ENS Labs COO and ENS Foundation board member Katherine Wu introduced a governance proposal to transfer operational management and treasury custody to an expanded ENS Foundation. The proposed restructuring claims to keep protocol-level control with token holders, including the authority to upgrade smart contracts and remove directors. Its most controversial clause seeks to transfer custody of approximately $400 million from the ENS DAO to a five-seat Foundation board.

The proposed board includes ENS founder Nick Johnson, executive director Alex Urbelis, and three independent directors who will receive 40,000 USDC per year. The transition has sparked an intense debate as Johnson recently self-delegated 3.1 million ENS tokens, which represents 3.1% of the total ENS supply, but nearly 50% of the active ENS voting power. Johnson's vote alone is enough to meet quorum on the proposal. The second-largest delegate, Jeff Lau, has just 190k ENS in voting power.

Rotki founder and ENS delegate Lefteris Karapetsas raised the alarm on X, stating "someone is trying to steal its treasury. It's my job to raise the alarm at this point." Johnson replied "Others have sold their tokens, or stopped participating. I haven't, because I believe in the future of ENS." Karapetsas criticized the move, framing it as a founder unilaterally deciding to kill the DAO and alienate external builders.

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