ENS DAO transfers control to a foundation: holders lose direct control over $65 million
The Ethereum Name Service (ENS) community has made a radical decision that changes the governance architecture of one of the most well-known decentralized projects in the industry. The initiative, called "Next Era of ENS DAO," has been approved by token holders and has already been executed. Now, the ENS Foundation is transforming from a non-profit structure into a full-fledged operating company with a hired CEO, a staff of employees, and a five-member board of directors.
The vote showed strong support: 1.2 million ENS tokens were cast in favor of the reform, with only 480,690 against. The executing transaction was carried out on the morning of August 11. This is not just a cosmetic change—it is about redistributing real power and capital.
New structure: what changes in practice
The key point is the transfer of administrative control over ENS's treasury capital. This involves a substantial amount: about $65 million in Ethereum and stablecoins accumulated from .eth domain registrations. These funds will now be controlled by the foundation, not the DAO directly. The foundation also gains authority over protocol revenue management and will handle branding, operational activities, and off-chain policy. ENS Labs, in turn, will focus on technical development, including preparation for the ENSv2 upgrade.
To pay the new team, the DAO is allocating 1 million ENS. It is worth emphasizing: about 54.6 million ENS (nearly 55% of the supply) remain in the hands of holders. Formally, coin owners retain the right to appoint and remove foundation directors. The first board has already been formed: Executive Director Alexander Urbelis, ENS founder Nick Johnson, as well as independent directors Kartik Talwar, Brett Sun, and Anthony Leutenegger.
Technically, control is implemented through the EndowmentTimelock contract with a nine-day delay, which has become the new owner of the wallet. Now, only the foundation's multisig (threshold three out of five) can queue transactions, while the Security Council retains veto power over any operations. The latter's authority expires on August 7, 2028.
Context and criticism
The conflict over governance had been brewing for a long time. The first version of the proposal appeared on June 19, when ENS Labs COO Katherine Wu published a draft for transferring operational control to the foundation. Some delegates strongly opposed it. Project co-founder Alex Van de Sande noted that after the initiative is implemented, the DAO effectively loses control over the wallet, and all spending restrictions exist only in the text of the documentation, not in the code. Curia analysts added that the mechanism for removing directors relies on Cayman Islands legislation and could take months, while the ill-fated transaction executes in minutes.
Blockful developers confirmed the contracts were correct but pointed out a weak spot: the nine-day delay does not apply to existing asset management modules such as karpatkey and the Allowance Module of the MetaGov working group. Wu countered the criticism, stating that the document had been revised, tokens remained with holders, and operational wallets were not moved.
My take: this case is yet another confirmation that "decentralization" in its pure form often gives way to pragmatic efficiency. The ENS DAO is turning into a hybrid model where token holders retain formal sovereignty, but real operational power shifts to a professional team. The only question is how justified this compromise will prove in the long term—especially given that mechanisms to protect against bad-faith actions do not yet look bulletproof.