• Michael Bacina

Original copy of US Constitution nearly bought by DAO

A Decentralised Autonomous Organisation (DAO) nearly pulled off a historic purchase of the only copy from an original printing of the US Constitution in private hands during a recent auction, coming in second.

The DAO, named ConstitutionDAO, was formed in order to accept contributions to purchase the copy of the Constitution, using a Gnosis safe with 13 signers to set up a very lightweight structure. The DAO received over 17,000 contributions with a median contribution size of USD$206.26, raising over USD$40M in a week. This is all the more impressive as the team behind the DAO did it as volunteers and spent no money promoting the DAO at all.

The funds were raised at a grassroots level and were never intended to create ownership for contributors, rather contributors to ConstitutionDAO received a "governance token". These tokens typically refers to a token which includes only rights for voting on proposals raised for a project and do not provide the holder with any ownership in any of the underlying assets of a DAO project.

The nearest analogy to a governance token would be a membership in a club with no entitlement to receive any asset on winding up, but in many cases DAOs allow 1 vote per token rather than 1 vote per member.

The bidding on the Constitution reached USD$43.2M and was won by Kenneth Griffin, the "villain" of the recent GameStop short squeeze. Mr Griffin is loaning the Constitution to a museum in Arkansas. While the ConstitutionDAO had enough funds to keep bidding, a concern was that if the DAO used all funds for the auction there would be none to ensure ongoing care and protection of the Constitution.

Given the recent (and rising) interest in DAOs, including the Senate Committee into Australia as a Technology and Financial Centre recommending that the Australian Government create a legal form of company to support DAO organising, and a speech on Monday 22 November where Minister Jane Hume will specifically identify DeFi as a huge opportunity for Australia, this is a fascinating example of how a group of people can come together collaboratively in a short period of time and come very close to achieving a community oriented outcome without using any existing legal structure.