Aug 8, 2022 - Economy

A quiet NFT project with a unique model turns 1-year old

Noun #1 on the right. Noun #402 (today's) on the left. Source: Nouns.wtf (Public domain)

Nouns is an NFT project that sells a new one every day for about $150,000. It just turned 1-year old today.

Why it matters: Nouns have never generated a lot of headlines, but the project has shown persistent interest from NFT collectors and seems to be a new model for building out an ecosystem around intellectual property.

How it works: Nouns are NFTs in the 8-bit style of old video games. They are made up of different components such as heads, colors of glasses and different shirt designs.

  • Each day, the system puts a new one together and it gets auctioned off to the community. Unlike a lot of NFTs, the art for Nouns really is on chain, procedurally generated by code.
  • The smart contract has lots of traits to work with. It isn't programmed to make any particular trait rare, but some are — due to randomness. It's mostly random, but the community has daily input.
  • Additionally, certain other characteristics might be seen as valuable, such as being one of the first 100 nouns. Being the 420th Noun. Or one that's featured in some kind of content.
  • The funds for each auction go into the DAO. They go for a lot. As of Friday, the last five to sell went for an average of 86 ETH (about $143,000 each).

For five years, every tenth Noun goes into a pool that belongs to the people who created Nouns. That's how the DAO pays them for making it and continuing to contribute to it (the Nounders could not be reached for comment by Axios).

  • There will be a new Noun every day until the Ethereum blockchain stops running.

What about the money? It's used to fund projects that expand the mind share of Nouns, though they are in no rush about it. So far they have funded things like:

💭 Our thought bubble: If some piece of content catches the public imagination and a Noun character becomes popular, like Nyan Cat or Hello, Kitty, it's going to make the whole set of Nouns much more valuable.

  • It's a way for creatives to bet on each other. If they each own a Noun and they all make Noun content, they all benefit if one gets a hit.

The DAO also been buying back Nouns so the DAO itself can own some. It also funded building a way for people to bid on Nouns as a group.

Play around with making Nouns yourself here.

The bottom line: Every Noun has one vote in decisions that the DAO makes. So every day each holder gets a little less powerful, but the DAO also gets one more advocate with a vested interest.

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