Nouns is one of the most interesting NFT projects and communities to come to market.
Every day, a new, semi-randomly generated NFT character (known as a Noun) is created and put on auction for 24 hours. Anybody can bid on the public auction to acquire a Noun, creating a unique, daily dynamic with every new Noun revealed. Each Noun is generated wholly on-chain and according to the mechanisms of the Noun Protocol smart contract. Every day the growing Noun community wants to know which new Noun will be revealed, who will be bidding on it, and what will the winning bid be.
All of the funds generated from the sale Nouns are secured in the Nouns DAO treasury. Voting on what the treasury is used for is controlled by the Nouns holders themselves. One Noun equals one vote. This novel approach ensures that there is complete alignment amongst all Nouns holders on how to increase the value of the Nouns for the long term and how to allocate resources.
In the short 149 days of Nouns existing, the treasury has already generated 16,361 ETH (or over $65 million) to be invested in building future Nouns initiatives, and has already executed 25 of the proposals it’s received from members. Successful proposals have included staking 10% of the treasury in Lido (which we covered in our newsletter), funding an initiative to provide prescription glasses to children in need (fitting, as all Nouns have glasses), and a recent proposal to send a 3D-printed Noun to the International Space Station.
In addition to the daily interest the auction mechanism creates, the project incorporates a number of unique and novel approaches to the creation of a PFP community.
The Nouns project is:
Released under a Creative Commons license (CC0)
The combination of these factors makes the possibilities for Nouns almost infinite. By being released under an open-source and Creative Commons license, Nouns holders and non-holders alike are able to create derivative works, generative art projects, and new collaborations with Nouns without requiring the permission of the Nouns founders.
We’ve seen in traditional open-source software how this allows for the rapid acceleration and development of both the software and the community built around it. In the NFT space, we’re seeing this debate about open access vs. more conventional copyright play out very publicly. On the one side, there’s Larva Labs (the company behind CryptoPunks), which retains the rights to all Punks. On the other, there are advocates of CC0 (or “no rights reserved”) models like the creators of Nouns and CrypToads.
While we understand the desire to protect IP, we’re advocates of an open Metaverse, and we believe that encouraging remixes and derivatives makes projects more vibrant, not less so, and drives value creation in the long run. CC0 enables network effects and can bring vitality to projects from people who aren’t even directly invested in them. While not a true CC0 project, we’ve seen Bored Ape Yacht Club’s decision to let owners of its NFTs do whatever they want with them create an array of spin-off projects, incredible hype, and massive growth in the project’s market capitalization as a result.
In fact, BAYC this week eclipsed the value of CryptoPunks, despite being less than a year old. Although there are many variables that have contributed to this, one of them is undeniably how much the BAYC community has done with the IP they’ve acquired, making holding one deeply desirable, and creating incredible demand and a level of recognition no other PFP project outside of the NFT space that’s currently unmatched.
Because it also follows this open approach, we consider Nouns “a network in Nouns clothing” and the start of the first truly decentralized, diverse, and global PFP network built around Nouns as the core asset.
We are already starting to see an influx of new developers and artists building Nouns games, derivative artworks, and imagining Nouns Metaverse worlds, all driven through a decentralized community.
It is with this understanding of the inherent potential of Nouns that Metaversal decided to acquire Noun #9. In our quest to acquire the iconic NFT assets that will build the Metaverse, we wanted to be early in the Nouns community so that we could become actively involved in the development of the Nouns network. We also believe that, as the community grows and Nouns become more popular, a single-digit Noun serial number will become an iconic and treasured asset — hence our acquisition of the last single-digit Noun and first “animal” Noun (a bat).
Lastly, the Nouns team that created Noun chose to incentivize itself through an extremely unique and novel approach. The team’s only reward is the ownership of every 10th Noun generated (limited to the first five years). This mechanism shows the long-term commitment and true alignment from the founding team on where value will be attributed and created.
It is these elements that gave us the motivation and conviction to be among the first 10 Noun holders in the world and to invest 155 ETH ($512,960) in order to attain that position.