ENS DAO approved the "KNext Era of ENS DAO" proposal with approximately 70% support

ENS token holders have approved and implemented the "New Era of ENS DAO: Empowering the ENS Foundation" proposal on-chain with approximately 70% support.

8/12/20264 min read

The problem this proposal aims to solve.

ENS has published an official article accompanying the on-chain implementation process, explaining the core operational limitations that the new structure will overcome. In nearly a decade of operation, ENS has evolved into the core naming infrastructure of the Internet, trusted by millions of domains and integrated across numerous wallets, applications, and Layer-2 networks; the project has also collaborated with organizations such as ICANN (Internet Assigned Numbers and Names Authority), IETF (Internet Technical Task Force), and W3C (World Wide Web Consortium) to develop naming infrastructure standards. The article states that "the DAO structure itself has limitations in performing off-chain tasks such as contract signing, personnel recruitment, trademark protection, and participation in regulatory discussions."

A DAO operating through an on-chain governance voting mechanism cannot effectively perform tasks such as: signing commercial contracts, acting as a nominee in legal proceedings, hiring employees with legally binding employment contracts, protecting trademarks through domestic and international intellectual property registration, or participating in standards organizations and legal discussions, all of which require a specifically designated legal representative. Each of these functions requires an authorized legal entity—precisely the role that the ENS Foundation currently fulfills through its transformed structure. Protocol governance functions that do not require off-chain legal representation remain under the authority of token holders, as these functions can be effectively performed through the on-chain voting mechanism.

The rights that token holders retain.

The structural design of this proposal proactively separates operational governance from protocol governance; this conceptual separation, proposed by Katherine Wu (alias katherine.eth) and Chief Operating Officer (COO) of ENS Labs, was considered the most significant difference in the discussion before the vote.

The Foundation will assume administrative control over the $65 million Endowment (funded from .eth domain name registration fees), manage the protocol's revenue streams, be responsible for off-chain policies and brand protection, manage ENS's trademarks and intellectual property, officially represent ICANN, IETF, and W3C, conduct discussions with regulators and policymakers, manage recruitment and labor relations that the DAO cannot directly maintain, and take over the functions of the Service Provider Program (SPP) after the current SPP3 cycle ends.

Token holders retain absolute control over the items designed under the ENS charter, which are considered protocol rather than administrative matters: all smart contract upgrades, decisions on ENS pricing and fee structure, control of the root key and registration system, charter amendments, the DAO's operating wallet and its approximately $16 million balance (including ETH and stablecoins), the DAO's holdings of approximately 54.6 million ENS tokens, and the right to appoint or dismiss the Fund's directors. The only ENS token transaction in the entire proposal is a one-time transfer of 1 million ENS tokens specifically for employee compensation under the approved structure; the tokens held by the DAO are not transferred or delegated to the Fund's control.

Opposition from delegates shaped this proposal.

The approved proposal is a scaled-down version of the original consultation proposal (in June 2026); the original proposal intended to transfer the DAO's operating wallet to a new Foundation organization. After weeks of opposition from delegates who criticized the original version as a takeover of funds, concentrating control of the DAO's estimated $350 million in assets in the hands of a five-person board, a significant amendment was introduced that removed the transfer of the operating wallet and retained control of it for the token holders.

The political significance of this revision is considerable: the final proposal addressed the delegates' core concerns by keeping the DAO's token assets and operating wallets in the hands of the community, while still allowing the Foundation to perform its off-chain operational tasks through the Endowment Fund and the 1 million ENS remuneration transfer. The approximately 70% approval rating for the final proposal indicates broader acceptance of the revised version compared to the reactions the original proposal might have faced.

The previous version also faced criticism from some community members; they questioned whether the large proportion of tokens held by Nick Johnson, given the generally low ENS governance participation rate, could easily help him secure the necessary quorum and pass the proposal without broad community consensus. Debates erupted on the ENS governance forum, viewing the initial proposal as an "attempt to centralize control"; ENS Labs refuted this accusation through both public announcements and substantive revisions to the final text submitted for voting.

Assessment and Conclusion

The debate surrounding ENS reflects a governance issue that has become one of the most discussed design challenges in Web3 project management: whether DAOs should directly manage day-to-day operations or be limited to protocol-level control and delegate execution to accountable organizations. EtherWorld notes that this debate extends far beyond the scope of ENS, reflecting existing tensions in how the Ethereum Foundation restructured to a "Lean Ethereum" model, how Uniswap DAO handled the conflict between the Uniswap Foundation and token governance, and how MakerDAO restructured to a SubDAO model.

ENS's solution of separating protocol governance for token holders and operational governance for the Foundation is one of the clearest examples of a separation of powers model in the industry's recent governance history. Whether this model is sustainable depends on whether the Foundation's board maintains true independence from ENS Labs in practice, whether the token-holding community is sufficiently active to effectively enforce its remaining powers, and whether the off-chain legal entity and the on-chain governance structure develop a complementary rather than conflicting relationship over time. The entire governance record, including enforceable proposals, on-chain voting results, and executed transactions, is publicly available on the ENS governance forum and in the on-chain data, allowing any stakeholder to compare the approved terms with the published summaries.

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