They Love Crypto. They’re Trying to Buy the Constitution.
How a “financial flash mob” is trying to raise $20 million for a rare copy of the U.S. Constitution.,
In September 1787, a group of delegates gathered in Philadelphia to sign the U.S. Constitution.
This week, a hastily organized crypto-collective is trying to buy it.
The group, called ConstitutionDAO, is a seat-of-the-pants experiment by thousands of cryptocurrency fans who have pooled their money to make a bid on a rare original printing of the Constitution. The document, one of only 13 surviving copies, is being auctioned on Thursday by Sotheby’s, which estimates it will sell for $15 million to $20 million.
News of the group’s bid set off a frenzy of memes, jokes and pledges. The money came in so fast that one observer compared it to a “financial flash mob.” Within 24 hours, the group had raised $4.5 million worth of Ether, the cryptocurrency it is using to solicit contributions. (As of Wednesday morning, it had raised $12.8 million.)
Group bids for big-ticket collectibles aren’t new. But ConstitutionDAO is a particularly quixotic example of what’s known as a “decentralized autonomous organization,” a kind of internet-native co-op that is governed with cryptocurrency tokens and blockchain-based “smart contracts” instead of traditional corporate boards and bylaws.
DAOs — which have been compared to chat rooms with bank accounts — can be messy and confusing. Some early experiments were derailed by hackers and governance disputes. But crypto advocates believe that they will become a popular form of organization in the coming years — a kind of leaderless online swarm that can pop up in an instant to build products, make investments or just tap into the zeitgeist.
Recently, DAOs have been making news for buying expensive collectibles. In April, a group of anonymous investors called PleasrDAO spent $5.4 million on an NFT, a digital asset, affiliated with the whistle-blower and activist Edward Snowden. Last month, the group paid $4 million for a rare Wu-Tang Clan album that was previously owned by the imprisoned financier Martin Shkreli.
A successful bid for the Constitution would likely be the largest purchase by a DAO. And it would signal that these groups could extend their reach beyond digital goods and into more traditional markets.
Austin Cain, 25, a financial adviser in Atlanta who is helping to organize ConstitutionDAO, said in an interview this week that the group’s goal was to “purchase the Constitution of the United States in a way that utilizes the capabilities of the technology we all believe in.”
Like many crypto-world phenomena, ConstitutionDAO was born in the gray area between dumb stunt and serious business venture. Last week, when stories about the Sotheby’s auction began circulating, a group of acquaintances started half-seriously DMing one another on Twitter about bidding on it. They organized a Zoom call, and began working through some of the logistics.
“When I first got on the Zoom call, I was thinking that maybe the odds of this happening were about 20 percent,” said Julian Weisser, an investor in South Dakota. “And then we started talking and I said: Wow, there’s some interest here.”
For some, the bid was pure caper. But the more earnest participants started seeing parallels between crypto culture — a world full of outsiders, iconoclasts and radical governance experiments — and the values of the Constitution’s original framers.
“Decentralization and cryptocurrency (web3) have created structures that allow people to self-govern with unparalleled levels of autonomy and freedom,” the group’s website reads. “It’s fitting that we use this technology to honor and protect the greatest historical tool for human governance: the U.S. Constitution.”
ConstitutionDAO now has roughly 30 volunteer “core contributors,” who include entrepreneurs, investors, a purple-haired developer and at least two teenagers. None of them are experienced collectors of historical artifacts, and they are figuring out many of the details as they go. Over a series of sleepless nights, they put up a website, formed subgroups to research the various legal and financial wrinkles associated with the auction, and opened a Discord server that swelled to more than 13,000 members.
The copy of the Constitution being auctioned by Sotheby’s belongs to Dorothy Goldman, the widow of a New York real estate developer who bought it for $165,000 in 1988. It’s the only known copy of the Constitution that is privately owned — a fact that intrigued the members of ConstitutionDAO, who saw an opportunity to make it accessible to a wider audience.
If it wins the auction, the DAO plans to team up with a prominent museum or historical society to exhibit the document in a free, public setting. Organizers have had discussions with the Smithsonian and the New York Public Library about hosting it, they said, although the artifact’s final destination will be decided by a vote of the DAO.
“We’re going to stop it from going into more private hands and actually open-source it, make it a public good,” said Alice Ma, one of the organizers.
In truth, ConstitutionDAO is more a symbolic gesture to decentralization technology than a real-world demonstration of it. Some in the group had initially hoped to make participants fractional owners of the Constitution, but that plan fell apart, possibly because it could run afoul of securities laws. The current plan is to issue crypto tokens, called $PEOPLE, that will entitle participants to vote on certain decisions governing the Constitution’s use, but won’t confer any actual ownership.
In addition, since Sotheby’s accepts only government-issued currency and doesn’t allow DAOs to bid on auctions directly, the group plans to work with a crypto exchange that will convert its Ether to dollars before the bid, and a crypto nonprofit that will place the bid on the group’s behalf. According to the group’s FAQ document, a limited liability corporation will take control of the Constitution temporarily while the DAO figures out a long-term ownership structure.
Many DAOs are speculative in nature; investors buy in hoping that the assets the group acquires will be worth more later on. But ConstitutionDAO’s organizers say making money is not a goal.
“No one is talking about anything related to speculation,” said Will Papper, a San Francisco crypto entrepreneur who is helping to organize the bid. “Everyone’s talking about how we should steward the Constitution.”
Well, that and about a million other things. A spin through the group’s Discord server on Tuesday revealed a torrent of chaotic chatter, debates over fine print and a shocking number of memes involving Nicolas Cage. (Mr. Cage starred in a movie about a plot to steal the Declaration of Independence, which appears to be close enough to the Constitution for the group’s taste.)
There was an audio channel where a man read the entire Constitution, line by line, over a soundtrack of soothing hip-hop beats. There were channels filled with questions for the organizers, which ranged from boring (“Has the L.L.C. structure been run by a tax advisor?”) to intriguing (“Is there a safeguard to make sure the DAO doesn’t vote to eat the constitution? Or other method of destruction?”)
Buying the Constitution, it turns out, is a hard, weird project, made even harder and weirder by the choice to do it in less than a week with a bunch of internet strangers, inside a new, complicated organizational structure that nobody outside the crypto world fully understands yet.
And it could all be for naught, if ConstitutionDAO is simply outbid by someone with deeper pockets. If that happens, participants will get their money back, minus transfer fees.
But the group’s members are already talking about owning the Constitution as if it’s a done deal.
Their motto is “WAGBI,” or “we’re all gonna buy it.”