The Nouns Builder Protocol is an open-source smart contract system that allows anyone to launch a fully onchain DAO with programmable governance, automated token issuance, and treasury management. This section breaks down how the protocol works, its architecture, and how to interact with it.
How It Works
Token Auction Mechanisms
At the heart of every Builder DAO is a recurring token auction system. Instead of launching all governance tokens at once, new tokens are auctioned one at a time on a fixed schedule.
Key characteristics:
- Auction Interval: Each DAO configures how often a new token is auctioned (e.g., every 24 hours).
- Bidding Process: Participants bid using ETH, and the highest bidder wins the token. A new high bid within the last 5 minutes of the auction will extend the auction duration for another 5 minutes. This will continue until the auction goes 5 minutes without a new high bid and the auction closes.
- Token Minting: Settling an auction distributes the last token to the winner, mints the next token, and kicks off a new 24 hour auction.
This approach ensures fair distribution over time and creates a predictable funding stream for the DAO treasury.
Governance Parameters
Builder DAOs use onchain governance to make decisions. The protocol provides customizable governance settings when launching a DAO:
- Voting Delay: Time between when a proposal is submitted and when voting begins.
- Voting Period: Duration the community has to vote on a proposal.
- Quorum Threshold: Minimum number of votes needed for a proposal to be valid.
- Proposal Threshold: Minimum number of tokens required to create a proposal.
These parameters shape how responsive, secure, and participatory your DAO will be.
