Crypto investors did not buy the US Constitution from Sotheby’s Quartz

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On November 18, a group of cryptocurrency investors gathered to purchase one of the 13 rare copies of the U.S. Constitution for sale at the Sothebys auction house. A group of 17,000 donors, made up of a decentralized autonomous organization, or DAO, organized themselves entirely online to bid at auctions.

ConstitutionDAO was created by a core team of 35 people to put the Constitution in the hands of the people, as the group states on its website. He planned to publicly display the Constitution, one of 500 copies in a first printing, free of charge at an institution willing to cover the cost of housing the 1787 document.

Sotheby’s

The official edition of the Constitution of the United States and the first printing of the final text of the Constitution

It was the first time DAO had bid on Sothebys, an auction house where billionaires, sovereign wealth funds and museums often go to buy top-notch artwork. Each donor has contributed varying amounts and the group has raised over $ 40 million to acquire the artefact, demonstrating the financial potential of the collective online organization.

But ConstitutionDAO was outbid. An anonymous private collector spent $ 43.2 million on the document, more than double Sothebys’ original estimate. Organizers of ConstitutionDAOs said they would return the money, minus some crypto transaction fees, to its more than 17,000 donors. The group’s effort serves as a release party for DAOs, structures that many in the crypto community believe are a governance structure for the future of the internet.

What is a DAO?

DAOs, or decentralized autonomous organizations, represent a new approach to organizing large groups online. As their name suggests, DAO members often do not know each other and are organized into collectives, with no central management or hierarchy. Groups typically have public statutes and interactions are governed by blockchain technology, including financial transactions and member voting. (Quartz has a detailed explanation on this topic.)

DAOs vary, but most are organized according to principles called web3, a crypto-optimistic view of a decentralized web. It’s a model built on the promise of blockchains, which offer cryptographic encryption and validate transactions on many different computers rather than relying on tech giants like Google, Facebook, or Amazon. Supporters of Web3 believe that decentralization will improve online security, control of personal data and finances.

It’s the next evolution in online trends that sprang up during the pandemic. Over the past two years, the prices of cryptocurrencies like bitcoin and ether have skyrocketed and digital artists, calling their work on blockchains non-fungible (NFT), have approached the houses of auction. Additionally, retail investors have learned to cluster around so-called memes like GameStop and AMC Entertainment, proving their power against Wall Street short sellers.

Many DAOs are financial in nature to bring people together in droves to buy things. Recently DAO bought expensive NFTs, the rare Wu-Tang Clan album that once belonged to Martin Shkreli, and they are even trying to buy a team from the National Basketball Association. Some DAOs promise fractional ownership of items purchased.

This was not the case with the effort to buy the Constitution. Some organizers of the effort argued for fractional ownership, according to the New York Times, but feared violating securities law. (The initial coin offering, or ICO, the 2017 craze was stalled when the United States Securities and Exchange Commission cracked down on these crypto-venture fundraising efforts as illegal securities.) Instead, the ConstitutionDAO website says donors are given a governance token, not fractional ownership that would give donors the right to vote on the Constitution, especially where it is stored and how it is used. .

The Sothebys auction evening

The ConstitutionDAO auction did not go as expected at Sothebys. Members watched a live stream on YouTube, where comments from DAO members flooded the sidebar of the videos. After calls for tenders, the field quickly narrowed to two parties represented by Brooke Lampley, President of Sothebys and Global Head of Sales, and David Schrader, Global Head of Private Sales. (Representatives of the auction house were on live phone lines to contact potential buyers.)

But DAO members, many of whom waited for works by Matthew Wong, Mark Bradford and street artist Banksy to be auctioned off, did not appear to know who represented them when bidding for the copy. of the Constitution.

Are we with Brook or David? Whos dao ?, wrote one user on YouTube. ARE WE BROOKE OR DAVID ???????? another pleaded. Finally, Lampley, paddle 411 in hand, wins the auction. But it took nearly 15 minutes for ConstitutionDAO’s Twitter account to post its own defeat, and for the inappropriate celebrations and widespread confusion to end. Lampley represented a different buyer.

While not the outcome we hoped for, we still made history tonight, the statement read, hailing the effort as a victory for crowdfunding, online organizing and DAOs. But the ultimate goal was clear. We educated a whole cohort of people from all over the world, museum curators and artistic directors, asking us what [ether] that’s when they read about us in the news about the possibilities of the web3.

If successful, ConstitutionDAO would have been a fascinating example of a new form of online governance as Web3 advocates advocate a decentralized Internet. But as millions of dollars returned to DAO members, there might be a slight sigh of relief from the core team members, the effective leaders of an organization without a formal hierarchy. Now they and 17,000 other foreigners no longer have to worry about how to rule the collective and what to do with a copy of the US Constitution.

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