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38 changes: 38 additions & 0 deletions packages/nouns-docs/content/governance/auctions.mdx
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---
title: "Daily Noun Auctions"
description: "Nouns NFT Daily Auction Mechanics"
sidebarTitle: "Auctions"
---

The auction mechanism is one of the core operational pillars of the Nouns DAO protocol. Each day, one new Noun NFT is minted and placed up for auction, the proceeds from the auction flow directly into the DAO treasury, and membership and governance rights are created in the process. This article walks you through how the auction works, step-by-step, its logic, and the implications for participants and the DAO.

---

## How auctions happen

1. **Minting & creation of a new Noun** – A new Noun NFT is generatively minted on the Ethereum blockchain. The art is deterministic based on the hash of the block in which the Noun is minted.
2. **Auction start** – The freshly minted Noun is escrowed in the auction house contract, and a 24-hour auction begins.
3. **Bidding phase** – Anyone can place bids (in ETH) so long as the auction is still active, and the bid meets the minimum-increment rules.
4. **Auction settlement & transition** – Once the auction ends, any user can execute a settle-and-create transaction: the winner receives the Noun, the funds are transferred to the treasury, and a new auction is immediately created - all in the same transaction.
5. **Continuous cadence** – The cycle repeats: “one Noun, every day, forever.”

## Key parameters & rules

- **Minimum bid increment** – The auction house imposes a minimum bid increment. New bids must exceed the current bid by a defined percentage.
- **Auction Duration** – Each auction has a defined duration of 24 hours.
- **Transfer of funds & Noun** – When the auction is settled, ETH from the winning bid goes to the treasury and the Noun is transferred to the winner. In the same transaction, a new Noun is minted and the next auction begins.
- **Single supply per period** – Only one Noun is minted and auctioned each day, preserving the cadence and ensuring regular growth of supply and treasury simultaneously.

## Why this mechanic matters

- **Perpetual funding model** – The auction generates consistent inflows to the treasury, enabling the DAO to scale its operations without relying on a one-time drop/sale.
- **Governance access via ownership** – Winning the auction isn’t just owning an artwork: it grants membership in the DAO and voting rights (one Noun = one vote).
- **Transparency & trustlessness** – Because the process is onchain and parameters are fixed within the protocol, the community can audit the process, verify outcomes, and trust the cadence.

## How to participate in an auction

- Monitor the live auction interface (e.g., at nouns.wtf) to see the current Noun up for bid.
- Ensure your wallet is funded with sufficient ETH and you understand gas costs.
- Submit a bid that exceeds the current winning amount by the minimum increment.
- If you win, receive the Noun NFT and gain governance membership; if you don’t win, your funds are returned (assuming you were outbid).
- For non-winners, secondary market entry is possible, governance rights transfer along with ownership of each Noun.
53 changes: 53 additions & 0 deletions packages/nouns-docs/content/governance/candidates.mdx
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---
title: "Candidates"
description: "Learn how proposal candidates work."
sidebarTitle: "Candidates"
---

Within the Nouns DAO ecosystem, every proposal starts as an idea - and often as a “candidate”. A candidate proposal gives community members a chance to signal interest and gather feedback before a formal onchain submission. This article explains how candidates work, how ideas progress into formal proposals, and how you can participate in or support the process.

---

## What is a Candidate?

A candidate is essentially an early stage proposal posted to community channels (such as the Discourse forum) for feedback, refinement and sponsorship. It allows non-holders or early-stage ideas to surface and iterate before being submitted on-chain. For example:

- One discussion thread noted: “you can absolutely use the candidate functionality which doesn’t require you to hold Nouns to put a proposal forward.”
- The official site indicates that proposals must be submitted on-chain by Noun holders and meet certain thresholds.

```mermaid
flowchart LR
A[Idea / Concept] --> B[Post as Candidate]
B --> C[Community Feedback & Sponsorship]
C --> D[Formal Proposal Submitted Onchain]

```

## Why Use Candidates?

Using the candidate stage offers multiple benefits:

- **Feedback & refinement**: You can gather community input and iterate your idea before locking in the proposal for voting. Getting feedback early helps identify weak aspects (budget, clarity, alignment) before escalation to the onchain governance process.
- **Sponsorships**: If you don’t have the required Nouns or delegation for submitting a proposal onchain, you can attract Noun holders to sponsor your idea.

## How the Process Works

### 1. Post the idea as a candidate

Create a candidate through your preferred governance client. Include a clear overview: what you propose, why it matters, how it aligns with Nouns DAO goals.

### 2. Gather feedback and iterate

Invite discussion, respond to comments, refine your deliverables, budget and metrics. Networking in the Discord or Farcaster ecosystem helps increase visibility.

### 3. Secure sponsorship (if necessary)

If you are not a Noun holder or do not meet onchain submission thresholds, you’ll need a sponsoring Noun holder who agrees to advance your idea to an onchain proposal.

### 4. Formal submission onchain

Once ready and sponsored, the proposal author submits the proposal. Requirements include holding minimum voting power and maintaining it through execution.

### 5. Voting & execution

After submission, the proposal enters the official voting process: an editable period, pending phase, active voting window, then if it passes - security delay, and finally execution.
30 changes: 30 additions & 0 deletions packages/nouns-docs/content/governance/nouns.mdx
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---
title: "What is a Noun?"
description: "Learn about Nouns NFTs and the rights that are included with ownership."
sidebarTitle: "What is a Noun?"
---

A **Noun** is an onchain generative NFT that functions both as a digital collectible and a membership token within the Nouns DAO ecosystem. Owning a Noun grants governance rights within the DAO.

## The Art

Each Noun is a 32 × 32 pixel avatar, stored fully on the Ethereum blockchain (not merely a link to off-chain storage). Traits are algorithmically generated and include background, head, body, accessory and glasses (also known as “noggles”).

The art is open-source under a [CC0 license](/legal/cc0) (public domain), meaning anyone may reuse, remix or build upon the imagery.

## Daily Auctions

A distinctive feature of Nouns DAO is that **one Noun is minted and auctioned every 24 hours, forever**. 100% of auction proceeds flow into the DAO’s treasury, supporting ecosystem growth and public-goods initiatives. Read more about the [Auction Mechanics](/governance/auctions).

## DAO Membership

By owning a Noun you automatically become a member of Nouns DAO. Each Noun grants one vote in governance. There is no hard cap on how many Nouns an individual may hold, and voting power scales proportionately with holdings (1 Noun = 1 vote).

---

## Key Takeaways

- A Noun is a 32 × 32 pixel avatar stored fully on-chain and minted via a daily auction.
- Holding a Noun grants membership and governance rights within Nouns DAO.
- The Noun art and brand are CC0 - free to use, build upon and extend.
- This model is distinct in the NFT/DAO space because it integrates identity, funding and governance with a perpetual cadence and open IP.
12 changes: 6 additions & 6 deletions packages/nouns-docs/content/governance/proposals.mdx
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Expand Up @@ -30,25 +30,25 @@ import { Table } from 'nextra/components';

Proposals are at the heart of Nouns DAO's governance. They allow community members to propose transactions to be executed by the DAO, such as funding projects, updating governance parameters, or adding new artwork to the collection.

Each proposal goes through a voteing process where Noun holders (& delegates) can express their support or opposition. Proposals that receive enough support are executed, allowing the DAO to take action based on the community's collective decision.
Each proposal goes through a voting process where Noun holders (& delegates) can express their support or opposition. Proposals that receive enough support are executed, allowing the DAO to take action based on the community's collective decision.

## Who can propose

Anyone who has at least <code className="nextra-code">{await nounsRequiredToPropose()}</code> votes can create a proposal.
If you have less than that, you can still participate by creating a **Proposal Candidate**.
The requirement for proposing is 25 bps of the circulating supply of Nouns. If you have less than that, you can still participate by creating a **Proposal Candidate**.

> [!TIP]
> Each account can only have one active proposal at a time. If you have an active proposal, you must wait for it to go through the voting period before creating a new one.


### Proposal Candidates

Proposal Candidates are proposals that are not yet ready for voting. Then can be upgraded to proposals once they reach the minimum threshold of <code className="nextra-code">{await nounsRequiredToPropose()}</code> votes, counting the proposer votes and any votes from sponsors.
Proposal Candidates are proposals that are not yet ready for voting. This is a way for proposal authors to seek feedback on their proposal and/or sponsorship from Noun holders. When a candidate reaches the required minimum threshold of <code className="nextra-code">{await nounsRequiredToPropose()}</code> votes, including the proposer's votes and any votes from sponsors, it can then be upgraded to a proposal.

## Who can vote

Anyone who holds Nouns or has [Delegated votes](/governance/delegation) can vote on proposals.
The amount of votes you have in each proposal is determined when the vote starts.
The amount of votes you have in each proposal is determined at the time the vote starts.

## Approval criteria

Expand Down Expand Up @@ -148,7 +148,7 @@ The main voting period where token holders can cast their votes for or against t
- Voters can cast For, Against, or Abstain votes
- Vote snapshot (how many votes each delegate has on the prop) is taken after the Pending period (not at proposal creation)
- Succeeds if more For votes than Against votes AND has more For votes than the dynamic quorum threshold
- May trigger an [Objection Period](#objection-period) if proposal swings from defeated to successful near the end
- May trigger an [Objection Period](#objection-period) if proposal swings from defeated to successful near the end (this is currently disabled)


### Defeated
Expand Down Expand Up @@ -189,7 +189,7 @@ Proposals can be cancelled at any moment before they are Defeated or Executed.
If a proposal changes from defeated to successful close to the end of the Voting period, it enters the Objection Period.
During the Objection Period, only "Against" votes are allowed (no For votes).

This mechanism protects against last-minute vote manipulation.
If enabled, this mechanism protects against last-minute vote manipulation. It is currently disabled.

### Expiration

Expand Down
23 changes: 23 additions & 0 deletions packages/nouns-docs/content/governance/voting.mdx
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---
title: "Voting"
description: "Voting"
sidebarTitle: "Voting"
---

Voting is the core mechanism through which members of Nouns DAO turn ownership into meaningful governance power. Every vote influences how the treasury is spent, what projects are funded and how the ecosystem evolves.

---

## Voting Power

- Each Noun NFT equals **one vote** in the Nouns DAO governance system.
- Voting rights are tied to ownership: if you sell your Noun, you relinquish the associated vote.
- Delegation is supported: you may delegate your voting power to another wallet (a delegate) who can vote on your behalf.

```mermaid
flowchart LR
Own_Noun[Owns Noun NFT] --> Vote_Power[1 Vote]
Vote_Power --> DirectVote[Vote directly]
Vote_Power --> Delegation[Delegate to Another]
Delegation --> DelegateVotes[Delegate casts vote]

35 changes: 35 additions & 0 deletions packages/nouns-docs/content/legal/cc0.mdx
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---
title: "CC0 and What it Means"
description: "More info about the CC0 License"
sidebarTitle: "CC0"
---

The term CC0 refers to the Creative Commons Zero public-domain dedication - a legal tool that allows creators to waive all rights under copyright law so that others can freely use, remix, and build upon the work.

---

## What CC0 Means in Plain Terms

When something is released under CC0:

- It is as close to the public domain as legally possible.
- Anyone can copy, modify, distribute, or commercially use the work without asking permission or paying royalties.
- The original creator retains no exclusive rights that prevent others from acting on the work.

## Why It Matters for the Nouns Ecosystem

Nouns DAO adopted CC0 for its IP - the artwork, technical stack, and brand identity tied to the Nouns collection. This means:

- The artwork is in the public domain and free for anyone to reuse, remix, brand, or commercialize.
- Builders, artists, entrepreneurs and community members are empowered to extend the ecosystem without licensing friction.
- The model supports an open, decentralized growth mindset: by removing IP barriers, more creative derivatives and brand extensions become possible.

## Practical Implications

With the CC0 status of Nouns, here’s what’s enabled:

- Free commercial use: projects can use Nouns imagery in products, services, merchandise, marketing or whatever they choose.
- Remixing and derivatives: creators can take the base NFTs, modify them, combine them, extend them into new artwork or applications.
- Brand extensions: community-driven brands can adopt Nouns characters (or motifs) to launch physical goods, digital experiences, real-world activations.
- Ecosystem growth: since reuse is free and encouraged, cultural proliferation can drive awareness, network effect and new collaborations.

10 changes: 9 additions & 1 deletion packages/nouns-docs/content/legal/duna.mdx
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## References

- ["The DUNA: An Oasis For DAOs" article by a16z](https://a16zcrypto.com/posts/article/duna-for-daos)
- [Wyoming DUNA bill](https://www.wyoleg.gov/Legislation/2024/SF0050)
- ["Exploring a New Legal Framework for Nouns DAO | The Wyoming DUNA" article by The Nouns Foundation](https://foundation.nouns.wtf/2024/09/06/duna/)
- [Nouns DUNA bylaws](https://github.com/nounsDAO/duna-bylaws/blob/main/bylaws.md)
- ["The DUNA: An Oasis For DAOs" article by a16z](https://a16zcrypto.com/posts/article/duna-for-daos)
- ["A Legal Framework for DAOs (Part I)](https://cowrie.io/articles/part-1)
- ["A Legal Framework for DAOs (Part II)](https://cowrie.io/articles/part-2)
- ["A Legal Framework for DAOs (Part III)" by Cowrie](https://cowrie.io/articles/part-3)
- [LexDAO Study Group | DUNA Session](https://www.youtube.com/watch?v=HUt8N4eMBE8)
- [Miles Jennings: Understanding Wyoming's Decentralized Unincorporated Nonprofit Association (DUNA)](https://www.youtube.com/watch?v=0IqAgCs5-qo)
- ["DUNA 101: A Founder’s Guide to Wyoming’s DAO Legal Framework" by Toku](https://www.toku.com/resources/duna-101-a-founders-guide-to-wyomings-dao-legal-framework)
- ["Wyoming’s DUNA Law – A Legal Framework for Non-Profit DAOs and Open-Source Blockchain Networks" article by James R. Holbein of Braumiller Law Group PLLC](https://www.braumillerlaw.com/wyomings-duna-law-a-legal-framework-for-non-profit-daos-and-open-source-blockchain-networks/)
55 changes: 55 additions & 0 deletions packages/nouns-docs/content/legal/faq.mdx
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---
title: "FAQ"
description: "Frequently asked questions about DUNAs and our compliance processes."
sidebarTitle: "FAQ"
---


### KYC

**Why is KYC required for proposers and grantees?**
To comply with U.S. and international financial regulations, ensure funds are sent to legitimate recipients, and reduce risks of fraud.

**What information is required?**
- Full legal name
- Government-issued ID
- Date of birth
- Tax identification forms (W-9, W-8BEN, or W-8BEN-E)

**Who handles KYC verification?**
We use [Persona](http://withpersona.com), a trusted third-party provider specializing in secure, privacy-compliant identity verification.

**Is my personal data safe?**
Yes. Persona maintains compliance with GDPR, CCPA, and other global data protection standards.

**What happens if I refuse KYC?**
Refusing KYC will result in the proposal being flagged as noncompliant. The DAO will be notified and future participation may be discouraged or prevented.

**Does everyone in the DAO need to complete KYC?**
No. Only grant recipients must complete KYC. Voters, delegates, and DAO members do not need to submit tax info unless requesting a grant.

**Are retroactive grants included?**
Yes. All future disbursements, including retroactive payments, require KYC.

---

### Tax & Compliance

**Do I owe taxes on DAO income?**
Yes. Grants are generally considered taxable income. You are responsible for reporting and paying taxes according to your jurisdiction.

**Will I receive a tax form?**
- U.S. recipients: A 1099 form will be issued where applicable.
- International recipients: Forms vary depending on local tax laws and W-8BEN/E documentation.

**How do I report this income?**
Treat it as self-employment, freelance, independent contractor income, etc. It is highly recommended that you consult a tax advisor for personalized guidance.

**Will the DAO withhold taxes?**
Not automatically. If a recipient fails to provide tax documentation, the DAO may be required to withhold 24% under IRS backup withholding rules.

**Do international grantees need to comply with U.S. tax rules?**
You must comply with local laws, but since Nouns DAO is a U.S.-based legal entity (Wyoming DUNA), you may also have U.S. tax obligations such as treaty compliance or withholding.

**What are the consequences of non-reporting?**
Failure to report may result in penalties, audits, or legal consequences, especially as global enforcement on crypto income tightens.
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