When your community tells you to pump the brakes, sometimes you actually listen. ENS Labs COO Katherine Wu published a revised executable draft Thursday that establishes an ENS Foundation but conspicuously drops the most contentious element of the original plan: transferring the DAO’s operational wallet to the new entity.

The move comes after weeks of delegate opposition to an earlier version Wu introduced on June 19, which would have shifted both the operational wallet and ENS token holdings to the Foundation. For a DAO sitting on a treasury valued between $350 million and $400 million, that’s not exactly a minor administrative reshuffling.

What changed and why it matters

The original proposal envisioned a governance structure modeled after established nonprofits like the Mozilla Foundation and the Linux Foundation. The pitch was straightforward: professionalize operations, create a more structured approach to grants and long-term capital planning, and give ENS something resembling institutional credibility.

Community members flagged the risk of treasury capture by ENS Labs insiders. Co-founder Nick Johnson’s self-delegation practices added fuel to the debate, raising questions about how much control a small group of individuals might accumulate under a Foundation structure.

The revised draft addresses these concerns by keeping operational wallet control at the DAO level. The Foundation still gets to exist, managing grants and handling long-term capital planning. But ENS tokenholders retain governance authority over protocol-level decisions, including smart contract upgrades and constitutional changes.

The treasury in context

The ENS DAO’s treasury is not trivial. Valued between $350 million and $400 million, it includes substantial ENS token holdings alongside an endowment managed by Karpatkey, a crypto-native treasury management firm.

ENS Labs generates revenue from .eth domain registrations and received an early grant from the Ethereum Foundation. There’s been no venture-backed token sale. That distinction matters because it means the treasury wasn’t bootstrapped by selling tokens to investors expecting returns; it was built through actual protocol usage.

The Karpatkey-managed endowment adds another layer. Professional treasury management is already happening at the DAO level, which weakened the argument that a Foundation was needed to bring financial sophistication to the operation. Delegates could reasonably ask: if treasury management is already professionalized, what exactly does moving the wallet accomplish?

What investors should watch

The revised version still creates a legal entity that can interface with the traditional world, manage grant programs, and handle the kinds of operational tasks that DAOs historically struggle with.

Several governance discussions remain open alongside the Foundation question. Security Council renewal and the delegation of dormant community treasury tokens are both on the table. Large pools of undelegated tokens can skew governance outcomes, and how ENS handles this could set precedent for other protocols.