{"id":21084,"date":"2021-11-19T21:43:48","date_gmt":"2021-11-19T21:43:48","guid":{"rendered":"https:\/\/davidgerard.co.uk\/blockchain\/?p=21084"},"modified":"2021-11-20T15:59:47","modified_gmt":"2021-11-20T15:59:47","slug":"constitutiondao-fails-to-buy-the-constitution","status":"publish","type":"post","link":"https:\/\/davidgerard.co.uk\/blockchain\/2021\/11\/19\/constitutiondao-fails-to-buy-the-constitution\/","title":{"rendered":"ConstitutionDAO fails to buy the Constitution"},"content":{"rendered":"

The auction of an original printed copy of the US Constitution<\/a> on Thursday 18 November was not won by the bidder for ConstitutionDAO. Oh well!<\/p>\n

The document eventually went for $41 million, to an unknown bidder.<\/p>\n

ConstitutionDAO had gathered $47 million in ETH \u2014 but auction fees on a $41 million sale at Sotheby\u2019s New York would have been $5,963,000, plus a 1% Buyer\u2019s Premium, for a total of $6,373,000. [Sotheby\u2019s<\/i><\/a>; <\/i>Sotheby\u2019s<\/i><\/a>, PDF<\/i>]<\/p>\n

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The smell of hammers<\/h3>\n

The auction of the Constitution was set to start at 6:30pm New York time, though it didn\u2019t get going for another hour. Many viewers watched avidly on the live stream; the chat box was entirely crypto bozos. [YouTube<\/i><\/a>, art auction starts 1:06:00; <\/i>Twitter<\/i><\/a>]<\/p>\n

The first hour was an auction of modern art. The part of crypto interest was the sale of two Banksy paintings, for ether. The auctioneer had to translate US dollar bid increments into ETH as he went. At one point, he had to ask a colleague to translate the prices for him.<\/p>\n

The auction of the Constitution started around 7:30pm. [YouTube<\/i><\/a>, Constitution auction starts around 2:26:00<\/i>]<\/p>\n

Bidding started at $10 million \u2014 but rapidly jumped to $30 million.<\/p>\n

Sotheby\u2019s staff Brooke Lampley (Chairman & Worldwide Head of Sales for Global Fine Art, New York) and David Schrader (Head of Private Sales) placed bids for the two clients still in the game. [Sotheby\u2019s<\/i><\/a>; <\/i>Sotheby\u2019s<\/i><\/a>]<\/p>\n

Lampley\u2019s client eventually won the Constitution for $41 million.<\/p>\n

I understand that Schrader was the bidder for ConstitutionDAO. We don\u2019t know who the eventual winner, Lampley\u2019s client, was. Update:<\/b> The winner was Ken Griffin, CEO of hedge fund Citadel. He’s going to lend the document to Crystal Bridges Museum of American Art in Arkansas. [WSJ<\/a>, paywalled<\/i>]<\/p>\n

ConstitutionDAO did initially claim in a Twitter Space that Lampley was their bidder and they\u2019d won the auction. CoinDesk ran this uncritically, then deleted the article<\/i> when they turned out to have run nonsense. They later put the article back as having been \u201ccorrected\u201d. [CoinDesk<\/i><\/a>]<\/p>\n

Participants in the Twitter Space were mostly in favour of refunding the ETH to donors \u2014 though some suggested using it for new projects. [Twitter<\/i><\/a>]<\/p>\n

Doing some of the paperwork<\/h3>\n

Everything about this decentralised enterprise revolved around a collection of completely centralised entities.<\/p>\n

ConstitutionDAO LLC did finally get it together to form its LLC \u2014 a Delaware for-profit company.<\/p>\n

Remember that there was no “DAO” controlling the large pile of ether \u2014 a 13-sig multisig collected the ETH, this two-person LLC would decide what happened to the money.<\/p>\n

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But ConstitutionDAO didn’t end up using the LLC \u2014 they sent the money via Endaoment, a nonprofit. The ETH was sold at FTX for dollars, and Endaoment collected the dollars, actually did the bidding, and would have paid the money to Sotheby\u2019s if they\u2019d won the auction. [Endaoment<\/i><\/a>; <\/i>ConstitutionDAO FAQ<\/i><\/a>]<\/p>\n

Juicebox has a pile of settings for a DAO that\u2019s run via Juicebox \u2014 and ConstitutionDAO seems to have used almost none of them. In particular, there\u2019s a pile of stuff around how to return value to shareholders, and none of it is set up for ConstitutionDAO.<\/p>\n

ConstitutionDAO has promised to refund all donors via Juicebox, however \u2014 minus Ethereum gas fees. [Twitter<\/i><\/a>]<\/p>\n

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It's harder than you'd think explaining that you're a partial owner of the US constitution… <\/p>\n

ft @dhtoomey<\/a> pic.twitter.com\/WF0LKylK4S<\/a><\/p>\n

— Morning Brew \u2615\ufe0f (@MorningBrew) November 18, 2021<\/a><\/p><\/blockquote>\n