ConstitutionDAO Members Decry High Gas Fees After Narrowly Losing Auction
ConstitutionDAO lost its bid for a copy of the founding charter of the United States.
By: Samuel HaigDeFi News
ConstitutionDAO fell short in its bid to purchase the last remaining privately owned first edition print copy of the U.S. Constitution in a public auction held on Nov. 18. And some of the community’s members are grumbling that high gas fees may have been partly to blame.
Although the community raised about $47M, the document was sold to an unknown bidder for $41M ($43.2M including auction fees). Supporters speculated that the DAO lost because it couldn’t produce enough additional funds to maintain the document. Others said the DAO may have made a stronger bid if it had used a Layer 2 blockchain instead of Ethereum’s mainnet.
“The gas fees spent would have made up the difference of winning the auction,” said Dennis Hegstad, the founder of LiveRecorder founder.
This version of the U.S. founding charter is one of thirteen surviving copies printed after the Constitutional Convention of 1787. The late real estate developer Howard Goldman purchased it from Sotheby’s in 1988 for $165,000.
Proceeds from the auction went to the Dorothy Tapper Goldman Foundation, which was founded by Howard Goldman’s widow in 2018 and provides scholarship funding for constitutional studies and the preservation of rare documents from U.S. revolutionary history.
ConstitutionDAO began as a lofty idea concocted by a small group of crypto enthusiasts that quickly grew into a thriving Discord channel boasting more than 8,000 members in less than one week. It cast a spotlight on the burgeoning DAO movement and attracted mainstream media attention.
PEOPLE Governance Tokens
In total, 17,437 wallets backed ConstitutionDAO’s auction bid, contributing a median donation size of $206.26 each. Despite the project failing to win the auction, it set a new record for the largest sum of money raised within 72 hours.
“This is the largest crowdfund for a physical object that we are aware of — crypto or fiat,” the ConstutionDAO team wrote in a Nov. 19 tweet. The post also highlighted that the auction was the first instance in which major auction house Sotheby’s had worked with a DAO community.
Backers were to be issued PEOPLE governance tokens that could be used to vote proposals pertaining to the operations and structure of the project should the auction have been successful. Supporters are now able to claim a refund on their contribution minus gas fees.
“This is the largest crowdfund for a physical object that we are aware of — crypto or fiat.”
The project inspired monetary contributions from prominent crypto figures including a16z and Compound, in addition to in-kind contributions from Syndicate DAO.
ConstitutionDAO’s Julian Weisser had told media that winning the auction would have validated DAO-mediated direct democracy in a way that would capture the attention of the mainstream.
There were lessons from this experiment. On Twitter, the ConstitutionDAO community expressed dissatisfaction with the decision for fundraising to take place on the Ethereum mainnet. Many supporters claimed that small contributions had entirely been spent on gas fees.
“Damn so my $120 contribution less $60 of gas fees is worth $60 and now you’re gonna send it back to me with $60 of gas fees so I get nothing lmao. Keep it!” tweeted PhilidorRX.
Several commenters also asserted that the DAO should have used a Layer 2 solution such as Polygon for fundraising to offset gas fees, while others vouched for rival chains like Solana.
At $206 average contribution amount, what will be the net refund after gas fees?
— daedalus (@DaddyDaedalus) November 19, 2021
However, many commenters also praised the project and its broader community for their rapid mobilization, growth, and fundraising. Founder of PlatyPunks, Nick Mancini, responded: “If Ethereum didn’t exist you wouldn’t have been able to do the biggest crowdfund in history in just a few days.”