ENS Labs Chief Operating Officer Katherine Wu published a revised executable draft on Thursday that would establish an ENS Foundation while removing the proposal's most contentious provision: transferring the DAO's operational wallet to the new entity.

The revision follows weeks of opposition from delegates to an earlier version introduced by Wu on June 19. That proposal would have transferred both the operational wallet and ENS token holdings to the Foundation. The ENS DAO treasury is currently valued between $350 million and $400 million.

Revised Governance Structure

The original proposal outlined a governance framework modeled on established nonprofit organizations such as the Mozilla Foundation and the Linux Foundation. The plan aimed to professionalize operations, establish a structured approach to grants and long-term capital planning, and provide ENS with greater institutional credibility.

The push reflects a broader trend among major DAOs — including Uniswap and Arbitrum — that have created foundation-style entities to handle legal incorporation, partnerships, and operational tasks that token-based governance alone struggles to manage.

Community members raised concerns about the potential for treasury capture by ENS Labs insiders. Co-founder Nick Johnson's self-delegation practices intensified the debate, prompting questions about the degree of control a small group could consolidate under a Foundation structure.

The revised draft addresses these concerns by retaining operational wallet control at the DAO level. The Foundation would still be established to manage grants and oversee long-term capital planning. However, ENS tokenholders would retain governance authority over protocol-level decisions, including smart contract upgrades and constitutional amendments.

Treasury Composition

The ENS DAO treasury, valued between $350 million and $400 million, comprises substantial ENS token holdings alongside an endowment managed by Karpatkey, a crypto-native treasury management firm.

ENS Labs generates revenue through .eth domain registrations and received an early grant from the Ethereum Foundation. The project has not conducted a venture-backed token sale, meaning the treasury was funded through protocol usage rather than through token sales to investors expecting returns.

The Karpatkey-managed endowment demonstrated that professional treasury management was already operating at the DAO level, which weakened the argument that a Foundation was necessary to introduce financial sophistication to the operation.

Remaining Governance Matters

The revised proposal would still create a legal entity capable of interfacing with traditional institutions, administering grant programs, and handling operational functions that DAOs have historically found challenging.

Several governance matters remain unresolved alongside the Foundation proposal. Security Council renewal and the delegation of dormant community treasury tokens are both under discussion. Large pools of undelegated tokens can affect governance outcomes, and ENS's approach to these issues could establish precedent for other protocols.