Abstract
The discussions leading up to and surrounding the ongoing retrospective are surfacing what most of us long-time ENS contributors already know and feel deeply: ENS DAO’s coordination structures aren’t keeping pace with the importance of ENS. ENS remains one of Ethereum’s greatest success stories. It is core Ethereum infrastructure, and yet the governance layer between token holders and execution is slow, under-specified, and increasingly a source of friction rather than accountability.
This proposal builds on prior calls for a DAO accountability layer by expanding the mandate and formal authority of the ENS Foundation and restructuring its Board of Directors from three to five seats. The goal is to move more day-to-day accountability into the Foundation under an expanded board with greater independent and external participation, and clearer responsibility to the DAO.
This Board will be given direct budget allocation authority from the DAO over ENS Labs, service providers, and public goods initiatives on behalf of token holders. The goal is to reduce delegate fatigue, establish a genuine accountability layer between the DAO and the entities it funds, and create a coordination body with the standing and mandate to act.
Most importantly, protocol governance would remain exclusively with tokenholders. Contracts, pricing, root control, and all other core protocol decisions would continue to require tokenholder approval, exactly as they do today. Tokenholders would also retain the power to approve or remove Board Members.
What changes is not the authority of token holders, but how that authority is exercised, by delegating operational accountability to a body that is answerable to them.
The Problem We’re Solving
Four things come up consistently in this forum and in conversations with delegates and contributors:
1. Delegate fatigue is real and getting worse. Delegates are asked to vote on an expanding range of decisions — many of which they don’t have enough context to evaluate well. The cognitive load of governance participation is high, and the signal-to-noise ratio is low. Good delegates are disengaging because the cost is too high relative to the impact.
2. The DAO makes too many small decisions and too few big ones. Token holder votes are a scarce and expensive resource. We routinely spend that resource on operational questions that don’t require it, and then lack the bandwidth for the strategic decisions that do. The result is a DAO that is simultaneously over-governed and under-governed.
3. There is no accountability layer between the DAO and the entities it funds. When a grant recipient (be it a service provider, a vendor, or Labs itself) underdelivers, the DAO has no formal mechanism to respond short of a public vote. When the community disagrees with a DAO spending decision, there is no procedural channel to raise that concern. The absence of a middle layer means every tension surfaces as a political fight, and the lack of nuanced understanding of differing perspectives often exacerbates tensions.
4. Coordination across working groups is slow and inconsistent. There is no body with the standing and mandate to coordinate across these structures. This has a downstream negative effect on contributors (especially painful for programs such as the SPP) as decisions that should take days take months, and contributors are repeatedly blocked waiting for clarity that never formally arrives.
Working group stewards have contributed immensely to the functioning of the DAO since inception, and this is not an indictment of that work. However, the lack of a coordination layer means that oftentimes the difficult work that stewards and contributors do goes unacknowledged or underappreciated, especially as the scope of work has crept far beyond its initial bounds over the years. A new structure should optimize for operational efficiency at scale while still respecting the decentralized, open-source, and credible neutrality that make up the core values of the ENS protocol and Ethereum.
The Proposal
This proposal has two components: expanding the mandate and formal authority of the ENS Foundation, and restructuring the ENS Foundation Board of Directors to give it the composition and powers needed to execute that role effectively. Critically, this would replace the working group structure entirely (more details on this below). Together, these changes require amending the ENS Foundation’s Articles of Association and bylaws — something that the Foundation’s existing independent legal counsel could take on if the DAO endorses this direction.
1. Right Sizing the ENS Foundation for Decision Making and Accountability
The ENS Foundation is an existing Cayman Islands foundation company that already serves as the legal entity for ENS. It currently handles offchain administrative and legal matters on behalf of the DAO. Its board currently consists of three directors.
Under the structure proposed in this temp check, the Foundation Board would hold and allocate the DAO’s annual budget (exact budget number to be proposed, but ballpark $15m in the first year based on previous data) on behalf of token holders. The Board sits formally between the DAO and the entities it funds, and is accountable to token holders for how that trust is exercised.
Under this model, the DAO ratifies an annual budget and delegates its allocation to the Foundation Board. The Board then distributes funding across three categories: ENS Labs, service provider program (SPP), and public goods and ecosystem initiatives. Notably, the selection process for SPP should be separated (i.e. adopting a committee model) as the Board’s main purpose is accountability, not gatekeeping. Both ENS Labs and service providers (or in the case of a revamped committee-lead SPP, the committee) report directly to the Board, and continue to publish public quarterly reports directly to the DAO. Assuming there is broad reception to this proposal, the funding relationship and structure will be defined further in the formal proposal.
This transfers budget allocation authority to a coordination layer that is purpose-built for operational accountability, insulated from cycle-to-cycle political noise, and answerable to token holders through ratification and removal powers.
The Foundation has no authority over protocol-level decisions. Contracts, pricing, root control, and all other core protocol governance (in addition to treasury management) remain exclusively with token holders. That boundary is unchanged.
2. Restructuring the ENS Foundation Board of Directors
The Foundation Board is the governing body that makes this structure work. Its legitimacy derives entirely from token holder ratification — the DAO’s power to appoint and remove directors is already established in the Foundation’s Articles of Association, and this proposal builds directly on that existing mechanism.
Composition and Expectation of the Board
The existing Foundation Board would be expanded from 3 seats to 5 seats through the addition of 2 new directors. The restructured board will consist of five seats: two held by ENS Labs representatives, and three held by external and independent directors (meaning that independent voices will make up the majority on the board). The goal is a board where ENS Labs is represented but not dominant, and where external directors bring genuine independent judgment to budget allocation and accountability decisions.
External directors should bring substantive experience in at least one of the following areas:
- Nonprofit or foundation governance: experience running or serving on the board of a mission-driven nonprofit or foundation, with direct accountability for organizational strategy and financial stewardship.
- Protocol or ecosystem leadership: a track record of building or stewarding foundational infrastructure at the ecosystem level, with credibility across the broader Ethereum and open-source communities.
- Financial and business acumen: experience allocating capital at scale, with the financial judgment to evaluate budget proposals and hold funded entities accountable to outcomes.
If there is broad reception to this proposal, I will work with the existing ENS Foundation Directors to lead a search process for the external seats and will publish the full candidate slate in the formal proposal for community review prior to ratification.
Directors may resign with 30 days written notice and may be removed by a supermajority of seated directors (minimum 3 votes) or by a standalone DAO-wide proposal. Directors must disclose material affiliations with ENS Labs, service providers, or grant recipients at appointment and as they arise, recorded in public minutes. Affiliated directors may deliberate and vote unless they stand to personally benefit from the outcome, in which case recusal is mandatory.
Authority of the Board
- Receives and allocates an annual budget across ENS Labs, service providers, and public goods/ecosystem initiatives
- Holds ENS Labs and service providers accountable to their mandates and deliverables
- Has formal standing to raise concerns about spending or performance — concerns go on record, and token holders retain final authority on all protocol-level decisions
- Reviews public quarterly reports from all funded entities and adjusts funding based on performance
- May hire operational staff, full time or contractors, as needed. These roles may include secretarial duties, accounting expertise, governance liaison, and other talent to draw on from within the existing ENS community.
Board seats will be compensated, in line with standard boardroom expectations, to reflect the scope of work expected of each director. Compensation details will be included in the formal proposal and approved by the DAO.
How This Works in Practice
Budget cycle. Each year, the DAO votes to approve a total budget for a determined cycle. The Foundation Board then allocates that budget across ENS Labs, service providers, and public goods initiatives — this would replace the current working group funding cycle. Funded entities must publish public quarterly reports to the DAO and report directly to the Board, which reviews performance and adjusts future tranches accordingly.
Accountability in practice. If a service provider misses milestones, the Board flags it, adjusts the next funding tranche, and publishes its rationale publicly. The goal is to minimize political infighting as funding decisions have a clear home, a clear process, and a clear record. In return, the Board is accountable to tokenholders, as it holds authority only so long as tokenholders ratify its budget cycles and seats.
Working group transition. This structure replaces the working group model. Existing stewards, active streams, and current-term commitments would be honored through their natural conclusion or brought under review. The transition timeline would be defined in the formal proposal in coordination with current stewards.
What the DAO still votes on. Protocol changes, constitutional amendments, treasury spending and management, and any board appointment all require token holder votes, as they do today.
Next Steps
If the DAO endorses this direction, implementation has three sequenced components:
- Legal counsel engagement. Amendments to the ENS Foundation’s Articles of Association and bylaws require coordination with the Foundation’s existing independent legal counsel (in Cayman).
- Articles of Association and bylaw amendments. Expanding board composition from 3 to 5 seats, defining the board’s formal authority over budget allocation, and formalizing accountability structures for ENS Labs and service providers.
- Formal Proposal followed by a DAO Vote. As a temp check, this is to gather feedback and suggestions prior to a formal proposal. Nothing changes structurally until token holders have ratified it.
The goal of this temp check is to establish whether the DAO is aligned on the direction before a formal proposal is drafted and submitted. MetaGov Research team’s Phase 1 findings are strong confirmation of the problems identified in this proposal, and this proposal is not meant to be a parallel track to the retrospective, but a structural answer to what it is finding. Several important details are intentionally left for the formal proposal, including board compensation structure, transparency and reporting requirements for board operations, and the full conflicts of interest policy.
On a personal note: I am writing this as a long-time direct contributor to the ENS DAO as a former steward myself and also a member of the core team behind the ENS protocol. That experience shapes how I see things right now, and what I know to be true is that ENS Labs and the DAO and the builders in this ecosystem are not adversaries. There have been numerous calls for change within our system, and I bias towards action.
I do believe that we all want the same thing here: a decentralized and open-source protocol that proliferates while staying resilient, secure, and credibly neutral. This proposal doesn’t claim to fix every structural challenge the DAO faces, but I believe this creates an accountable operational layer that functions regardless of those dynamics.
Responses to this post and in DMs are welcome.
