To confirm we’re talking about $100,000,000 of ETH/Stables and $250,000,000 of ENS tokens that would move from a fully decentralised onchain DAO controlled by the ENS token to a small group of insiders with a multisig (with whatever security parameters you want) and foundation control?
This is a monumental change to the protocol, it’s security, and the ENS token. One of the primary reasons that ENS maintains it’s “protocol attack cost” is the price of ENS token, which is directly linked to the treasury value; CC why for the past X years ENS has traded basically 1:1 with ETH. ENS has a huge treasury of ETH, stables, ENS tokens and ongoing revenue that is directly controlled by ENS token; breaking this link is not only bad for decentralisation and transparency it also directly impacts the value of the token.
This token valuation is the cost to attack the ENS protocol, the cost to steal an ENS name, to upgrade the protocol to a malicious version, etc. Decoupling the onchain treasury from the ENS token is one of the most dangerous things ENS can do as a protocol.
Continuing to build and develop your previous proposal @katherine.eth Expanding the ENS foundation is something Fire Eyes was (and is still) excited to engage with. After ~2 months with no updates we’ve received this sweeping proposal outlining an overwhelming number of structural changes; One of the most meaningful being the perspectives on decentralised ownership, contribution and the DAO.
Ethereum at its core allows credibly neutral smart contracts; these smart contracts can be used for a range of things; a DAO is only a name we have for a subset of these smart contract architectures. The point is credibly neutral governance that protects the protocol and its interests. Previous organisations have been trying to govern without smart contracts for hundreds of years, now we’ve finally invented a new way to securely coordinate technology and capital, and half the people with money and power within these systems want to ragequit them.
ENS is an important beacon for Ethereum more generally. ENS has a large aligned community of contributors, service providers, working groups, .eth holders and ENS token holders as well as a large ETH/USDC/Token treasury controlled in a set of decentralised smart contracts governed by ENS tokens. All of these things mean ENS is the perfect example to the wider Ethereum industry and the world.
When Fire Eyes was working on launching the ENS token and DAO alongside primarily @nick.eth and @brantlymillegan one of the most important ideas was decentralisation, experimentation and genuine community ownership. How could we design a token and DAO that was a true pillar of Ethereum and it’s values, this led to decisions like; 50% of the tokens being given to the onchain treasury, this onchain treasury being controlled by a DAO not a foundation, standing up working groups, wanting to build in public, fully supporting the SPP initiative. All aligning under the thesis of seeing Ethereum’s core protocols thrive in a decentralised way. Now it seems these ideas are being thrown away in lieu of ‘return to default’; a ballooned crypto foundation with a huge budget, something we have seen fail time and time again. Most projects in crypto history have a foundation with a huge treasury they eventually burn through.
ENS is one of the only projects in the space with a token governed protocol, that holds serious security weight (control over the global decentralised namespace), generates real revenue, and maintains a large treasury. Innovating at this split in the road is important for ENS, Ethereum and global decentralised identity.
Certainly this doesn’t mean the current DAO governance is perfect by any means, but it’s about continuing to innovate, not throwing in the towel. Soul bound governance, introducing new initiatives and delegates, parallel governance experiments, skill based endorsements, etc - How can we build new and improved governance systems, not fall back to repeat the same ones. Empowering the foundation is something we should pursue in an operational capacity, but moving control of everything all at once from an onchain DAO to a foundation multisig is an incredibly unwise path forward for ENS.
There are obviously other areas where this proposal needs further feedback (ie. board members, IP use, conflicts, token oversight, etc) and a more in-depth response will be made this week.