Specifications

The ENS DAO will invest $5 million, which will be streamed over a 5-year period to a designated wallet address owned and controlled by OpenBox. The stream will be facilitated via an audited smart contract, subject to DAO approval.

The ENS Foundation, the legal entity that represents the ENS DAO, will serve as the equity holder in OpenBox. This arrangement is subject to final legal and compliance review, though no material obstacles are currently anticipated. For context, The ENS Foundation is a Cayman Islands foundation that exists to serve as a legal entity representing the DAO.

In the event of a profit distribution by OpenBox, any proceeds due to the ENS DAO will be converted to USDC and transferred to the ENS DAO treasury wallet: wallet.ensdao.eth (0xFe89cc7aBB2C4183683ab71653C4cdc9B02D44b7).

In the event that the DAO treasury wallet is moved to a new wallet address, the ENS Foundation board will alert Openbox within ten (10) working days.

Next Steps

Thank you for reviewing this Temp Check. We welcome all feedback and questions as we open the discussion with the community. This is a big idea, and we want to get it right. We’re excited to explore what meaningful collaboration with the DAO could look like.

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[5pence.eth]

Josh, thanks for putting this together.

@Brandley

This would represent the DAO’s first direct investment in exchange for equity, a meaningful step that introduces new considerations around financial exposure, treasury management, and legal structuring.

There’s a lot to unpack here. I’m sure everyone will want to process. I have a couple of initial questions:

• As you pointed out, the Foundation holding assets like this is new to the DAO. Are there any additional legal expenses, D&O insurance, or other ongoing costs that need to be considered and included?

• The Foundation wasn’t set up with this contemplated, at least I don’t think. And the directors weren’t elected with this in mind. How much additional work would there be for the directors? Would any additional clarifications need to be made in the relationship between the Foundation and the DAO, or the responsibility of the directors to respond to the DAO?

• Would you consider a scenario where this approval from the DAO expires after a period and the DAO has to intentionally continue it? Almost like a dead man’s switch. For example, every year or every two years the DAO would have to vote to continue the investment. That sets up a scenario where OpenBox will be incentivized to inform and be open to DAO delegates in a way that a perpetual agreement wouldn’t. (Reagrdless, this also needs to include clarifying what regular reporting mechanisms would be established to keep the DAO informed about OpenBox’s operations and performance).

There is also an additional conversaition the DAO should have about the precendent this would set, and if this would be the only investment like this, or simply the first. But we should probably discuss the merits of just this investment first.

[estmcmxci]

Fantastic proposal. This is an exciting, first-of-its-kind opportunity for ENS. By backing the Open Domain Protocol (ODP), it could:

• Position ENS as the naming layer bridging blockchain and DNS,
• Enable native ENS integration into ICANN-approved TLDs, and
• Give the DAO a long-term stake in the infrastructure shaping onchain identity

Seconding @5pence.eth’s point: I’d love to see how the ENS Foundation plans to gear up as an equity-holding vehicle—quarterly dashboards, clear lines of accountability, the whole enchilada.

Spence already raised the “are-we-ready?” question; I’d add that some sunshine on the contracts and a community-blessed approval flow feel essential, especially for a deal that could become the platonic ideal for every future ENS DAO equity play.

With that in mind, a few friendly nudges below are meant to tighten bolts, not rain on the parade:

Structure, Alignment, and Onchain Representation

If ENS DAO comes aboard as a strategic partner, we should lock in information rights and observer status. That lets a delegate sit in on board meetings—no vote, pen ready—to keep the community in the loop.

Bonus: If we wrap the equity stake in a token—so the DAO’s stake is represented onchain in a transferable or governable form—anyone can track it, giving us clear, no-nonsense transparency.

Legal Representation and Contractual Review

From current understanding of the ENS Foundation, they’d be the legal entity empowered to execute this investment. The directors of the Foundation have broad discretionary authority to enter into contracts and carry out actions on behalf of the Foundation without requiring prior DAO approval, unless otherwise specified. This raises a few concerns, chiefly:

• Process check: Before the Foundation signs, what review or ratification step—if any—lets the DAO weigh in?
• Document visibility: Will delegates see and comment on the legal docs before the ink dries?
• Mandate fit: Do the directors view equity investments as part of their remit, and are they comfortable carrying the legal, fiduciary, and reputational load that comes with it?

A quick roadmap on these points would help everyone feel confident before the pen hits paper.

Income and Liquidity

Before we hit “execute”, the community should see a proper term sheet. This will not only outline the basic economics of the deal, but also establish the legal and governance framework by which the DAO engages with OpenBox.

At a minimum, it should define expectations around:

• Profit distribution (e.g., dividend policy or revenue-sharing)
• Resale constraints (whether and how the DAO can liquidate its equity)
• Governance visibility (such as information rights or observer status), and
• DAO rights in major decision-making events (like mergers, pivots, or dissolution).

Without these protections explicitly written into a formal agreement, the DAO risks entering into a structurally passive position with limited recourse.

Timing and Risk Exposure

Given the complexity of the ICANN application process—high costs, long lead times, and uncertain outcomes—it’s worth asking whether an investment at this stage is premature.

Would it be more prudent to wait until at least one gTLD has been successfully awarded? Alternatively, the proposal could proceed with a social vote that functions as a non-binding LOI with defined terms, contingent on ICANN progress.

Risk Modeling and Treasury Impact

Given the DAO’s runway and rising commitments, a fresh set of eyes on a risk-adjusted financial model feels prudent. Let a third-party crunch the numbers—factoring in execution risk, ICANN hurdles, cost of capital (plus any liquidity we’re parking), and plausible returns—so we’re making decisions with both feet on the ground and a calculator in hand.

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Big +1 from me. Hope the notes above help sharpen an already strong proposal—excited to see where this goes!!

[jamesbeck]

@estmcmxci

Given the complexity of the ICANN application process—high costs, long lead times, and uncertain outcomes—it’s worth asking whether an investment at this stage is premature.

All really good questions raised, @estmcmxci! I agree that clarity in the equity / revenue structure would be helpful to model out for the DAO.

To this point though, based on the meetings and intel @Alexu and I gathered at the ICANN meeting in March, there are several competing protocols that have already been pitching registries, registrars, and web3 companies on assisting with the 2026 gTLD round applications.

As the first blockchain-based naming protocol that has always colored-in-the-lines with ICANN, one could argue that ENS is actually lagging behind others in preparing for the 2026 round, both in securing commitments to help web3 companies acquire gTLDs, and making sure that ENS is the standard for onchain URLs.

[clowes.eth]

So, my high level thoughts - this is really interesting.

The real question here is does the DAO want to become an investment vehicle?

@Brandley I think you’ve probably undersold your positioning here - Intercap (as I understand) already have established relationships with Registry software providers? Could you clarify who?

I’ve heard a number of people discussing applying for gTLDs with, IMO, a lack of appreciation for how many moving parts there are with registry operation. There is a huge financial/resource lift associated with building this stuff in-house. If gTLD investment is a path that the DAO wants to go down, we should definitely partner with an established provider/known entity like Intercap who already have established relationships.

That abstracts the technical implementation problem, leaving us to consider the gTLD applications…

There are a lot of unknown unknowns, namely if ICANN can work out a way of avoiding ridiculous contention set payoffs. How many extensions are you intending to apply for?

A number of crypto companies are applying in the upcoming round. I can’t help but feel that if ICANN doesn’t get the game theory right, this is going to get a bit silly - the numbers involved with contentious extension applications I imagine will be huge.

I don’t know how much you paid for .box second time around, but Amazon originally sold on the rights for $3M.

Some specific comments…

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@Brandley

to advance ENS-native identity;

Is this the core intent of OpenBox? I.E. The investment isn’t in just another gTLD applicant, but rather one whose core focus is on pushing the interplay between ENS and DNS?

@Brandley

OpenBox Inc. has secured a $45 million capital commitment from Intercap

I’m assuming $9M/year over 5 years, accounting for the other 90% equity stake?

Out of curiosity, who makes up Intercap?

@Brandley

Acquire and operate a portfolio of strategic and branded gTLDs

This is where things get interesting.

Who decides on the TLD’s that the entity applies for, and who is party to those conversations?

If this is a DAO investment then DAO stakeholders should logically be involved in those conversations, but there are obviously business considerations that shouldn’t necessarily be public. The DAO probably needs to appoint a separate sub-team to manage such an investment.

@Brandley

A strategic equity stake in OpenBox gives the ENS DAO direct influence

Noting the above, is this true? A 10% stake isn’t influential noting there are only 2 stakeholders.

@Brandley

We propose that as part of this investment, ENS Labs would consider contributing resources

This also requires clarity. ENS Labs is an independent entity - the DAO can’t compel them to provide resource. If the DAO invests money, its up to you how you spend that money in terms of hiring resource etc

@Brandley

a $5M investment could conservatively generate $1–1.5M in annual cash flow, based on a 20–30% dividend yield.

What does this mean? Annual cash flow as in return on investment to the ENS DAO each year? If this is dividend yield, that implies $5M of profit per year?

Any high level napkin math to corroborate those numbers?

@5pence.eth

Would you consider a scenario where this approval from the DAO expires after a period and the DAO has to intentionally continue it? Almost like a dead man’s switch. For example, every year or every two years the DAO would have to vote to continue the investment.

This is an equity investment? Josh mentions streaming the investment funds… Is the equity also going to be streamed? This seems very first of its kind, and I imagine there is a lot of legal nuance.

@estmcmxci

what review or ratification step—if any—lets the DAO weigh in?

Marcus, this is so Chat GPT’y that it is very difficult to read.

The ratification step is that the DAO has the money. The Foundation technologically can’t force DAO spending.

@estmcmxci

the DAO risks entering into a structurally passive position

This is not uncommon with equity investments. Of course, your points at a high level are valid - serious legal consideration needs to be given to this. The Foundation needs a lawyer.

@estmcmxci

it’s worth asking whether an investment at this stage is premature

Premature? If anything it is the opposite - time is of the essence. The last gTLD application process was back in 2014, and the process… its ICANN… is a huge lift.

@jamesbeck

there are several competing protocols that have already been pitching registries, registrars, and web3 companies on assisting with the 2026 gTLD round applications.

This. There is big money being thrown at this.

[cap]

Thanks for the proposal, @Brandley. I appreciate the thought that went into this.

Reasons why I think this proposal is important:

• Domain tokenization is the new frontier, and ENS should lead, not lag.
• The DomainFi industry is still in its (fairly) early phase.
• Team has domain experience, which isn’t easy to find. I trust dev execution.
• We need to build a credibly neutral system for tokenizing and running TLDs.
• I’m always in favour of DAO introducing new income streams (even through investments, and this is as great of an opportunity as it gets!)
• Historically speaking, ENS moves slowly, and I’d like to help change that.
• The success of Namechain depends on activating more onchain naming activity, and that includes new TLDs, new registries, protocols, apps, and making a fertile ground for ecosystem development.
• Overall, I’m in favour of paying for developing the Open Domain Protocol that will be used by everyone, and I like the intention behind this proposal.

General comments:

• This seems to be a combination of 1) investment with big potential upside + 2) some service provider type work that greatly benefits the ENS ecosystem, and I really like that.
• I want to echo the importance of capturing the monetary value of it investment, which should flow back into the DAO treasury.
• I love the domain experience of the team, but I would love to go through a due diligence and treat this as a regular investment too.
• I would appreciate a clear distinction of what $5M finances:
  • Here it says OpenBox will (1) build ODP, (2) acquire gTLDs to advance ENS-native identity (please elaborate how acquiring TLDs advances ENS identity), (3) partner with brands to launch their gTLDs using ODP.
  • You also mentioned that $45M from Intercap will be used to acquire TLDs? And $5M from the DAO will be used for the same purpose?
• This is a $5M commitment over 5 years, so some mechanisms should exist for oversight, accountability, and course correction.
  • Echoing what @5pence.eth said for a yearly vote to continue the investment – this mitigates potential financial risks the DAO might incur (as you stated).
  • However, I understand this doesn’t make too much sense if we look at this as a regular investment (I assume ODP development won’t take 5 years to build).
• I’d personally like to hear more about the go-to-market strategy. ‘Partner with brands and communities to launch TLDs’ is too high-level for this ask, especially since the ROI (cash-flow-wise) seems to depend on properly executing a go-to-market strategy.
  • Are there any public records of sales or any data from .box or 3DNS tokenizations that show the team’s ability to take domains to market and execute on this?

Other random comments and questions:

• $1-1.5M/year in cash flow from a $5M investment seems high. What’s the math behind this? Can you share some financial models with projections/assumptions?
• Looking at this solely from the ‘investment’ perspective – how does ENS DAO make money from this? Other than dividends and a long-term ROI (exit/IPO) from backing this venture.
  • Is there any consideration for revenue share, protocol fees, or other mechanisms that help the DAO capture upside?
• What’s the current company valuation? Who else is on the cap table?
• If ODP is open-source, is there the code or roadmap? Can I follow along, test, or contribute? I’d love to be able to understand and use it as soon as it’s live.
• I believe you hold a domain tokenization patent (correct me if I’m wrong)
  • Are there any existing or planned patents related to the ODP (either directly or for any systems that combine ODP with TLD tokenization?)
  • If so, how would that intersect with the goal of building an open source and credibly neutral standard?
• @clowes.eth’s comments are actually very helpful to understand the magnitude of work that goes here, and your experience and unique position to deliver here.
• I love the questions from @clowes.eth and @estmcmxci.

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Ever since I started working with Subnames, I’ve always wanted to enable more TLDs to plug into ENS and operate their own namespaces. Subnames are powerful and serve somewhat the same purpose… but purpose-built, second-level domains tied to the ecosystems are on a whole different (premium-feel) level.

I’ve been exploring domain tokenization with my team, but this proposal expands the playing field in a way that’s incredibly exciting. I wish I were in a position to contribute more directly, but I’m fully aligned with the direction and deeply supportive of efforts that push this forward. Looking forward this!

[estmcmxci]

@jamesbeck

As the first blockchain-based naming protocol that has always colored-in-the-lines with ICANN, one could argue that ENS is actually lagging behind others in preparing for the 2026 round, both in securing commitments to help web3 companies acquire gTLDs, and making sure that ENS is the standard for onchain URLs.

True. Just to clarify my comments re: Timing and Risk Exposure, I believe the time is definitely now for teams like OpenBox Inc. to apply for the ICANN gTLD round.

I’m asking whether the DAO should consider waiting to commit capital until at least after OpenBox Inc. has successfully secured at least one gTLD through the ICANN application round. In this case, a successful social vote could serve as a legally binding Letter of Intent (LOI), conditionally executing the capital commitment based on the outcome of the gTLD round.

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@clowes.eth

The ratification step is that the DAO has the money. The Foundation technologically can’t force DAO spending.

True. Thank you for that reminder. My question re: Process Check is whether the Foundation will share the terms they intend to sign with the DAO. In other words: is there a review or approval process that allows the DAO to weigh in before anything is contractually finalized?

I understand some details may need to remain confidential, but clarity on how this investment materially impacts the DAO before a vote would be both prudent and constructive. DAO control over funds is necessary but not sufficient. There should also be contractual visibility and alignment before legal commitments are made on its behalf.

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@clowes.eth

This is not uncommon with equity investments.

Sure, a 10% stake puts the DAO in a minority position, but that doesn’t necessarily mean it needs to be in a structurally passive position either if the deal includes protective provisions such as observer status, quarterly reporting, or vetoes on specific “reserved matters.”

The most straightforward approach would likely be for someone from the Foundation to sit in on OpenBox Inc. board meetings and report relevant information back to the DAO in a timely manner.

—

Agree with @cap, there should be more DD prior to capital commitment, including an overview of what the DAO is contractually committing to, how the funds will be used, and the other points he raised.

Not sure if the forum or Working Group calls are the right venue for this, given the sensitive nature of the information — I wouldn’t want to expose OpenBox Inc. or ENS to any unnecessary vulnerability.

[jamesbeck]

@clowes.eth

There are a lot of unknown unknowns, namely if ICANN can work out a way of avoiding ridiculous contention set payoffs.

I’m no expert on the arcane ICANN rules, but from what I’ve gathered, they are changing the contention set rules for 2026. In 2012, there were private auctions that ended pushing some gTLDs into the multi-millions. For the 2026 round, they are prohibiting private auctions, so that “less well-resourced applicants to prevail if they find themselves in a contention set.”

This means applicants will submit an alternate string in the case that the one they want is taken by another company (you can predict .crypto might be a contentious application in our space).

They will also employ the " ascending clock second-price auction method" also known as the Japanese auction, which is a type of auction where the price increases continuously (or in discrete steps) until only one bidder remains. The winning bidder pays the second-highest bid, not their own. That said, this still doesn’t prevent well-capitalized actors to win the popular strings (they would just have to pay less after winning). So I’m not sure how this will play out in practice…

You can read more about it here: A Path Forward: Contention Set Resolution for the New gTLD Program: Next Round

[Brandley]

Thank you for all the great comments so far. I really appreciate all the support.

Below I am trying to respond to some of the bigger themes that I see emerging.

@5pence.eth

The Foundation wasn’t set up with this contemplated, at least I don’t think. And the directors weren’t elected with this in mind. How much additional work would there be for the directors? Would any additional clarifications need to be made in the relationship between the Foundation and the DAO, or the responsibility of the directors to respond to the DAO?

It’s important to note that we’re offering ENS a minority stake in OpenBox, which comes with limited overhead and obligations. The stake would include standard NVCA-style shareholder rights, identical to those held by Intercap. By offering 10% for $5M, the valuation is effectively set on a “money-in” basis—an advantageous structure for ENS.

This arrangement would not include any rights to a board seat. However, I would likely look to recruit someone from the ENS community to join the company’s board.

The company would have a high functioning board of directors with a fiduciary duty to shareholders - similar to every other company in the Intercap portfolio

@5pence.eth

Would you consider a scenario where this approval from the DAO expires after a period and the DAO has to intentionally continue it? Almost like a dead man’s switch. For example, every year or every two years the DAO would have to vote to continue the investment. That sets up a scenario where OpenBox will be incentivized to inform and be open to DAO delegates in a way that a perpetual agreement wouldn’t. (Reagrdless, this also needs to include clarifying what regular reporting mechanisms would be established to keep the DAO informed about OpenBox’s operations and performance).

We are not considering issuing these securities as options. Instead, we’re offering a “co-founder” style deal—an opportunity to invest alongside Intercap on the same terms. The structure is based on a committed capital amount to participate in the business. The proposed $1M-per-year framework is a custom approach we’re exploring specifically to align with the ENS treasury’s cash flow needs.

@Brandley

a $5M investment could conservatively generate $1–1.5M in annual cash flow, based on a 20–30% dividend yield.

To clarify, the napkin math is simple. In the base case, I expect the business to generate a 20–30% annual cash-on-cash return. A $50M investment into building the ODP and acquiring TLDs should yield $10–15M in free cash flow per year. With a 10% stake, ENS could expect $1–1.5M in annual treasury income. In my view, this is a conservative and reasonable projection based on industry experience. While a more optimistic “bull case” could show higher returns, I believe this base case is a pragmatic starting point.

At this stage, we’re envisioning a $50M initial capital plan allocated roughly as follows:

1. $2M for building the Open Domain Protocol (ODP)
2. $1M for business development
3. $47M for initial TLD acquisitions

[garypalmerjr]

I do like this idea…This proposal is exciting, but may come with trade-offs when viewed through cypherpunk and open-source lens.

On the plus side, it aims to extend ENS into the DNS world using open-source tech (ODP), and helps us with ICANN and gTLD processes, helping to unify sovereign and open source identity systems, and to strengthen ENS/CCIP as the backbone of Web3 identity.

That’s a big step forward for open source and digital sovereignty. But it also introduces a for-profit structure and equity ownership, which could pull us away from core cypherpunk values, like decentralization, neutrality, and permissionless innovation.

If ENS DAO does move forward, then we’ll need to make sure the community’s voice stays strong, and that our RIPCORD-values (including sovereignty, decentralization, neutrality, and permissionless) guide our mission—not just the great business incentives, which we also want to leverage for the greater good.

[slobo.eth]

Summary
For five million USDC, ENS gains meaningful revenue decentralization and deep integration of ENS-native TLDs through a proven operator. This is a clear strategic win for the ENS DAO.

ENS-Native TLDs
Making TLDs fully ENS-integrated is critical to ENS becoming the global identity standard. Article IV of the ENS Constitution states:

ENS integrates with the global namespace

There is no stronger embodiment of this principle than bringing TLDs onchain.

Revenue Decentralization
For the quarter ending March 31, 2025, 18% of ENS DAO revenue came from the endowment. Using the midpoint of the $1.25 million projection, this would raise non-protocol revenue to 23%. This materially strengthens ENS’s long-term sustainability.

Great to see such a thoughtful and forward-looking proposal. Thank you.

[SpikeWatanabe.eth]

ENS is not a private equity fund, and there is nothing stopping you from collaborating without this investment

[mely.eth]

After hearing Tim Berners-Lee speak at ETHPrague, I really, really want to emphasize the importance of establishing ENS as the global standard for naming and domains. ‘ODP + Namechain’ could be a crucial part of that process, and I hope we reach a consensus to move forward with this.

[SpikeWatanabe.eth]

For this deal to happen there has to be a lot of steps undertaken which are not exactly part of ENS core expertise, for starters there has to be a due diligence done to make sure that everything is ok with the asset in question - that includes financial, legal and economic due diligence.

In a professional world people would never throw numbers of the sort around

@Brandley

$5M investment could conservatively generate $1–1.5M in annual cash flow, based on a 20–30% dividend yield.

it would always be backed by a financial model, from which a competent financier can infer how reasonable those numbers are.

Based on comprehensive financial model, sound deal rational ought to be developed, which would translate into the actual terms of the deal, at which point you would build non-binding “term sheet” outlining key terms.

Following that you would engage lawyers who would put all of the work done above in the form of legally binding contracts, which would need to be signed by someone who actually has authority to do so.

That’s not factoring in the fact ENS is a DAO is not exactly a traditional legal entity.

So simply saying “oh hi guys, nice proposition, we like your cashflow, let’s leeeeroy with it” is naive at best if not dangerous.

On the downside of these kind of dealings this opens up DAO to Mariana Trench of legal risks.

Besides from what they said themselves - OpenBox is very well capitalized as it is - 45mUSD is more than enough to build a solid product and 1mUSD per year wouldn’t make much difference for them. To be honest, I just don’t see the point why would they request it in the first place? Just try to claw as many bit and pieces of money around as possible?

From the collaboration point of view, there is nothing stopping from collaborating with ENS without this “strategic investment”, on the other hand even if that investment does happen, ENS becomes a minority investor. If you know anything about the corporate world, is that minority investors always get the short end of the stick, in other words this investment would put no obligation whatsoever on OpenBox to work together with ENS in any specific direction - they will still do as they please.

So my question remains - Why?

[cap]

Something else just occurred to me – is the option of having an adjustable fee for each 2nd-level domain minted after a TLD is tokenized via ODP, on the table? And what does others think about it?

One of the biggest value-adds ENS will bring to other TLDs is the ability to tap into its wide network of ~1,000 integrations where ENS is already supported, meaning instant resolution with 1,000 Web3 products (unless I’m mistaken). That reach essentially addresses the cold start problem for them and acts as a built-in distribution engine they’ll continuously piggy-back from as we keep getting more of them.

I’d really like to see the DAO benefit financially from this value exchange. Even a small share would go a long way.

In the current deal structure, we rely on OpenBox and their ability to generate revenue in order for the DAO to benefit – and I’m ok with that if the DAO decides to invest, and will do my part to help. But in the model I’m suggesting, we’d be benefiting from everyone tokenizing TLDs through ODP.

I know making money is sort of a taboo topic here, and not the priority for the DAO and we rank it lower in priority, but I want to advocate financial sustainability and exploring non-intrusive monetization paths.

I agree we shouldn’t optimize for max profit extraction through everything we do but I want to note that concerns have been raised recently about the shrinking revenue and declining name registrations and renewals. So I’d love to see the DAO earn wherever it can, without compromising on its values ever. It’s all about finding the right balance and I think we can get there.

Also worth mentioning – as ENS matures, the DAO has growing needs, like Namechain, a growing pool of service providers, all of whom currently have no monetization model, etc. That’s something we should think about as we plan for long-term sustainability.

[SpikeWatanabe.eth]

@cap

I know making money is sort of a taboo topic here, and not the priority for the DAO and we rank it lower in priority, but I want to advocate financial sustainability and exploring non-intrusive monetization paths.

it shouldn’t be taboo, perfectly normal topic to discuss

[cap]

I don’t see a lot of activity on this post, and I would like to quote James and hopefully light a fire under everyone’s behinds.

@jamesbeck

To this point though, based on the meetings and intel @Alexu and I gathered at the ICANN meeting in March, there are several competing protocols that have already been pitching registries, registrars, and web3 companies on assisting with the 2026 gTLD round applications.

I’ve been doing a lot of research into ICANN’s upcoming TLD auction, and I can confirm that other companies, pioneering the DomainFi model, are aggressively leveraging it to help other companies secure their TLDs and at the same time onboard them to their own chains/protocols.

I initially saw this proposal as just an investment opportunity for the DAO, but I didn’t realize the urgency behind it. And I wish it had been communicated more directly.

That said, I encourage commenting if there are any questions and taking the next steps here. Because I think if we don’t do this, with or without OpenBox, we’d be at a huge disadvantage.

I would just like the answer to my previous comment

@cap

option of having an adjustable fee for each 2nd-level domain minted after a TLD is tokenized via ODP

[mely.eth]

@cap

I can confirm that other companies, pioneering the DomainFi model, are aggressively leveraging it to help other companies secure their TLDs and at the same time onboard them to their own chains/protocols.

Adding to that: Every single one of our partners and integrators who want to acquire and use their own gTLD will be able to do so under the Umbrella of ENS, Namechain, and OpenBox.

ENS is in the best position to support brands and companies in this endeavor.

[Brandley]

@cap

I would just like the answer to my previous comment

@cap

option of having an adjustable fee for each 2nd-level domain minted after a TLD is tokenized via ODP

Hey @cap — Yes, that’s exactly the model. Openbox intends to collect fees from third-party registries that use the ODP for tokenization and ENS integration. ENS gains exposure through its equity stake in Openbox.

Namechain may also earn sequencer fees as part of the system.

And thank you for recognizing the urgency here. I tried to capture this under “Motivation,” but deliberately avoided sounding alarmist. We are tying ourselves closely to ENS. This is a major commitment—we take it seriously, and we hope ENS does too.

[estmcmxci]

@Brandley

OpenBox Inc. has secured a $45 million capital commitment from Intercap

Just curious—since OpenBox Inc. already has $45M in committed capital earmarked for TLD acquisitions, what makes the $1M from the DAO materially impactful? Is this investment unlocking something specific, or is it primarily about strategic alignment and shared upside?

If it’s the latter, my recommendation is to treat a successful DAO social proposal as a Letter of Intent (LOI) affirming strategic alignment, with the $1M investment contingent upon OpenBox Inc. securing a TLD.

The ENS Foundation can formalize this by issuing a contractually binding LOI that reflects the DAO’s intent and releases funds only upon successful TLD acquisition (following a successful executable vote).