ENS Foundation takes administrative control of $65 million Endowment following tokenholder vote

Ethereum Name Service (ENS) tokenholders have greenlit and executed a major governance proposal, transforming the ENS Foundation into a fully operational organization equipped with a full-time executive director, dedicated staff and a five-member board.

The "Next Era of ENS DAO" initiative, carried out onchain on Aug. 11, aims to give the decentralized naming protocol an institutional presence capable of engaging with bodies like ICANN and defending its trademarks, an announcement on Tuesday said. The vote passed with about 70% of token voting support.

"A DAO, on its own, does not have the legal and operational capacity to act in many of the venues where that infrastructure now needs representation," the foundation wrote in a blog following the vote.

Under the new setup, the Foundation will handle off-chain policy, brand protection and operational work, while ENS Labs will continue to focus on core protocol development, including the upcoming ENSv2 upgrade. The Foundation will also gain administrative control over an approximately $65 million ENS Endowment, which is funded from .eth names registration fee revenue, as well as "stewardship of the protocol's revenue," according to the proposal.

As part of the plan, the existing ENS DAO will also send a one-time transfer of 1 million ENS tokens to the new foundation to fund employee compensation. The DAO will retain control of its ENS tokens, making up about 54.6% of the total ENS supply.

Tokenholders will also be able to "appoint or remove Foundation directors." At launch, the inaugural board features Executive Director Alexander Urbelis, ENS founder Nick Johnson, and independent directors Kartik Talwar, Brett Sun and Anthony Leutenegger. 

"The Foundation spends only against published, Board-ratified budgets, and it will report publicly through annual audited financials and quarterly grant updates," according to the blog, noting "the Foundation handles the offchain work needed to support the protocol, while its Board oversees operations and ensures that ecosystem contributors, including ENS Labs, are funded sustainably."

There will also be a nine-day timelock on endowment transactions, which can be canceled by the Security Council. Independent directors will serve two-year terms that are up for renewal.

The move comes in the wake of a recent governance spat in the ENS world. In June, ENS Labs CEO Johnson self-delegated roughly 3.26 million ENS tokens — representing about half of the active voting power — to single-handedly block the onchain renewal of the existing Security Council. Johnson also backed a proposal to shift day-to-day treasury and operational control from the ENS DAO to an expanded ENS Foundation. 

Critics, including Security Council member Brantly Millegan and delegate Lefteris Karapetsas, called this a "governance attack" by ENS Labs, sparking intense community backlash. A new Security Council was later seated. 

"Together, ENS Labs, the DAO, and the Foundation play distinct but complementary roles, aligned around the long-term stewardship of ENS," the foundation continues.