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

Confusion Sets in After ConstitutionDAO 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: Contributors to ConstitutionDAO had initially claimed that the group had won the auction. The DAO later issued a statement on Discord that it had lost the auction.

    In just one week, a newly-formed decentralized autonomous organization known as ConstitutionDAO raised over $45 million but did not succeed in a historic effort to purchase a privately-owned copy of the U.S. Constitution.

    Sotheby’s auctioneer Quig Bruning started the Constitution copy’s bidding at $10 million. The bidding quickly jumped to $30 million and slowly escalated to a final bid of $41 million. Unfortunately, the DAO did not place the final bid and another bidder won the copy of the Constitution.

    Crypto watchers, viewing the auction via YouTube, were confused about who was bidding on behalf of the DAO. Initial reports indicated success, but the ConstitutionDAO issued a statement shortly after stating that it "did not win the bid."

    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.— ConstitutionDAO (📜, 📜) (@ConstitutionDAO) November 19, 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.