DAOrayaki Reserach|ConstitutionDAO: We the People, For the People

DAOrayaki DAO Research Grant：

10 min readNov 29, 2021

DAOrayaki DAO Research Grant Fund Address: DAOrayaki.eth

Voting Result：DAO Committee Yes

Grant Amount：130USDC

Category: ConstitutionDAO, U.S. Constitution, Sotheby’s Auction, Chris Dixon, $WTP Token, DAOs as auction bids, Tanay Jaipuria, Austin Cain, Graham Novak, JuiceBox,

Contributor：Jones@Daorayaki

Chinese Version:https://daorayaki.org/constitutiondao/

Brief Overview About ConstitutionDAO

For the first time in thirty-three years, one of thirteen surviving copies of the Official Edition from the Constitutional Official Edition from the Constitutional Convention were publicly auctioned by Sotheby’s. It is one of the two copies that are still owned by private collectors. The proceeds from the auction will be given to a charity that has been established by the current owner. Moreover, ConstitutionDAO is a spontaneous experiment by thousands of members of the cryptocurrency community. They pooled their money to make a bid on a rare original printing of the US Constitution. Sothbey’s estimates the document will sell for $15 million to $20million. The auction house recently made inroads into the NFT and Metaverse space.

Background

ConstitutionDAO group was formed by several friends on social media platforms when word started spreading about the auction. In a short while, the frenzy caught on. Memes and jokes began to circulate and in 24 hours, $4.5 million worth of Ether was raised for the purchase. With the auction taking place on Thursday 18, Nov, 2021, ConstitutionDAO was able to raise $27 million. This is well above the upper limits for the auction price, giving the participants confidence of a possible win at the auction. A total of 7,600 Ethereum addresses were involved in raising the required capital

The group has received backing from institutions, including exchanges and private investors. This shows a wide range of backing it has received.

Austin Cain and Graham Novak, two 25-year-old Atlanta residents working in finance, first started a Discord chat to launch the effort, which now has more than 8,000 members. Within a week of launching, the DAO raised over $40 million worth of ETH on JuiceBox, an early stage DAO platform. The effort, largely spun up through Twitter and a ballooning Discord server, is a window into what a community effort could look and feel like in a web3 universe, where shared ownership and transparency are guiding principles. The opportunities presented by the DAO structure are sparking widespread interest– the valued governed by DAO treasuries is now at oever $6 billion, per some estimates.

Chris Dixon, an American Internet entrepreneur, and investor, also announced his participation on Twitter.

Disproving The Critics

In its short existence, ConstituionDAO has been a hastily put-together organization. It is, however, taking concrete steps to become legitimized and become a well-run body.

Firstly, ConstitutionDAO has revealed the real-world identities of some of its members. It has also commissioned a limited liability company to place its bid at the Sotheby’s auction. This enabled it to comply with the know-your-customer (KYC) requirements put in place. Furthermore, fractionalization may result in a highly easy-to-persue securities enforcement action from the US Securities and Exchange Commission (SEC). Secondly, plans are in place to develop a governance token for the DAO. The $PEOPLE token would allow hoodlers to vote on issues regarding the document’s preservation and display. It is distributed at 1,000,000 PEOPLE for every ETH donated but is not yet being traded.

If historical data proves valid, the decentralized democratic process that ConstitutionDAO intends to employ could be flawed. Infighting, taking sides, and tension over the direction of the protocol could lead to unresolved disagreements. This was seen in the case of the Bitcoin community a few years ago, leading to the Bitcoin Cash hard fork.

Ramifications of ConstitutionDAO

Recent headlines have created a narrative around constitution DAO being an extension of the crypto community. However, there is arguably a much more historically significant moment in the making here if the DAO wins the auction. Aside from holding the record for the largest DAO, it will also be the first real-world proof-of-concept for decentralized organizations.

A successful bid will open up the potential of DAOs’ use cases. On the one hand, it shows the possibility of harnessing digital assets to create change. It also indicates opportunities existing in web 3.0, currently touted as the next iteration of the internet. In addition to this, individuals worldwide could be encouraged to change things they are passionate about by forming communities around issues they care about. This development could present new ways to the wider public of how to interact with digital assets through DAOs. This has been the case with ConstitutionDAO and was highlighted in a tweet by an angel investor, and product manager, Tanay Jaipuria.

However, ConstitutionDAO the decentralized autonomous organization even after pooling over $46M to put “The Constitution in the hands of The people by buying a rare first printing of the U.S Constitution during a Sotheby’s auction, the DAO still lost the auction even though the community raised a higher sum than winning bid. The project became a group of 17,437 contributors that, in just a few days, raised more than double the price Sotheby’s had estimated. The sale, however, ended at $41M in the hands of another bidder.

Around 20% of contributors reportedly made a crypto transaction for the first time, just to join in. There were no expectations of profit, only big ideas, humor, transparency, and a record-breaking experience. ConstitutionDAO intended to use the self-governance that web3 offers to allow contributors to make decisions around destination and preservation.

The DAO claimed on Twitter that they broke records for the largest crowdfund for a physical object, most money crowdfunded in 72h, became the first DAO Sotheby’s has ever worked with, raised interest in crypto inside diverse groups of people, and spread education.

How Did Constitution DAO Lose the Bid?

Although ConstitutionDAO raised more than $41M, Sotheby’s standard seller’s commission is “10% of the hammer price”, plus taxes, plus ETH gas fees, we can begin to see what they struggled with. Furthermore a significant part of the reason was the responsibility the group assumed towards the conservation of the document. The group members carefully investigated the path to follow for its preservation given they won the auction and ended up calculating a sum needed for its “proper care and maintenance.”

But why would someone buy something they cannot have?

The main idea of the DAO was that “historic artifacts are meant to be shared and enjoyed”, not owned by private parties, but some users did not understand their vision and called it “spending money to have nothing”. The average donation that was given to the project was $206,26. One could write a long list of material items that one could buy for that price, sure, but how often do you get to test the limits of what a group of people can achieve in just a few days by following a shared vision?

Of course, people like the idea, in a very American way, of buying the U.S. constitution off a private entity as a manifestation of their freedom, And, of course, we all know that this would not have meant actually buying the constitution itself — that would have probably resulted in an opposite and dystopic concept. But this project goes beyond that. It is about the goals many merely dream to achieve. It is about self-governance, empowerment, democracy, an open-ended response to the question: what can we do?

And we can dive in deeper: How free do Americans actually feel? Can the American dream be found inside of ICE concentration camps? Student loans, inflation, homelessness, hate crimes, little chance of affording a home, poor health care. And then comes freedom or the promises of the land of the free. We could also debate that freedom comes within and that any given man could surprise himself one day acknowledging it while turning around a corner or even in the confinement of a prison.

Is the nature of the decentralized autonomy of crypto communities a call to recognize one’s voice of freedom? Is it the human urge to share something, to build alongside others? Is it an experiment to see whether we can reproduce our own model of democracy? We shall spend the following years seeing how this or other groups in the crypto lead us to some answers and many more questions.

The Smithsonian briefly explains on their educational website that “it is because of the contest and conflict they embody, and the way they combine use and meaning, that historical artifacts are such valuable tools for exploring the past.” Regardless of the auction’s result, we probably can no longer separate the rare document from this historical moment. Somehow, 17,437 people engraved their willingness into the U.S.Constitution’s path.

Core Contributors

According to the official website of ConsitutionDAO below we have the list of the core contributors:

Community Moderators

Multsig

Concerning the Constitution

The document (U.S. Constitution) sold Thursday night Nov. 18, 2021 was printed in Philadelphia on Sept. 17, 1787– the last day of the Constitutional Convention that was presided over by George Washington and was attended by delegates such as James Madison and Alexander Hamilton.

Only 500 copies of the Constitution were created in that first printing; the one sold Thursday night is one of just 13 surviving copies. Only two copies are known to exist outside of institutional collections. ConstitutionDAO had planned to find “an esteemed partner to publicly display the Constitution,” preferably in a setting that would be free to the public and able to take on the expense and logistical hurdles of hosting the historical document. In the end, the organizers said they’re happy to see the enthusiasm that quickly gathered around the project. They also noted that it has helped to educate more people about cryptocurrency, as well as offering insights into the world of historical curation and art auctions.

The DAO in the bidding group’s name refers to a decentralized autonomous organization that, like cryptocurrency, operates by using blockchain technology. Earlier this year, a DAO successfully purchased the only copy of the Wu-Tang Clan’s album “Once Upon a Time in Shaolin, for $4 million”.

What’s coming next?

“We’ll soon be proposing a plan that outlines governance, vision and values, for the community to review and comment on,” the group said in a five-part Twitter thread.

First, investors who want to opt out can get their “ETH back at the original rate,” the group said. For easier tracking of claimed and unclaimed funds, the group added it will make a website in the coming week in block 13656500. The DAO did remind investors on its existing website of gas fees, which are required in every transaction. Some, especially those new to the digital asset ecosystem, may have failed to realize this at the get-go.

Second, investors who want to invest in another project can sign a message– without paying for gas– committing their funds to the DAO’s treasury and getting the group’s token called WTP, the group said. WTP stands for We The People, which gives holders the ability to vote for what direction future efforts of the DAO will take. There is no expectation of profit when donating to ConsititutionDAO.

CosititutionDAO its website admitted it was disappointed it’s ethereum-based project did not succeed in achieving its goal but decided to end the Twitter thread on an optimistic note.

“We onboarded thousands into crypto and educated millions about DAOs. We showed the entire world the amazing things crypto can enable and built an incredible community. YOU ALL MADE THIS HAPPEN.”