I haven’t used this newsletter in two years. I want to write more often - I’m challenging myself to release one blog post every day until July 1st. There will be mistakes and typos. Feedback is appreciated. The easiest place to find me now is on twitter.
Intro
I’ve been thinking a lot about the concept of a “decentralized brand” recently. If you’re deep in the NFT space you’ve probably heard of Nouns DAO and the concept of CC0. If you haven’t, a quick primer:
A DAO is a Decentralized Autonomous Organization. That sounds like mambo jumbo, so - in practice, it’s a community of token holders voting democratically on what their community should do. These decisions include hiring people to do things for the DAO, granting money to projects, voting on product decisions. A DAO can be building a community, a product, or simply a brand. All this is easily done through the blockchain because only token holders can participate and the sending of funds can be automated.
CC0 is a form of licensing that is essentially the opposite of trademarking something. You can’t start a company that sells t-shirts with Mickey Mouse on it - Disney owns that trademark and they would sue you. However, Winnie the Pooh recently “entered the public domain” - that means you can do whatever you want with that Intellectual Property. CC0 puts something directly into the public domain, essentially relinquishing control of the trademark so that anyone can build on top of their brand.
Nouns DAO launched an interesting experiment last year that has been gathering a lot more steam recently. The base concept:
A DAO is automatically creating and auctioning 1 new NFT per day - forever.
The funds from each sale go to the DAO’s treasury.
The NFT that is sold gives the owner one vote in the DAO
The DAO then votes on allocating those funds.
Participants essentially buy membership into the organization, and immediately have power in deciding what happens with the treasury, including the money I just sent it. (This is like if owning Jordans entitled you to voting on their collabs)
The art around the NFTs and the brand is entirely CC0 - anyone can use any part of the brand for free. (this is like if you could create “Jackie’s Nike Store” where you sold your custom designed Nikes)
The explicit goal of the DAO is to spread the Nouns brand, and it uses most of its treasury towards that.
What Nouns DAO did
All parts of Nouns DAO work together to create something new that’s never been seen before:
The daily auction is a massive improvement from the one-time distribution of the current NFT projects (some thoughts here).
The NFT as entry into the DAO is much more powerful than fungible social tokens, which most DAOs use.
The idea that I, as a customer of the brand, have a clear stake in a brand and can allocate its funds is fascinating - like a cultural ponzi - I’m incentivized to get more people to care about Nouns because it will make the perceived value of my Noun higher. As more people buy a Noun, they want to spread the brand, increasing the value, etc..
Additionally, as a non-member, I’m incentivized to care about Nouns because they have $28,000,000 to give out. While each DAO is different, Nouns don’t seem particularly focused on getting a certain ROI for their treasury. Instead, they want to spread the Nouns brand. That is the explicit goal of most proposals that are approved.
As a result, a massive ecosystem has grown around Nouns. They’ve sponsored events, esports teams, and physical glasses brands. People have made forks, community members have built new symbols ( “ ⌐◨-◨ ” emerged as a community meme), people built random tooling around it. I could go 10 layers deeper but I’ll pause for now.
A key value prop of Nouns is that it is very decentralized. It runs on its own, has no employees or CEO. The only caveat is that a team of 10 (the “Nounders”) built the initial branding, the art that generates the NFTs, the initial infrastructure, receives 1 in every 10 Noun, and has veto power for all proposals (they’ve said they’d only use it in situations involving “bad actors”, which everyone trusts).
They have 10% of all votes as a result, which isn’t trivial but not significant. I’d argue more of their influence is unofficial - punk4156, gremplin, and seneca among others are widely seen as stewards of the brand and creators. If they had a strong opinion on something, I’m sure many would follow.
I think Nouns is innovative and amazing, but I have reservations about its long term success as a brand for the masses. It has a great symbol and visual identity, but it is clearly associated with “crypto nerd that cares about things like Nouns DAO” as a brand. The pixel art will not appeal to a large chunk of the population (unless pixel art goes mainstream). Its non-visual brand is largely “inventor of the Nouns DAO model” - part of its curse as the first mover. What else does “Nouns” stand for? Why would a non-crypto person care about it?
Proposal for a Massive 100% Decentralized Brand
Something that I’m interested in (and also scared by) is the idea of creating a 100% decentralized crypto-native brand that could go actually mainstream. It would start as a “Nouns fork” built with the 1-Click Nouns Builder I’m working with the Zora team on - it would have an auction, DAO, etc...
However, there would be no “Nounders” equivalent. There would be no art to start. Maybe no name (I like “The Brand” as a placeholder). An NFT would be auctioned every day (but I think the auction frequency should decrease exponentially to adjust for demand)
Together, the early members, potentially using the (at first, small) treasury of the Brand, would define the brand and what it means together. Big decisions would be made by voting.
The goals of the brand should include:
Build a unique visual identity that can cater to non-crypto people
It must be remixable, like the Nike swoosh or Off White’s quotes or any Drake album cover
The non-visual part of the brand should stand for something meaningful and clear, ideally empowering people to “___”
Foster a dope social community that people want to be a part of. Do it slowly. Mostly young people who actually understand the current culture
Find an “anchor” for the brand (computers for Apple, sportswear for Nike, gaming for 100 Thieves) - even the most low-effort fashion brands have an anchor in “we sell t-shirts.”
The Brand could take the best parts of the last year’s learnings - from FWB to Nouns - and use them to build something truly epic that reaches outside of crypto. It would be an experiment in decentralization, community, art, and culture. It would be a lot of fun and I want to do it.
Interested? Let’s chat about this post! DM me on Twitter.
Things that have influenced my thinking:
Headless Brands and Squad Wealth by Other Internet
FaZe Clan by Zoe Scaman
Conversations with giga brains
Honestly a lot of other small things I don’t keep track off