A Decentralised Autonomous Organisation (DAO) group, Constitution DAO, has announced it has lost the bid to buy one of the existing original prints of the US constitution. The DAO, made up of a group of people who met online, was looking to purchase the constitution from the art dealer Sotheby’s, only to be outbid by Citadel CEO Kenneth Griffin, with the constitution selling for $43.2 million.
Earlier on, there was much excitement within the community as some members mistakenly believed they had won and announced it live on Twitter. Only for the group to later release a statement clarifying that they had indeed lost.
Even though they might have lost their bid to buy the constitution, the group has shown how much the blockchain and DAOs can be used in facilitating actions. It is a unique study on how people can come together as the project broke the record for the most money crowdfunded in less than 72 hours.
One of the organisers of the group claimed they lost their bid as they failed to raise enough money required for maintaining and caring for the document on an ongoing basis. With the failed bid, the participants will receive their money back, less gas fees. They were given two choices: either return the $PEOPLE, Constitution DAOs governance token, for ETH (minus gas) or to receive a new governance token We The People ($WTP) (no gas needed to be paid).
An experiment in governance
The DAO is introducing a new age in governance and organisational operations. It is a type of online community using blockchain to allow for members to participate in decision making through voting. Unlike traditional organisations where only a few people make decisions on behalf of all the members, DAOs allow every member the ability to be involved in the voting process.
People that invest in DAOs will often receive tokens with voting power. As a new governance experiment, purchasing the US constitution was a big move for the group. At the start, the group had a goal to raise $20 million. However, following the social media hype particularly on Twitter, the group actually collected $47 million.
The group successfully came together in short notice to raise a large amount of money, which shows how a DAO can facilitate crowdfunding, governance and accountability.
DAO risks
Even though DAOs offer a new age of transparent governance, it has a number of concerns for those who join. The first concern is regulatory issues. As a new sector, the DAO, as well as digital currencies, still lack a concrete legal structure. The developers and participants in these DAO platforms have a higher risk of liability compared to shareholders in traditional regulated corporations.
There is also the issue of the knowledge gap. Most of the people who join a DAO are new to the crypto world. They are yet to fully understand the extent of digital currencies outside the scope of the given DAO project. Therefore, there’s a need to take some time to train beginners and newcomers.
DAOs have more potential for bigger things. As the blockchain world becomes more mainstream and regulations become clearer, DAOs will become formidable entities as they are used to create and run global organisations or potentially even cities.
