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: The initial article claimed that ConstitutionDAO had won the auction based on early reports. The DAO later issued a statement on Discord that it had lost the auction. This article has been updated.
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 would have had the power to move the funds into Sotheby’s hands. Instead, the DAO must now begin the process of refunding contributors, minus transfer fees incurred.
According to ConstitutionDAO’s website, all contributors who donated to the DAO’s mission, regardless of status, would receive a governance token in exchange for their donation. The governance tokens were meant to 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 could then use the exchange to convert their Ethereum into fiat and pay Sotheby’s via wire transfer.
In the wake of today’s failure, ConstitutionDAO’s ability to quickly and nimbly build out a massive community and garner national interest proved its most impressive achievement.
