NEW YORK — A slapdash alliance of crypto fans just bought the U.S. Constitution.
The group known as ConstitutionDAO placed the winning $41 million bid at Sotheby’s auction house Thursday for a first printing of the Constitution, one of only 13 left in existence. The final price will be higher, a Sotheby’s representative told CoinDesk.
Sotheby’s refused to reveal the name of the buyer, however in a Twitter Spaces the project’s core developers confirmed their success.
The DAO, or decentralized autonomous organization, or perhaps most accurately, an 18,800-person Discord channel, had crowdfunded more than that sum in under a week from over 17,000 Ethereum wallets.
“It’s mobilization,” said Jeff Graber, a Brooklyn-based member of ConstitutionDAO who made the trek up to Sotheby’s to get close to the action. He had put around $100 into the pot.
The Constitution bidding capped an historic night for crypto at Sotheby’s. Earlier, two works by street artist Banksy captured millions of dollars in ETH in the auction house’s first crypto sales.
Read more: ConstitutionDAO Raises $27M on Eve of Sotheby’s Auction. $PEOPLE Could Be the Reason
ConstitutionDAO’s victory is a rare instance of a crypto community flexing its real-world buying power. So-called DAOs have banded together before to score auction-block wins. But their trophies usually take the form of crypto, like non-fungible tokens (NFTs), whose ownership can be governed by smart contracts. A Beeple collection commanded a stunning $69 million at a Christie’s auction in March, supercharging the mainstreaming of NFTs in the U.S. and beyond.
ConstitutionDAO’s win may be a similar signal for online investment collectives.
“I think this is a clear harbinger of the beginning for DAOs,” FTX.US President Brett Harrison told CoinDesk. “Up to now there has been many DAOs that have popped up around NFT communities around different kinds of DeFi projects,” but never for real-world assets.
Harrison’s crypto exchange helped ConstitutionDAO convert the crypto to cash held in an account managed by Endaoment, a non-profit that represented the group at auction.
Unlike the auction house’s Bored Ape Yacht Club sale in September, Sotheby’s will not be accepting cryptocurrency as a form of payment for the winning bid. Crypto exchange FTX has converted the DAOs ETH into cash for the payment, a deal finalized hours before the winning bid was placed.
IRL issues
Crossing over to meatspace, however, comes with its own host of problems. For starters, how to manage a centuries-old historical document that requires security and care. Sotheby’s will only hold the Constitution for 30 days before its new owners must pick it up.
Once they do, the next question arises: What to do with it?
A common misconception surrounding the project has to do with the Constitution’s ownership. Members of the DAO funding the acquisition aren’t actually purchasing a fractional share of the Constitution itself, but rather the voting rights for its use.
While it’s been stated that the DAO intends to publicly display the rare artifact, its ultimate location will be determined by the votes of the 17,000 wallets that donated a total of over $47 million in ETH.
According to the DAO’s FAQ, the document will be legally owned by a newly-formed LLC itself owned by two DAO members, and the group is planning to “change the ownership structure” based on community input in the near future.
The sale could prove to be a watershed moment for DAOs, an umbrella term for a crypto-native governance movement that delegates power to the masses and pools resources – talent, expertise, funding – from its members.
Read more: ‘I Think We’re Doing This’: Inside One DAO’s $20M Plot to Purchase the US Constitution
ConstitutionDAO is still trying to figure out its form. As the sale neared Thursday, members continued to spar over everything from federal securities law to the management chain in Delaware C-corps – a prime example of how ill-prepared the old world is for this new one.
DAOmentum
If anything, it’s fueled a mass of mainstream interest in DAOs in the press. By Thursday the New York Times, Wall Street Journal, BBC and other widely recognized brands found themselves explaining the nuances of DAOism. Searches for DAO hit an all-time peak on Google Analytics as the sale neared.
“I think seeing how powerful a DAO can become in a real-world transactions such as this, I think will show people that there’s a lot of potential that people have only dreamed of for these kinds of organizations to be a model for future governance,” said FTX’s Harrison.
Representatives of ConstitutionDAO previously signaled a willingness to donate the Constitution to a museum. But the ultimate decision is expected to come down to community vote. Donors to the DAO expect to receive a share of PEOPLE tokens, which will be used to vote on the document’s future going forward.
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