DAO Fails Attempt to Buy Constitution
Instead Teaches Lesson About Crypto
We have all become somewhat familiar with cryptocurrency the last few years, and yet the news surrounding the subject is consistently surprising. An organization called ConstitutionDAO lost a bid on a rare copy of the United States Constitution that was for auction at Sotheby’s in November 2021. The group has since claimed they will be disbanding as they have completed what they set out to accomplish, more or less.
A DAO is a decentralized autonomous organization, which means the group is owned and controlled by its members. The members have equal power and vote to make changes to what they call a smart contract. Some have said that ConstitutionDAO is not truly decentralized or autonomous because the decision to end the organization came from a few governing individuals and not a vote by the members of the community.
Made up of history buffs and fans of the National Treasure films, ConstitutionDAO set out initially to acquire one of the 13 surviving copies of the US Constitution. The majority of the remaining copies belong to institutions so the opportunity to acquire the document was pretty rare.
Donors from all over gave in Ethereum in hopes of winning the bid and then displaying the precious artifact in public for all donors, and interested parties, to take in. In the end, the organization lost to billionaire hedge fund CEO Ken Griffin. The winning bid was $43 million.
After losing at the auction, ConstitutionDAO was in possession of around $49.8 million it had no way to spend. Organizers bounced around ideas for other historical artifacts they could bid on, but ultimately decided that the group should end.
Graham Novak, a ConstitutionDAO organizer, stated in the group’s Discord: “The community has taken all actions that it was organized to accomplish.”
The issue now is how to refund the millions of dollars that were donated. Unfortunately, sending funds over Ethereum comes with high transaction costs. So contributors are struggling to get their money back without losing even more. For example, to get back around $170 worth of Ether from the project, you would have to pay around $50 in fees.
As of November 24, 2021, nearly $27 million has been sent back to contributors. The process is ongoing, although donors who gave in small amounts may end up paying more in fees to get their money refunded.
In spite of the challenges they face now, ConstitutionDAO considers the experience a success. The group wrote on Twitter:
“While this wasn’t the outcome we hoped for, we still made history tonight. This is the largest crowdfund for a physical object that we are aware of — crypto or fiat. We are so incredibly grateful to have done this together with you all and are still in shock that we even got this far.”
They also mentioned that this project has helped educate the public on cryptocurrency and many of those who contributed created crypto wallets for the first time to donate. So in their eyes, the enthusiasm surrounding the auction was not in vain.