Nick Johnson, the founder and lead developer of ENS, wielded roughly half of the protocol's active voting power on June 30 to block an on-chain proposal renewing the ENS DAO Security Council, escalating a governance crisis that has exposed the gap between the DAO's $350 million treasury and its $166 million token market cap.
Nick Johnson, the founder and lead developer of ENS, wielded roughly half of the protocol's active voting power on June 30 to block an on-chain proposal renewing the ENS DAO Security Council, escalating a governance crisis that has exposed the gap between the DAO's $350 million treasury and its $166 million token market cap.
Johnson did not participate in the earlier off-chain Snapshot vote but cast his tokens against renewal in the on-chain ballot that ended June 30, according to the ENS governance forum. Lefteris Karapetsas, a longtime Ethereum community member, said the outcome was expected and called the DAO "dead," arguing that Johnson's voting power shields a treasury worth about $500 million from outside oversight.
The Security Council holds a unique power in ENS governance: it can cancel proposals that have passed a community vote and entered the timelock queue. The council's mandate was designed to block "malicious, coercive, or exploitative governance attacks," though the definition of such attacks has become increasingly contested, according to forum discussions.
The treasury math that drives the conflict
The financial stakes are unusually stark. DeFiLlama data shows the ENS DAO treasury holds about $350 million in assets, or roughly $88 million excluding the ENS token itself. CoinMarketCap pegs the ENS token's circulating market cap at about $166 million, with the token trading at $4.07 — a more than 95% decline from its November 2021 peak of $85.69.
That gap — treasury assets exceeding the token's market cap — creates the incentive structure the Security Council was meant to address. A well-funded attacker could theoretically buy enough tokens on the open market to control governance votes and extract value from the treasury, a scenario known in DAO circles as an "RFV raid."
AvsA, an active ENS community member, framed the risk bluntly on the governance forum. "The DAO is a $130M treasury safeguarded by at best $20M worth of tokens," they wrote, warning that if governance attacks are defined by "the legitimacy of the votes" rather than a proposal's effect, a wealthy buyer could legally take over the protocol for profit.
A new council proposal emerges hours later
Hours after the Security Council renewal failed, katherine.eth published a draft proposal for a new council on the ENS governance forum. The plan would replace the current eight-member council and require a five-of-eight supermajority to cancel any timelocked proposal, up from the current four-of-eight threshold, according to the forum post.
The ENS DAO account on X confirmed the submission, stating that the new council would follow a public mandate. Nominations are open until July 3, and the proposal includes a mechanism to remove members who violate the rules.
This is the second major governance clash at ENS in less than two weeks. On June 19, ENS COO Katherine Wu published a proposal to delegate day-to-day treasury management and operational responsibilities to a restructured ENS Foundation — a plan that would shift control of roughly $400 million in assets from tokenholder votes to a legal entity. Brantly Millegan, who authored the original ENS constitution, emerged as one of the loudest critics, arguing the plan would concentrate power away from tokenholders. Johnson supported that earlier proposal and planned to self-delegate his tokens in its favor.
The dual crises — the blocked Security Council renewal and the Foundation restructuring debate — have laid bare a fundamental tension at ENS: a protocol whose treasury is worth more than double its market cap, governed by a voting system where a single founder can veto structural safeguards. With nominations for the new council closing July 3 and the Foundation proposal still unresolved, the community faces back-to-back decisions that will determine whether ENS remains tokenholder-governed or shifts toward a more centralized model.
This article is for informational purposes only and does not constitute investment advice.
