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6/ NounsDAO's strategy relies on impactful memes to boost Nouns NFT value, increasing treasury funds. However, current financial forecasts suggest this flywheel could stop by January 2025 (worst case) or May 2025 (best case).
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5/ If a fork occurs, reducing funds by 30%, the runway shortens to 7.56 months under aggressive spending and 8.95 months under conservative spending.
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4/ If no fork occurs, NounsDAO has 10.8 months of funds left under aggressive spending and 12.78 months under conservative spending.
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3/ Aggressive spending projections show a yearly expenditure of 1,750 ETH + 17,506,048 USDC. Conservative spending estimates 1,741 ETH + 13,751,448 USDC. These forecasts impact the Cash Runway significantly.
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2/ Since the latest fork on November 17, 2023, NounsDAO's treasury balance has been declining steadily. Over six months, it spent 3093 ETH, leaving 5519 ETH as of May 28, 2024.
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1/ In startups, Cash Runway measures how long a company has before it runs out of cash. In NounsDAO, a 7-month Cash Runway means its treasury is empty and funding for proposals stops.
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Cash Runway Analysis: NounsDAO treasury will be depleted in 7.56 months https://mirror.xyz/0x5a97732611042D2f65447F7E20D4976085CCe88D/_LGFYNrUBgufJJT8EnLtKmLBJmPpmfLs7MyNv5riiSA
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What happened?
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7/ NounsDAO hasn't done anything wrong. It's one of the most meaningful NFT projects out there. But the market's viability is a different story. The flywheel we relied on is at risk.
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6/ As of now, the auction price of a Noun is 6 ETH, with a total circulating supply of 562. This gives us a valuation of around 12 million USD. The market's downturn impacts us all.
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5/ The initial success of NounsDAO relied on the NFT bull market. From Aug 2021 to Aug 2022, we accumulated nearly 30,000 ETH. But as NFT market liquidity dries up, sustaining the treasury becomes challenging.
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4/ Now, what if a fork occurs? A fork reduces the treasury by 30%. Post-fork, the balance would be 15,453,200 USDC. This translates to: 7.56 months under aggressive spending 8.95 months under conservative spending
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3/ Let’s break down the cash runway. With the current treasury of 5519 ETH (equivalent to 22,076,000 USDC), we have: 10.8 months under aggressive spending 12.78 months under conservative spending
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2/ If we project aggressively, NounsDAO could spend 1,750 ETH + 17,506,048 USDC over the next year. A conservative estimate would be 1,741 ETH + 13,751,448 USDC. The difference hinges on key proposals and service payments.
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1/ Post the latest fork on Nov 17, 2023, NounsDAO has seen significant spending. Over 6 months, the net expenditure was 3093 ETH. This rate of spending is critical for forecasting our cash runway.
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However, this vote wasn't about strategy. It was simply a request for Nouns product audit fees. A small feature, where the token is the product, could be more competitive on Farcaster. Some community members need this use case, similar to $degen use cases on Farcaster.
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I agree. The defeat of Proposal 536 stemmed from a misunderstanding. It was perceived as a strategic vote, imagined as a conflict between the tokenized NounsDAO and the NFT community's NounsDAO strategies. Opponents rejected this route due to concerns about regulatory issues and an incomplete token model.
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