The ENS DAO transferred control of $65 million in assets to a new structure: what has changed
The Ethereum Name Service (ENS) ecosystem is entering a new phase of its development. ENS token holders have adopted and executed a landmark decision to radically reform the governance model. The ENS Foundation, previously existing as a non-profit organization, is now transforming into a full-fledged operating company with a hired executive director, a staff of employees, and a five-member board of directors.
Voting details and key changes
According to data from the analytics platform Agora, the "Next Era of ENS DAO" initiative received overwhelming support: 1.2 million tokens were cast in favor, while only 480,690 holders voted against. The executing transaction was carried out on the morning of August 11, marking the transition to the new structure.
The Foundation now takes on responsibility for off-chain policy, branding, and operational activities. In turn, ENS Labs will focus exclusively on the technical development of the protocol, with the long-awaited ENSv2 upgrade as its key priority.
The most significant change is the transfer of administrative control over ENS's endowment capital. This refers to approximately $65 million held in Ethereum and stablecoins as of the end of July. These funds are generated from revenue from .eth domain registrations, and the Foundation will now have full control over both these assets and all future protocol proceeds.
Control mechanisms and the new board
Despite the transfer of control, token holders retain significant levers of influence. They retain the right to appoint and remove foundation directors. At the same time, nearly 55% of the supply (about 54.6 million ENS) remains in the hands of the community. To pay employee salaries, 1 million ENS was allocated to the new structure.
The first board of directors is as follows:
- Executive Director Alexander Urbelis;
- ENS founder Nick Johnson;
- Independent directors — Karthik Talwar, Brett Sun, and Anthony Leutenegger.
The technical implementation has also undergone changes. The EndowmentTimelock contract with a nine-day delay has become the new owner of the wallet, replacing the previous DAO mechanism. Now, only the Foundation's multisig (threshold — three out of five) can initiate transactions, while the Security Council retains veto power over any operations. Its authority to block transfers will remain in effect until August 7, 2028.
Context and criticism
The governance conflict surrounding the reform had been brewing for a long time. As early as June 19, ENS Labs COO Katherine Wu published the first version of the proposal, which drew mixed reactions from the community. Some delegates expressed serious concerns. Co-founder Alex Van de Sande warned that after the initiative is implemented, the DAO would effectively lose control over the wallet, and all spending limits and conflict-of-interest policies would exist only in text, not in code.
Analysts from Curia add that the director removal mechanism relies on Cayman Islands law and could take months, whereas a transaction executes in minutes. Blockful developers confirmed the correctness of the contracts but noted that the nine-day delay does not apply to two existing modules — the asset manager karpatkey and the Allowance Module of the MetaGov working group.
In response to criticism, Wu stated that the document was revised following the first discussion, DAO tokens remained with holders, the operational wallet was not moved, and endowment transactions received a timelock and an independent cancellation mechanism.
Recall that in February, ENS Labs had already made a strategic decision to abandon creating its own L2 network, Namechain, in favor of scaling on top of Ethereum.
My take: this step is a dual signal for the industry. On the one hand, it demonstrates a pragmatic approach to governance, where a decentralized structure delegates operational authority to a professional team. On the other hand, it is a precedent that calls into question the inviolability of DAO principles. The ENS community's ability to effectively oversee the new directors will serve as a litmus test for the entire ecosystem of decentralized autonomous organizations.