ENS DAO transferred control of its fund and capital of $65 million to a new structure.
The Ethereum Name Service (ENS) ecosystem has completed a landmark stage in its evolution. ENS token holders approved and executed a governance reform that radically changes the project's architecture. The non-profit ENS Foundation has been transformed into a full-fledged operating company with a hired executive director, a staff of employees, and a five-person board. This decision is not merely an administrative reshuffle, but a fundamental shift in the balance of power within one of the oldest crypto protocols.
The vote on the "Next Era of ENS DAO" initiative concluded with convincing support: 1.2 million tokens "for" versus 480,690 "against." The executing transaction was carried out on the morning of August 11. Now, the foundation takes on off-chain policy, branding, and operational activities, while ENS Labs will focus exclusively on protocol development, particularly on preparations for the ENSv2 upgrade.
Key point: control over capital
The most important change is the transfer of administrative control over ENS's treasury capital to the foundation. As of the end of July, it held about $65 million in Ethereum and stablecoins, coming from .eth domain registrations. The foundation will also receive the right to manage protocol revenues. The DAO, in turn, will allocate 1 million ENS to pay the salaries of the new structure's employees. At the same time, nearly 55% of the supply (about 54.6 million ENS) will remain in the hands of holders, who will retain the right to appoint and remove foundation directors.
The first board has already been formed. It includes executive director Alexander Urbelis, ENS founder Nick Johnson, as well as independent directors Kartik Talwar, Brett Sun, and Anthony Leutenegger. A key technical aspect — 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 queue transactions, while the Security Council has the right to cancel any of them. Its authority to block transfers expires on August 7, 2028.
Context and criticism
The reform did not go smoothly. The governance conflict flared up as early as June 19, when ENS Labs Chief Operating Officer Katherine Wu published the first version of the proposal. Some delegates strongly opposed it. Project co-founder Alex Van de Sande stated that after the initiative's implementation, the DAO would effectively lose control over the wallet, and spending limits and conflict-of-interest policies exist only in text, not in code.
Analysts from Curia added that the ability to remove directors relies on Cayman Islands legislation and takes months, while a transaction passes in minutes. Developers from Blockful 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.
Wu responded to the criticism, stating that the document was revised following the first discussion, DAO tokens remained with holders, the operational wallet was not moved, and treasury transactions received a timelock and an independent cancellation mechanism.
My comment: This is a classic example of a compromise between decentralization and operational efficiency. Transferring control to the foundation is a pragmatic step, but it creates a precedent where the DAO's formal power becomes nominal. The market will be closely watching how the new structure manages the $65 million — this will become a litmus test for the entire industry.