Elad on Warpcast

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Elad pfp

gm, @davidbr and I are working on the $nouns token, backed by Nouns. 1M $nouns <-> 1 Noun NFT. you're invited to read this short spec doc and reply with your feedback. thanks! https://docs.google.com/document/d/1Uz4l8bAPaA2_gsUVZsZo_1dAmggAiYIn5sYba1IK10Q/edit?usp=sharing

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Spencer Perkins pfp

Spencer Perkins

@spencerperkins.eth

Thanks for sharing, very excited for this! A few questions (in thread):

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Spencer Perkins

@spencerperkins.eth

1. For adjusted total supply, curious why not adjust by the number of Nouns held by the $nouns contract rather than the equivalent portion held by the treasury? The proposed method will make it harder for props to pass if a large number of Nouns are in the $nouns contract.

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Spencer Perkins pfp

Spencer Perkins

@spencerperkins.eth

2. While $nouns will be great to help bring people into Nouns, it also add an easy exit route for Noun owners (easier than a fork, or selling). Will there be a supply cap on $nouns or any kind of deposit rate limit to try to prevent a mass exit event?

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Spencer Perkins

@spencerperkins.eth

3. Curious about community sentiment on fungibility. NounSwap was rejected in a large part because it “made Nouns fungible”. $nouns does this to to an extreme, and NounSwap could be built directly on-top of $nouns. Is there support for $nouns from folks whom opposed NounSwap due to fungibility concerns?

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Noun 40 pfp

shared a bit here. i think it's a misnomer that $nouns makes all treasury nouns fungible. https://warpcast.com/noun40/0x99574a92

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Spencer Perkins pfp

Spencer Perkins

@spencerperkins.eth

I see where you are coming from. But, in both iterations of NounSwap we proposed a mechanism to limit the number of treasury Nouns permitted to be swapped via excluding ID's below a threshold, effectively achieving the same thing. IMO, this is a better approach: https://warpcast.com/spencerperkins.eth/0xe6238761

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yeah but i think in the context of nounswap props given the goal was to make treasury nouns available for swapping / bidding i think most would have imagined a larger portion being available (it’s more “excluding” rather than “including” in that case of $nouns) so don’t think quite the same practically

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as to limiting the creation of $nouns to the dao i don’t quite see the downsides you’re seeing to making it permissionless to warrant that limiting?

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and if $nouns price does out of wack to the upside so that it dislocates with nouns price that’s a failure case. the dao having to get involved to increase the supply to meet the demand when that happens is very bad imo

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Spencer Perkins pfp

Spencer Perkins

@spencerperkins.eth

The market will set the price of $nouns, but it will always be true that 1M $nouns could be burned for 1 Noun, which should keep the price of $nouns above the auction floor. Without allowing for melting of Nouns, $nouns would likely trade at a premium due to the limited supply, but I’m not sure this is a bad thing

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Noun 40 pfp

it would be a bad thing since the premium would be a tax on ppl trying to save up $nouns to redeem a noun one day

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Spencer Perkins pfp

Spencer Perkins

@spencerperkins.eth

Yea, I get that. But I imagine that this would incentives $nouns to be earned rather than purchased. For example distributing through rounds, or as retroactive rewards.

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yeah. what i’m saying is that the buying up use case is ALSO an important use case we’d like to support with $nouns not just the dao distribution use case

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Elad pfp

I would say that our primary focus is on giving the community a token to use for rewards, tips, and "stacking sats" towards a Noun. These needs are unrelated to nounswap afaik

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Spencer Perkins pfp

Spencer Perkins

@spencerperkins.eth

Right I totally understand that, and agree. But, don't think the melting of Nouns is required to achieve this: https://warpcast.com/spencerperkins.eth/0x234d663f

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Elad pfp

what I like about melting nouns: it's a very simple way to determine the total supply of $nouns at any point in time. no wasted energy on initial supply, max total supply, inflation rate settings, none of that. and to me the fungibility of the nouns in this pool is not a problem :)

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Spencer Perkins pfp

Spencer Perkins

@spencerperkins.eth

Yea, I understand that. But it comes with many tradeoffs, to name a few: * Nouns fungibility * Exit/rage quit route * Increases the governance attack surface (making Nouns more liquid) To be clear, I am not necessarily opposed to $nouns as it stands, but want to make sure these tradeoffs are considered.

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Elad pfp

thank you for pushing back! I'm curious if you can say more on how you would deal with these challenges in a non-noun-backed design: * fixed supply vs growing supply, initial supply, inflation rate, etc. * how do you allow people to "stack tokens" towards a Noun?

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Spencer Perkins

@spencerperkins.eth

My proposal would be to limit the ability for melting of Nouns to only the treasury, and keeping the rest exactly the same. This means that the treasury can melt Nouns, and then distribute $nouns via rounds, or props. Folks can stack these and redeem them for a Noun. This is just as simple as currently proposed

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