ConstitutionDAO

What is ConstitutionDAO (PEOPLE)?

The ConstitutionDAO was a group of over 17,000 Web3 enthusiasts who pooled their funds to purchase a copy of the US Constitution at a Sotheby’s auction in November 2021. This event grabbed global headlines because it is believed there are only 13 physical copies of the document, which led to an extremely competitive auction.

The group, set up as a decentralized autonomous organization, or DAO, raised $47 million in ETH. Unfortunately, its efforts at the auction were unsuccessful, and the ConstitutionDAO announced that it would disband and refund all donations.

The eventual selling price of $43.2 million was a staggering windfall for Dorothy Tapper, whose late husband S. Howard Goldman had bought the copy for just $165,000 in 1988. Proceeds of the sale benefited the Dorothy Tapper Goldman Foundation, which has a stated mission of furthering the understanding of democracy and how the acts of all citizens can make a difference.

An ironic twist, perhaps, since the auction saw a group of thousands, many or most of them US citizens, lose the auction to hedge fund billionaire and top US right-wing donor Ken Griffin.

Who are the Founders of ConstitutionDAO?

The ConstitutionDAO was a grassroots Web3 fundraising movement with a shared vision and purpose and has no single founding person or entity. While the DAO had a treasury of $47 million, it did not outbid Griffin’s $43.2 million because organizers felt they would not have sufficient funding to protect, insure, and move the piece had they bid higher and won.

How Does ConstitutionDAO Work?

ConstitutionDAO is a defunct, decentralized autonomous organization that collected donations on the Ethereum blockchain. This allowed it to build up a significant pool of funds, far higher than the $15-$20 million that Sotheby’s had expected the bidding to reach.

However, the group ran afoul of Ethereum’s storied congestion in 2021. While a whole host of scaling solutions have since emerged, 2021 was the year of gas fees, and Ethereum was an extremely expensive blockchain to transact on. As a result, many ConstitutionDAO members paid close to $100 in gas fees to hit the median donation of $200, and refunds required a similar expense.

According to reports, the DAO didn’t quite live up to its name because no votes were ever carried out using the PEOPLE token.

What Makes ConstitutionDAO Unique?

While the ConstitutionDAO was beset by chaos and network fees across its admittedly short existence, it does provide a proof-of-concept. Perhaps even more worrying for the status quo, it also gave a glimpse at how a hastily assembled collective of enthusiasts could almost outdo one of the deepest sets of pockets in TradFi.

The ConstitutionDAO’s closing announcement put this in glowing terms:

“This project was a landmark event that showed the entire world that a group of internet friends can use the power of web3 to face a seemingly insurmountable goal and achieve incredible results on an impossible timeline. It is our sincere hope that this project will spark many others that take inspiration from the enthusiasm and accomplishments of everyone involved to use the power of web3 to make a positive impact on the world.”

Who Bought the Copy of the Constitution?

The copy of the US Constitution auctioned by Sotheby’s in November 2021 was won by Kenneth Cordele Griffin. The amount of funds collected by ConstitutionDAO was publicly known, and for this reason, it is considered that the billionaire had an inside track.

Griffin is the founder and CEO of Citadel Advisors, a hedge fund, and Citadel Securities, a market maker. Despite keeping a low public profile before 2021, Griffin shot to fame earlier in the year when he appeared before Congress in the wake of various brokers, including Robinhood halting retail purchases of selected stocks in late January. His testimony, according to Marketwatch, spurred the trending Twitter hashtag “#kengriffinlied.” Ken Griffin was also the top donor to the US Republican Party in 2022 and is often mentioned in the same breath as Sam Bankman-Fried. Though, unlike the disgraced FTX founder, Griffin is a staunch critic of cryptocurrencies, terming them a “jihadist call” against the US dollar. Comedian and political commentator Jon Stewart even compared Citadel directly to FTX, asking how FTX’s business is “any different than Ken Griffin running a hedge fund at Citadel and also being the most gigantic market maker that we have?” Griffin’s firms certainly have a checkered past, with a laundry list of regulatory sanctions. Citadel was even banned from operating in China for abusive trading practices. Griffin himself is a notable collector of art, an asset class with a far worse reputation than crypto, and real estate.

What is the Use of PEOPLE?

The PEOPLE token is the governance token of the ConstitutionDAO, although it hasn’t really seen its full intended use since the group disbanded after losing its bid. The PEOPLE token is an ERC-20 token on the Ethereum blockchain and is secured by Ethereum’s robust proof-of-stake consensus.

Currently, the PEOPLE token has no rights, governance, or utility other than redeeming them for ETH from the Juicebox smart contract at a ratio of 1 million to 1. This is the same ratio at which contributions were made when crowdfunding was initially carried out.

However, PEOPLE holders are not forced to redeem them and can hold onto the tokens in case parts of the community decide to use them for future projects.

How Much PEOPLE is in Circulation?

The PEOPLE token has a circulating supply of over 5 billion. This figure may diminish if holders decide to redeem ETH, but PEOPLE holders are not compelled to do so and may instead hold the token for the future.

How Do You Buy PEOPLE?

You can buy PEOPLE tokens directly from the Juicebox smart contract if you have some ETH in your wallet. Alternatively, you can use a variety of cryptocurrency exchanges to do so. Exchanges will give you more options than just ETH, allowing you to pay in stablecoins, other cryptocurrencies, and even fiat.

How Do You Store PEOPLE?

You can store PEOPLE tokens on an exchange account or in a cryptocurrency wallet. Any Ethereum wallet can handle your PEOPLE tokens, so you could choose between the convenience of a browser extension like Metamask or a hardware wallet like Ledger.

Is PEOPLE a Good Investment?

Currently, the PEOPLE token has no real utility, although it is possible that part of the former ConstitutionDAO community may build something that incorporates it.

However, it does have value, thanks to the fact that it is redeemable for ETH. This gives it a property similar to that of a stablecoin and enables arbitrage trading. It’s unlikely that this is a good enough reason to invest in the token, though, and it carries more risk than simply investing in ETH.

Regardless of whether the token itself finds a future use or fades into obscurity, the story of ConstitutionDAO remains one of crypto’s milestone moments. While it proved unsuccessful in the end and undone by transparency itself, it may yet be part of the blueprint for a decentralized future.