The Ethereum Name Service DAO is wrestling with a governance proposal that would dissolve itself and transfer day-to-day operations and treasury control to the ENS Foundation, a centralized entity led by a full-time executive director.

The proposal, titled "Next Era of ENS DAO: Empowering the ENS Foundation," cites real operational problems: delegate fatigue, too many small decisions and too few big ones, lack of accountability from grant recipients, and coordination failures. The DAO's treasury sits at roughly $350 million in combined assets, or $88 million if you exclude ENS tokens. Critic Lefteris Karapetsas, a long-time Ethereum developer, called it "essentially dissolves itself and transfers control of the entire treasury... to the ENS foundation."

essentially dissolves itself and transfers control of the entire treasury... to the ENS foundation.

ENS lead developer Nick Johnson defended the move, saying the DAO has become "almost solely concerned with how best to spend the treasury" rather than governance. He argued ENS was always meant to be a governance-only token, with treasury funds reserved for "building ENS, and funding public goods." Karapetsas fired back, accusing Johnson of delegating roughly 50% of the voting supply to himself. Johnson countered that low delegate participation reflects how "difficult it's been to keep the DAO secure using token-weighted delegated voting."

The pair have sparred before. Six years ago, Johnson pushed for legitimacy over spending while Karapetsas hoped ENS wouldn't have a token at all. Proposal author Katherine Wu attempted to clarify positions in a lengthy post, but disabled replies, drawing more fire.

The governance spat reflects a broader risk: DAOs with large treasuries can attract what activists call "RFV raids," where investors buy voting stakes to force asset distribution. One observer suggested the centralization move may be preemptive defense against that threat. Gnosis DAO recently faced similar pressure and ultimately voted to accept a simplified treasury redemption proposal "developed jointly with the Gnosis founding team," though it rejected an earlier version.

Meanwhile, the Ethereum Foundation announced a 20% staff reduction, cutting 54 employees. Ethereum co-founder Vitalik Buterin linked the layoffs to a 40% decrease in the foundation's budget this year, framing the changes as Ethereum's "third iteration" focused on optimizing the multi-client model and reducing non-development activities. A new nonprofit research outfit, Ethlabs, announced its launch with former EF member Barnabé Monnot joining the organization.