What to Know
- ENS tokenholders approved a Foundation overhaul granting administrative control over the $65 million endowment while retaining important governance powers themselves.
- ENS Foundation will oversee finances and off-chain operations, while ENS Labs handles protocol development independently under the newly divided organizational structure.
- The restructuring follows a governance dispute involving Nick Johnson, concentrated voting power, and criticism surrounding the previous Security Council renewal process.
Ethereum Name Service tokenholders have approved an overhaul giving the ENS Foundation administrative control over its roughly $65 million endowment. The proposal secured about 70% voting support and expands the Foundation’s financial, operational, and institutional responsibilities across the ENS ecosystem.
According to the proposal, the Next Era of ENS DAO creates a full-time organization with dedicated staff, led by Executive Director Alexander Urbelis alongside a five-member board. Moreover, the Foundation will handle policy, trademark protection, institutional representation, and other off-chain responsibilities supporting the naming protocol.
ENS Labs will remain responsible for core protocol development, including technical work connected with the planned ENSv2 upgrade.
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ENS Foundation Takes Control of $65 Million Endowment
Administrative control over the $65 million ENS Endowment represents a central part of the approved governance overhaul. Revenue generated through .eth name registration fees funds the endowment and provides financial resources for the wider ecosystem.
Additionally, the Foundation will oversee protocol revenue and manage spending in accordance with published budgets approved by its board. ENS DAO will transfer one million ENS tokens to the Foundation as a one-time allocation for employee compensation.
However, the DAO retains ENS holdings representing approximately 54.6% of the token’s total supply. Endowment transactions will carry a nine-day timelock, allowing the Security Council to cancel transactions when necessary. The Foundation must also publish annual audited financial statements and provide quarterly updates covering ecosystem grants.
Governance Dispute Adds Context to ENS Restructuring
The restructuring follows a governance dispute involving ENS founder Nick Johnson and the previous Security Council. In June, Johnson self-delegated approximately 3.26 million ENS tokens, representing about half of active voting power.
He subsequently used that influence to block the onchain renewal of the existing Security Council. Johnson also supported moving daily treasury and operational responsibilities from ENS DAO toward an expanded Foundation.
Critics Brantly Millegan and Lefteris Karapetsas described his actions as a governance attack, generating considerable community criticism. ENS later seated a new Security Council as governance discussions surrounding the Foundation’s responsibilities developed.
New Structure Divides Responsibilities Across ENS Organizations
Consequently, the approved structure establishes separate responsibilities across ENS DAO, ENS Labs, and the Foundation. The Foundation handles financial administration and off-chain operations, while ENS Labs concentrates on protocol development.
Meanwhile, tokenholders retain governance authority, including the ability to appoint or remove Foundation directors. The inaugural board includes Urbelis, Johnson, Kartik Talwar, Brett Sun, and Anthony Leutenegger. Independent directors will serve renewable two-year terms, adding another governance mechanism to the Foundation’s expanded operational structure.
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