Confusion Sets in After DAO Fails to Win Sotheby's Auction

Confusion Sets in After DAO Fails to Win Sotheby's Auction

In brief

  • ConstitutionDAO is a week old.
  • It formed to purchase a rare version of the U.S. Constitution at auction.
  • Correction: Despite early claims from contributors that it had won the auction, the DAO later clarified that it had lost the auction.

    In just one week, a newly-formed decentralized autonomous organization known as ConstitutionDAO raised over $45 million but lost a bidding war to purchase a privately-owned copy of the US Constitution, which sold for $41 million plus auction fees.

    A group of crypto users decided to form a DAO because they believe in the future of decentralized finance and wanted a copy of the US Constitution to be owned “by the people, for the people.” For the founding members of ConstitutionDAO, the flat hierarchical structure a DAO provides—where tokens are used to make decisions—facilitates this utopian vision.

    The ConstitutionDAO Discord server gained nearly 20,000 members in just seven days, and the DAO’s contributors total well over 15,000. Of these, 34 are considered “core contributors” and 13 are listed on the DAO’s website as the multisig entities. This means that those 13 individuals hold keys to the raised funds and have the power to move the funds into Sotheby’s hands.

    🚨 We are officially bidding in the Sotheby's auction!!!We are now transferring funds from the multisig to provide proof of funds for our participation and are coordinating with @ftx_us to provide this proof.WAGBTC!!!!! Let's GOOOOOOOOOO— ConstitutionDAO (📜, 📜) (@ConstitutionDAO) November 18, 2021

    According to ConstitutionDAO’s website, all contributors who have donated to the DAO’s mission, regardless of status, will receive a governance token in exchange for their donation. The governance tokens will be used as voting chips, allowing all of ConstitutionDAO’s contributors to vote on future potential matters such as where the document should be housed and preserved.

    To meet Sotheby’s KYC (know-your-customer) requirements, the DAO’s 13 multisig members set up an account in partnership with crypto exchange FTX US. Since all of the DAO’s funds are in Ethereum, they will use the exchange to convert their Ethereum into fiat and pay Sotheby’s via wire transfer.

    ConstitutionDAO’s ability to quickly and nimbly build out a massive community and garner national interest is arguably its most impressive achievement. Admittedly, there were some notable whale donors: Metaversal contributed $1 million and an anonymous donor contributed $4 million. But the main reason the DAO was successful is because of its sizable grassroots community and shared belief in the importance of keeping the US Constitution a public good.

    Source

    Subscribe to get our top stories