Nouns DAO: Using Open Source NFTs to Create a Multi-Million Dollar Brand?

NFT projects are often seen as nothing more than a massive bubble and an ugly-looking profile picture. However, Nouns DAO is attempting to create a multi-billion dollar open-source brand. Let’s look at what Nouns are, their accomplishments, and where the project could go.

Regarding NFTs, some of the most notable names include Bored Ape Yacht Club, CryptoPunks, and Azuki. These projects are known for their sky-high prices, exclusivity, and lack of utility besides access to a community or new NFT projects. On the other hand, Nouns is attempting to build a brand out of its artwork and community and take a unique approach to add new members.

Nouns was created after anonymous crypto influencer, Punk4156, Tweeted about creating a new NFT project with support from some of the most elite developers and artists in the space. It was released in mid-2021 with an initial supply of zero NFTs. Every day, a new randomly-generated Nouns NFT goes up for auction on their website, and there is a theoretically infinite supply. The NFTs themselves, unlike some other projects, are directly stored on the Ethereum blockchain instead of using another storage solution like Amazon Web Services or the InterPlanetary File System. The money spent on the new Nouns NFTs goes to the treasury, which is governed by token holders. Currently, the treasury holds almost 28,000 ETH, worth $45.6 million at current prices.

Their website states it is an experiment to “bootstrap identity, community, governance, and a treasury” all in one project. The DAO, which has had 239 votes to date, has helped increase brand awareness through several initiatives. For example, Bud Light included Nouns imagery in their 2022 Super Bowl commercial in exchange for one NFT. Other actions taken by the DAO include funding a documentary, an animated series, and an AI research group. There is also a Nouns coffee brand, bringing digital assets into the real world in a fun, caffeinated manner. Most recently, a Nouns-inspired fashion line was created, and is another example of the brand permeating the real world.

The NFTs are all open-source intellectual property, meaning anyone can use them in branding or merchandise, even if they do not own a Nouns NFT. While this arguably provides less value to token holders, it significantly increases the possibility for the brand to be adopted and utilized by entrepreneurial minds without requiring the purchase of a five-figure speculative asset. 

Currently, the NFT project has a market capitalization of $36 million and around $100 thousand in daily volume, putting it securely in the top 20 projects. The floor price is 35 ETH, or $60,000. At the Summer 2022 high, each NFT went for over 100 ETH. This was due to various factors, but namely the massive NFT bubble and the small Nouns circulating supply. Over time, as more NFTs are put in circulation, it can be expected that this price will decrease, especially since it dilutes the voting rights of current holders. However, if the DAO can keep up its impressive business development and continue growing the Nouns brand, its growth could outpace inflation and help the project find newer highs. Like with any NFT project, Nouns is a massive risk and is not helped by its high price and relative illiquidity, and should be invested in with care and caution.

By Lincoln Murr

Related Articles