Constitution DAO closed for failure to purchase the U.S. Constitution
ConstitutionDAO, a decentralized autonomous organization fighting for the U.S. Constitution, will announce its withdrawal after failing to purchase a rare copy of the document at Sotheby’s auction house last week.
Although it failed to complete its main mission, the organizers believed that the DAO “still made history” and tried to unite the scattered communities to purchase historical documents. According to them, their efforts “have educated a whole group of people around the world-from museum curators and art directors to our grandmothers, asking us what ETH is when they see us in the news.”
The Constitution DAO was able to raise $48.9 million from more than 17,000 people to purchase the Constitution. However, it lost the bid of hedge fund billionaire Kenneth Griffin.
According to Graham (NYSE:) Novak, organizer of ConstitutionDAO, “The community has taken all the actions it has organized to complete.” Therefore, the group announced that it would close.
How about the funds raised? Well, the biggest question is still what will happen to the nearly $49 million that has been raised. Although there are discussions about keeping the project running and shifting the focus to new ideas or organizations, the main purpose of the organization is to win the U.S. Constitution.
“Ultimately, we have made a decision that moving forward without the unified mission of buying a constitution, establishing more official governance and opening a new chapter is not something we can support as a core team,” the team said in a tweet.
Looking to the future, the DAO has pledged to return donations to the community. However, some members are worried about how much they will be refunded.
For clarity, donations are kept in a multi-signature wallet, which is controlled by the 13 “core contributors” of ConstitutionDAO. Before any funds can be transferred, 9 out of 13 contributors need to sign a transaction. The funds will be returned using the same method.
After carefully considering the feedback from our community members and partners, we decided to issue donation refunds through the same Juicebox mechanism as the original collection of donations, instead of trying to immediately initiate a new governance plan and token refunds.
This may not be as simple as it seems, because allegations have been circulating. on Sunday, Nike (New York Stock Exchange:) Bax accuses core contributors of “making internal decisions that cause wild fluctuations.”
@ConstitutionDAO The core team is either incompetent or malicious. They are making internal decisions that cause wild fluctuations. Types of transactions that insiders can easily trade. Does anyone know an on-chain analyst who knows what to look for? https://t.co/V8dAxTeHOS pic.twitter.com/afQu1tKmkL
— Nick Bacchus (@bax1337), November 22, 2021
Bax further explained that despite Juicebox’s warnings about the shortcomings of this approach, a snapshot of the holders of the group’s governance token PEOPLE was taken on a specific blockchain on Friday (around 6:12 UTC).
Soon after, some PEOPLE holders sold their tokens to Ethereum, forcing the value of the tokens relative to ETH to plummet by more than 82% within a few minutes. As expected, former PEOPLE holders believe that there is no need to continue to hold tokens because a snapshot has been taken. As the value drops, speculators scramble to buy tokens. The team later announced that it was deprecating the snapshot method.
It is worth mentioning that donors still need to pay gas fees to receive their ETH. According to Dune Analytics, the donor spent nearly 200 ETH or $866,918 in fees. At this rate, they will not be able to recover their original investment. For smaller investors, the situation is even worse, because in the current transaction costs of the Ethereum network, the cost of fees may be more valuable than their contribution.
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