There is a new way to receive ETH for your Noun completely on-chain and without putting your Noun at risk in any way. Today, we will talk about the new delegation marketplace that has been created in House of Nouns and how it can completely change the governance in Nouns DAO.
What are the advantages of being a Nouner?
Nouns is a very open community that embraces all members of the comity and allows them to directly contribute to the future of the DAO. Although there is no classism within the DAO, there are advantages associated with owning NFTs from Nouns DAO that make it the driving force behind its daily selling price.
It allows for direct participation in governance with the “1 Noun = 1 vote” system, and in the case of the Nouner having 2 Nouns or more, the ability to submit on-chain proposals to receive ETH from the DAO.
What is delegation?
Nouns owners can delegate their votes to others if they don’t have the time to decide on proposals. This has resulted in multiple delegates ranging from 2 votes to 28 (5% of supply) and 14% of Nouns being currently delegated.
Although there has been an increase in voting activity, the number of delegations is still low and there are a large number of inactive Nouners voting.
What are the problems with the delegation model?
Vulnerability to fraud and solicitation in delegated voting are problemes that cannot be ignored. These activities can take place behind closed doors and can have a negative impact on the entire voting system. It is important that we take steps to address this vulnerability in order to ensure that the system remains fair and equitable for all.
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can we encourage these holders to delegate to active community members and put their votes to use?
Creating a transparent, accessible, and permissionless market for these votes is one way to address this issue and increase the utilization of votes, as well as increase the value of a Noun. This innovation is sure to have a positive impact on the system as a whole.
What are delegation markets?
The process of allowing interested parties to bid for the delegation of a noun involves providing an opportunity for those that are interested in the noun to put forward a bid in order to gain control of the noun. This process provides an opportunity for those interested to compete and be chosen to take on the responsibility or task associated with the noun in question.
To facilitate this, an “Agora” delegation marketplace has been created to offer financial incentives to Nouners for delegating their Nouns. Through this new platform, Nouners can put their delegation up for auction completely onchain and without putting their Noun at risk.
How did the recent vote auction create an exciting precedent for Noun owners?
The recent vote auction on the delegation market has created an exciting precedent for Noun owners to earn attractive returns on their votes. On January 18, 2021, Necfas won the inaugural vote auction, paying 2.2ETH to delegate Noun 174 for a 3-month period. This translates to an implied yield of almost 30% APR, which could be a major incentive for Noun owners to put their votes up for auction and further the project’s mission.
How could this system of incentives improve the platform’s governance?
The new vote auctions have created a system of incentives for participants to actively engage with the platform and vote on proposals. With this new system of incentives, and the potential for high returns, it remains to be seen how many dormant votes will be funneled into the hands of active participants.
We will continue to monitor the evolution of this new initiative that has just been created in Agora. If successful, this could be a very important swift for Nouns as a community and its collection of NFTs. On the one hand, members without Nouns will be able to access the experience and privileges of being a Noun holder by paying a small amount and Nouners will be able to find, in this mechanism, a way to make their investment profitable in a simple and completely on-chain manner.