ConstitutionDAO was a decentralized autonomous organization (DAO) that formed in November 2021 with the goal of crowdfunding to bid on a rare first printing of the U.S. Constitution at auction. The group utilized memes, cryptocurrency and an experimental governance structure to rapidly gain momentum before losing the auction in a record-setting bid. In this comprehensive guide, we’ll explore the origins, operations, outcomes and legacy of ConstitutionDAO.
Origins of ConstitutionDAO
ConstitutionDAO originated from a tweet by blockchain protocol developer Travis Levy on November 12, 2021. As news broke that Sotheby’s would auction a 1787 printing of the U.S. Constitution, Levy suggested crowdfunding to buy it and put it in the public domain.
The idea immediately gained steam on CryptoTwitter and Discord, aligning with the ideology of Web3 and DAOs democratizing ownership. Within days, ConstitutionDAO was formed as an LLC DAO on Ethereum, allowing anyone globally to contribute to the bid in the PEOPLE governance token.
Calling itself the «DAO that wants to buy a copy of the US Constitution», ConstitutionDAO embodied a spontaneously viral decentralized movement. Its clever memes and messaging spread rapidly across social media, capturing public imagination.
Operations and Governance
ConstitutionDAO utilized a simple governance structure to coordinate its crowdfunding. PEOPLE tokens were minted based on contributions, with no cap. 1 PEOPLE represented one vote – a directness not seen in most DAOs.
Despite the rush, ConstitutionDAO incorporated safeguards like multi-sig for its Ethereum treasury and independent watchdogs to advise on operations. A core team coordinated communications, legalities and auction logistics smoothly as interest exploded.
While basic in structure, ConstitutionDAO embodied the possibilities of decentralized coordination towards a time-sensitive goal. $47 million was crowdfunded entirely peer-to-peer in just one week.
The Auction Outcome
On November 18th 2021, bidding for the Constitution copy opened at $15 million. ConstitutionDAO led early on with its crowdfunded war chest. But in the end, it was outbid at $41 million by billionaire Kenneth Griffin.
While it lost the auction, ConstitutionDAO still set records for the highest crowdfunded bid in history. It also retained the $47 million PEOPLE treasury, sparking debate on what it should be used for next.
The hype attracted scammers and opportunists, but ConstitutionDAO maintained its credibility by refunding contributors. The experience highlighted challenges decentralizing institutional processes into a week-long frenzy.
Legacy and Impact
ConstitutionDAO ultimately failed its titular goal but succeeded as a social experiment in decentralized coordination. It proved the ability for an impromptu crypto-native movement to create shockwaves at the highest institutional levels.
The experience left participants and observers with many questions on how to balance the possibilities of internet-native organizations with practicality and longevity. But it undeniably validated that DAOs can compete at any scale with the right conditions.
ConstitutionDAO also illustrated gaps in replicating legacy centralized institutions in a decentralized format. Auction houses like Sotheby’s evolved over centuries, while ConstitutionDAO had days. This clash of paradigm highlighted just how disruptive decentralized coordination can become.
Aftermath and Dissolution
After the auction, proposals were made within ConstitutionDAO on how to allocate funds next, including new public domain projects. However, momentum fizzled out amidst uncertainty on continuing such an impromptu organization.
By December 2021, ConstitutionDAO participants voted to dissolve the DAO and refund all PEOPLE contributors minus gas fees. This closure mirrored its spontaneous inception, with the group acknowledging its ad-hoc nature and one-off success as a novel but transient experiment.
In its brief but eventful lifespan, ConstitutionDAO displayed the potential for decentralized coordination towards ambitious goals. While it did not win the auction, it won public imagination and validated new possibilities for organizing peer-to-peer movements online.
ConstitutionDAO will be remembered as one of the first major crypto-native DAOs that delivered astonishing results in record time, foreshadowing the broader growth of decentralized organizations.