pixel art NFT are nothing new – one of the first NFT collections, CryptoPunks, pioneered the 8-bit block design style.
But Nouns is shaking things up with a new distribution method and an open source IP that has led to the collection’s pixel specs appearing everywhere from beer cans to movies.
Here’s how Nouns works and how he built a multi-million dollar decentralized brand.
What are names?
Nouns is primarily an NFT collection, whose owners are part of Nouns DAO, a decentralized autonomous organization.
Non-Fungible Tokens (NFTs) are cryptographically unique tokens that are often used to represent digital artwork. Names are an example of a Profile Picture Collection (PFP), a set of NFTs that are typically used as a user’s profile picture on social media platforms.
Names are also a creative experiment on Ethereum designed to improve how on-chain communities interact. The Nouns DAO does this by using its treasury to build and support public assets.
A little over a year has passed since the first Nouns NFT (a pixel art character with a fox head and rose-colored glasses) was auctioned on Ethereum. During this time, the Nouns DAO has steadily grown and now holds just over 29,000 ETH (approximately $45 million) in its treasury – a war chest used to fund a diverse range of initiatives ranging charitable donations to the denomination. a new species of frog.
Who invented the names?
The concept of the names was inspired by a Twitter prompt of an anonymous founding member, Punk 4156. After interest grew in the idea, he followed it up with a series of tweets describing the framework that would invariably become nouns.
Soon after, a group of ten Nounders (what Nouns call their co-founders), including Vine founder Dom Hofmann, began working on a shared Discord and created the DAO, using Punk’s blueprint 4156 as a guide for solidify the concept.
What’s so special about names?
Each NFT name is a small image of a humanoid that has been algorithmically generated on command and then stored as a 32 pixel by 32 pixel image directly on Ethereum. block chain.
The fact that the names are stored directly on Ethereum’s scarce block space, rather than containing a link to an image hosted elsewhere (e.g. on the decentralized web hosting service IPFS), is a notable difference between the names and many other NFT projects.
The algorithm that underpins the Nouns protocol forges these NFTs from a random combination of origins, body types, and clothing. Some of these names have flipbook calendars for the heads. Others wear sweaters with geometric shapes.
You can play with potential names in the Names Playground, a tool that allows you to combine various traits stored in the protocol.
Unlike the limited supply and exclusive nature of NFT PFPs like CryptoPunks or Bored Ape Yacht Club, a new name is randomly generated every 24 hours and auctioned off. After each auction ends, another unique name is struck (based on a series of predefined strokes) and the process repeats, forever. The Nouns smart contract automatically sends 100% of the proceeds directly to the DAO Treasury.
What are DAO names?
Every Nouns owner can join the Nouns DAO to help shape and govern the project by voting on Treasury-funded proposals. The DAO, which uses a compound governance fork, gives all members one vote per NFT name. While these votes are non-transferable, such as the use of proxies for board meetings, DAO members may delegate others to vote on their behalf if the delegating person or entity still owns the name used to vote.
Although there is no limit to the number of names a single entity or person can have, a minimum of two names is required to submit proposals. And founding members receive rewards in the form of names (10% of supply, or one name in ten, for the first five years).
Each name holder can sponsor and vote on proposals to be funded by the Treasury. The idea is that the more unique and interesting the said projects are, the more brand names gain awareness and the more people will want to join.
To date, the Nouns DAO has funded proposals such as:
🏈 Featured names in a Super Bowl ad – The proposal involved donating a Nouns NFT from the DAO to a company that would feature the iconic Nouns glasses in a 2022 Super Bowl commercial; the NFT eventually went to Bud Light, who duly aired the ad during the coveted ad slot. As part of the deal, Bud Light also changed their Twitter profile picture to Nouns NFT.
🎥 Names Around Town Documentary – Proposed by the creators of Robot Chicken, the proposal and project secured 609 ETH funding and focuses on making a comedy film about Nouns DAO’s attempt to get the names in the Rose Parade.
☕ coffee – Created by a team with experience in the global coffee industry, the Nouns coffee proposal secured 105 ETH in funding to create the first ever brand of Nounish consumables and place it in coffee shops and grocery stores.
How to buy an NFT Names
Names are offered for auction on the Names website, with a new name generated and offered for sale every 24 hours. They are also available on secondary markets such as OpenSea and Rarible.
As of October 30, 2022, the floor price for names was above 60 ETH (about $93,000). One of the reasons for the high sticker price is that the supply of names is very limited, as only one NFT name is released per day. Where NFT collections like Bored Ape Yacht Club and CryptoPunks typically number in the thousands, there are only 491 names at the time of writing.
Did you know?
Despite its high floor price, Nouns is only the 232nd largest NFT project with $23.3 million in secondary market sales, according to data from CryptoSlam. By comparing, Axie Infinitythe largest NFT project, generated approximately $4 billion in secondary market sales.
Open source names and IPs
Nouns is open-source and is released under a Creative Commons CC0 “No Rights Reserved” license. This means that anyone can use the name and name imagery to create anything, as it is in the public domain.
Even if you don’t own any NFT Nouns, you can create Nouns products, and people have created derivative NFT collections such as Noundles, Lil’ Nouns, 3D Nouns, and NounPunks.
You are also free to add new strokes for future names. The only caveat is that the Names codebase, including the art it contains, is primarily governed by the Names DAO, which votes on the traits included in the collection. The DAO receives all ETH used to purchase names.
As of this writing, the Treasury holds approximately $45 million. This money is used for “the long-term growth and prosperity of the Nouns Project”. Nameholders can vote on proposals submitted by other nameholders.
Discussion of names takes place on Discord and the Discourse forum site. The latter is where intense discussions take place around the governance of the protocol.
Successful votes on the governance protocol, which draws inspiration from compound governance, include a motion to establish the brand’s presence in Brazil (expect merch) and to design and distribute a monthly comic about the names for distribution across the United States (expect anthropomorphic names). Nouns DAO is also one of the backers of the feature film “Calladita”, in what is believed to be the first on-chain proposal from a DAO to fund a feature film; the deal will see a Nouns NFT featured on screen in the film.
The future of names
Despite its name, the Nouns DAO is not yet fully decentralized. The Nouns Foundation, an “ownerless” Cayman Foundation corporation created by the Nounders, has the ability to veto proposals it dislikes, such as those that “introduce significant legal or existential risks for the Nouns DAO or the Nouns Foundation.” This refers to cash raids, bribes, unwanted name updates smart contractsor attempts to control the name auction process to obtain a majority of votes.
It remains to be seen whether giving intellectual property rights immediately to a community and focusing on the governance of a brand makes a material difference in its value.
But so far, Name NFTs have become a recognizable part of the NFT ecosystem, and the Names governance structure has worked impressively, taking the project beyond pixelated little blobs with tacos and airplanes. for the heads.
Stay up to date with crypto news, get daily updates in your inbox.