# Fixing The Flywheel: Lending Alongside Spending

![](https://i.imgur.com/g0DrHvQ.png)

## TLDR

Nouns DAO is invited to lend 420,000 [USDS](https://sky.money/) to [International Meme Fund (IMF)](https://imf.bz), a crypto-native credit union building Community Coordinated Credit on Ethereum. The funds earn \~20% APY in USDS from borrowers using [MOG](https://mogcoin.xyz) as collateral, secured by [Morpho's](https://morpho.org/) robust and battle-tested infrastructure. This is not a grant. It’s a trustless, reversible loan. Nouns earns yield, supports a culturally aligned protocol, and helps close the loop. Laying the foundation for Nouns to fund ideas. **And be funded by them.**

## Context

Nouns DAO has led the way in funding public goods, memetic culture, and internet-native identity. But with a shrinking treasury and limited value returning from funded proposals, it’s time to explore new [Nouns Break Even](https://www.nouns.camp/topics/0x39a7ea92f59d74a950e4a08990519ee44ef3abc0-nouns-break-even-movement) aligned approaches. Not to replace grants, but to complement them. 

![](https://i.imgur.com/iOzclsY.jpeg)

This proposal acknowledges a critical gap in the original [Nouns Virtuous Cycle](https://medium.com/@punk4156/the-nouns-virtuous-cycle-95586bb9c7c9) described by [4156](https://www.nouns.camp/voters/4156.eth). Without mechanisms for accountability or value feedback, the current cycle breaks down. By introducing onchain credit, Nouns can upcycle its coordination engine. Proliferating not just memes, but momentum.

As an [early contributor](https://www.nouns.camp/voters/gami.eth) to Nouns and founder of [Gnars](https://gnars.com), I’ve watched this experiment grow from day one. This proposal offers a courageous but clear next step. IMF delivers new infrastructure for Nouns to back its mission with capital coordination.

[IMF Credit](https://docs.imf.bz) is a protocol that empowers anyone to unlock credit using any token as collateral. It’s built for coordination, not extraction. It’s secured by Morpho Blue, Ethereum’s most respected modular lending infrastructure. IMF Credit includes Pools, Loans, and Yield, enabling cultural communities to coordinate capital without selling their assets.

![](https://i.imgur.com/pWWYkaT.jpeg)

## What We’re Proposing

- Convert 420,000 USDC into USDS (a stablecoin issued by Sky, formerly Maker DAO)     
- Lend this 420,000 USDS to the MOG-USDS market in the IMF protocol     
- Earn approximately 20% APY, paid in USDS (adaptive curve [interest rate model](https://docs.morpho.org/overview/concepts/irm/))     
- Funds remain under DAO control and can be withdrawn via a follow-up proposal     
- Upon proposal execution, 2% of the total $IMF token supply will be transferred to the Nouns DAO treasury, representing a 2% ownership stake in the protocol 

There are no intermediaries. No multisigs. The DAO interacts directly with the protocol.

## Mechanics

Here’s what happens on execution:

- Nouns converts 420,000 USDC to [USDS](https://sky.money) 
- 420,000 USDS is deposited into the **MOG-USDS market** on [Morpho Blue](https://morpho.org)                       
- Market is **isolated.** Only affects MOG-USDS pair, and no other token or protocol     
- Borrowers post **MOG** as collateral and draw USDS up to **77% LLTV**   
- Secured by a dedicated oracle and comprehensive liquidations infrastructure     
- Nouns DAO earns **real interest** from these borrowers. No emissions, no gimmicks     
- Interest rates are **adaptive**, based on market demand ([IRM model](https://docs.morpho.org/overview/concepts/irm))     
- Yield is paid in USDS and accrues to the DAO owned position     
- DAO can withdraw its funds at any time via a follow-up proposal 
- **No multisig, no custodian, no offchain process** 

This is trustless, reversible, and secured by Ethereum’s best infrastructure.

![](https://i.imgur.com/SWFalvZ.jpeg)

## Why It Matters

### Earn Yield, Not Dilution

Nouns doesn’t need to spend ETH to support coordination. It can put its stablecoins to work, earning yield while supporting a culturally aligned protocol built to serve memecoin economies and internet-native communities.

### Credit as a Complement to Grants

This proposal doesn’t replace grants. It complements them. Builders who hold $NOUNS could borrow against it to fund ideas, repaying over time. This aligns incentives, creates measurable accountability, and adds a sustainable new layer to Nouns’ funding ecosystem.

![](https://i.imgur.com/FyqUlor.jpeg)

### Cultural Synergy with Mog and IMF

[Mog coin](https://mogcoin.xyz)’s aesthetic and community are deeply inspired by Nouns. The artist behind Mog’s rebrand, [Mike Three](https://twitter.com/enjoyoor), is a Nouns fan who credits Noggles as inspiration for the Moggles, the Pit Viper sunglasses now iconic in Mog culture. [Ripe](https://x.com/ripe0x), a prolific Nouns builder and smart contract artist, and [Batz](https://x.com/batzdu), a celebrated artist and [new Noun owner](https://x.com/batzdu/status/1882109879437103527), are also active in the Mog ecosystem.

Nouns and Mog are part of the same cultural movement. IMF Credit empowers Mog. This proposal links all three and proves what coordinated credit can unlock.

### Backing Ethereum-Native Coordination

IMF is one of four launch partners of [Salutary](https://salutary.io), a new onchain standard for tokens with credible economic structure. The $IMF token doesn’t pay dividends. Instead, protocol revenue is reinvested in growth. If someone wants to acquire the protocol, they must acquire 51% of the supply. This introduces a real, onchain acquisition mechanism. It brings the “threat of takeover” dynamic from equities into crypto.

### Built on Battle-Tested Infrastructure

IMF Credit is secured by Morpho Blue. It’s modular, immutable, and already supports billions in total value locked. When the DAO deposits USDS, it does so directly, securely, and without custodial risk.

![](https://i.imgur.com/k01Qrbk.png)

## Risks & Transparency

We take risk seriously. Here’s what Nouns DAO should know:

- **Market Risk**: If the value of MOG drops significantly, borrower positions may face **partial liquidation**. These events protect lenders but could reduce borrow demand or slow repayments.     
- **Oracle Risk**: Each market uses a dedicated oracle. If compromised, it could misprice collateral. Morpho mitigates this through isolated markets, robust oracle feeds, and comprehensive liquidations infrastructure.  
- **Liquidity Risk**: Withdrawals depend on available liquidity. In high utilisation scenarios, some USDS may be temporarily locked until borrowers repay or new deposits enter. 

Nouns DAO retains full control of the funds. No trust is required. All value flows onchain.

![](https://i.imgur.com/cj5VEpU.jpeg)

## Trustless. Immutable. Audited.

IMF Borrow and Lend are powered by [Morpho Blue](https://morpho.org/), the most secure and flexible lending infrastructure on Ethereum. Morpho currently secures over $4.2B in deposits and $1.7B in active loans, with all markets isolated, immutable, and free from governance risk.

Morpho’s contracts are [formally verified](https://docs.morpho.org/overview/resources/formal-verification/) and have undergone [25+ independent audits](https://docs.morpho.org/overview/resources/audits/), with an active [bug bounty on Immunefi](https://immunefi.com/bug-bounty/morpho/information/). There are no upgrade paths or privileged access. Just smart contracts that work as designed.

While not directly used in this proposal, the Pools component of IMF Credit is also undergoing multiple audits and has its own [bug bounty program through Hashlock](https://hashlock.com/bug-bounty/imf), further reinforcing IMF’s commitment to secure, onchain coordination.

By leveraging Morpho Blue, IMF Credit delivers high-yield lending with the assurance of battle-tested, transparent, and decentralized infrastructure.

## Detailed Transaction Breakdown

1. Approve 420,000 [USDC](https://etherscan.io/token/0xa0b86991c6218b36c1d19d4a2e9eb0ce3606eb48#writeProxyContract#F1) to Maker PSM  
2. Swap USDC to 420,000 DAI via [Maker PSM](https://etherscan.io/address/0xf6e72db5454dd049d0788e411b06cfaf16853042#writeContract#F11)   
3. Approve 420,000 [DAI](https://etherscan.io/token/0x6b175474e89094c44da98b954eedeac495271d0f#writeContract#F1) to Sky Converter  
4. Convert DAI to 420,000 USDS via [Sky Converter](https://etherscan.io/address/0x3225737a9bbb6473cb4a45b7244aca2befdb276a#writeContract#F1)   
5. Approve 420,000 [USDS](https://etherscan.io/address/0xdc035d45d973e3ec169d2276ddab16f1e407384f#writeProxyContract#F1) to Meta Morpho V1\_1  
6. Deposit 420,000 USDS to [Meta Morpho V1_1](https://etherscan.io/address/0xdef1fce2df6270fdf7e1214343bebbab8583d43d#writeContract#F6)   
7. Claim 660,000 [IMF](https://etherscan.io/token/0x05BE1d4c307C19450A6Fd7cE7307cE72a3829A60#writeContract#F6) to [Nouns](https://etherscan.io/address/0xb1a32FC9F9D8b2cf86C068Cae13108809547ef71) ([approved](https://etherscan.io/tx/0xa39e3fd1fdae41bb124f4f86080c87b4a9cb64896e81c7137a57d00e589175bf#eventlog)) 

## Long-Term Potential

This proposal is the beginning of something meaningful. In future, Nouns DAO can:

- Seed a NOUNS/USDS Pool in IMF Credit, to earn fees and unlock lending market  
- Enable builders to borrow against $NOUNS instead of relying solely on grants     
- Activate treasury-held NFTs and other assets as productive collateral 

These outcomes will emerge. The only question is whether Nouns leads the way.

## Conclusion

This is a moment to be bold. To experiment with conviction. To evolve what funding looks like in the Nouniverse. IMF has been building Community Coordinated Credit from the ground up since our inception at the ETHGlobal Sydney hackathon, May 2024.

[International Meme Fund](https://imf.bz) offers Nouns DAO a new tool. It’s a way to coordinate value without giving it away. This proposal requires no trust, no permanent treasury depletion, and opens doors for future innovation.

**Credit is a weapon. Let’s use it together.**

[gami.eth](https://warpcast.com/gami)

⌐◨-◨

Outcome: CANCELLED