> We intend to put The Constitution in the hands of The People.
Like the US Archives aren't owned by the government of the people. Instead this will be owned by a very few ETH holders willing to participate.
But this might be one of the biggest fundraisers I've seen and it probably wouldn't have happened without the crypto ecosystem. For that, I am very excited.
> Like the US Archives aren't owned by the government of the people. Instead this will be owned by a very few ETH holders willing to participate.
The ConstitutionDAO changed their website to remove references to distributed ownership. They went on to clarify that owners of the token won't have fractional ownership of the copy of the constitution.
The also added clarification on the website about ownership questions:
> No. You are receiving a governance token, not fractionalized ownership. Governance includes the ability to advise on (for illustrative purposes) where the Constitution should be displayed, how it should be exhibited, and the mission and values of ConstitutionDAO. ConstitutionDAO is taking donations and donors are receiving governance tokens with no expectation of profit.
So someone will technically own it, but it won't be the people who bought these tokens. In theory the token holders can vote on things, but they go out of their way to clarify that the votes are advisory in nature.
Anyone who buys into this is basically making a donation to this group. The crypto and DAO stuff is just window dressing.
DAOs (distributed Autonomous Organizations) could be better thought of in a corporate governance framework.
A) Least distributed corporate governance: Sole proprietorship who owns 100% of their business
Every other organization sits between least and most distributed
B) Most distributed corporate governance: Full democracy state controlled
DAOs are special because the voting mechanism lets people vote across boarders/jurisdictions etc from their computer... but it also relies on the creators giving the right level of control to the DAO voting. If they gave voters 100% control, someone could do a 51% attack and have it destroyed, or something else. But, if they don't give enough control it is effectively a rug pull.
ConstitutionDAO is an amazing initiative because it puts so many assumptions up for a test, and crosses crypto world to mainstream. Its revolutionary.
The 'power' struggle is real... and fully on display
If there is an undemocratic layer exercising overall control then the net result is authoritarian. It would be neither distributed nor autonomous. It’s precisely why democratic governance generally tries to balance power between elements that can exercise checks on one another and why eroding those checks is so worrying.
Like if you’re trying to buy the constitution in a democratic fashion you’d think you’d at least try to understand what it means.
> DAOs are special because the voting mechanism lets people vote across boarders/jurisdictions etc from their computer... but it also relies on the creators giving the right level of control to the DAO voting.
Aren't these votes broadly speaking non-binding?
Is this really any different than an LLC that runs a periodic twitter poll?
Yes, one major difference between DAOs and LLCs is that DAOs exist in a nebulous legal space and might technically be general partnerships. Members of a DAO have potentially unlimited liability if it gets sued.
It's not amazing. Like any company (a DAO is just a company), it could be run well, by good people, or run badly, by bad people. Whichever ways it turns out will not prove anything about DAOs.
A DAO is more like a specific corporate governance mechanism than a company. For example, ConstitutionDAO will be a non-profit, with a non-profit board etc. I presume they will put things up for vote using the DAO.
If it is executed flawlessly it will prove DAOs as a viable corporate governance mechanism. If it fails or struggles, there will be learnings.
> For example, ConstitutionDAO will be a non-profit, with a non-profit board etc.
Ok but you can just form a 501(c)(3) whenever you want right, which actually has some force of law over its activities.
> I presume they will put things up for vote using the DAO.
But... they don't have to.
It's all fun and games until there's a disagreement over what to do. The way in which a meaningful disagreement is resolved is what will prove the viability of this model. When everyone's aligned already, it doesn't really prove much.
This is rather unfortunate. I understand they have good intentions of keeping an important document out of private collector hands but this would have been a stellar time to issue governance tokens and expose the wider world to the potential offered by DAOs.
> "they have good intentions of keeping an important document out of private collector hands"
Well, out of other private collector hands, into their own private collector hands. As other commenters have pointed out, the members of the public who donate to this don't have any form of ownership.
They could have formed a 501c3 non profit, accepted tax deductible fiat donations, established a governance model, and arranged ongoing storage and viewing of the document. Private shared ownership could’ve been membership interest in an LLC managed by Carta or similar. LLCs have no membership limit unless taxed as an S corp (to my knowledge).
I bet if you brought Carta enough money they’d prioritize an option to make your ownership interest public and shareable on their backlog, by entity, individual participant, or however else you want to slice and demonstrate ownership interest.
> Private shared ownership could’ve been membership interest in an LLC managed by Carta or similar. LLCs have no membership limit unless taxed as an S corp (to my knowledge).
You can’t offer membership interest to the public unless you are registered with the SEC and in compliance with the states you make your public offering. There are some exceptions to the SEC for limits much lower than the ~$30M raised as of now.
but they didn’t offer a security or investment contract, they offered a token that gives holders a form of governance/voting.
You are saying you offered a suggested oath to “avoid unnecessary tech”, but you removed the concept of a voting right for a security.
There is plenty of precedent of the SEC responding favorably to “no action letter requests” without requiring registration when organizations publicly offer voting/governance rights in exchange for money.
but they didn’t offer a security or investment contract, they offered a token that gives holders a form of governance/voting.
You are saying you offered a suggested path to “avoid unnecessary tech”, but you removed the concept of a voting right for a security by suggesting they could have offered interest in an LLC.
There is plenty of precedent of the SEC responding favorably to “no action letter requests” without requiring registration when organizations publicly offer voting/governance rights in exchange for money.
> It cannot be taken for granted that they have good intentions.
This is where I pull back and kinda laugh with irony at the effort. Much of this process (most likely because of the hurried pace) seems to be "just trust us" but wasn't the whole point of the Constitution to build a system of checks and balances so we didn't have to just trust one group of people?
> You are receiving a governance token, not fractionalized ownership. Governance includes the ability to advise on (for illustrative purposes) where the Constitution should be displayed, how it should be exhibited, and the mission and values of ConstitutionDAO.
uh, that’s what they’re doing. They ARE issuing governance tokens.
I think you're right that the lack of fractional ownership undermines what should be the primary benefit of the crypto + DAO model.
However, I think they aren't doing the fractional ownership to avoid running afoul of securities laws-- ie. this is a coincidental drawback of this instance of a DAO under today's US laws, and less so a fundamental issue with the DAO model.
90% of what “ownership” of a non yield-bearing asset gets you is governance over the project. We’ve seen things like UNI and ENS which are governance tokens w/o any yield component, and they keep value. So it’s sort of just a game of semantics. Plenty of people are contributing to this expecting that the governance token will be worth as much as their contribution — you’re just not supposed to be super vocal about that to avoid drawing attention from the SEC.
While also true, the reason they changed the wording is for regulatory purposes, and is not at all the limitation of the token or the project.
This is standard word games in crypto projects that are acknowledging their US components. Keeps the SEC off their backs.
It is not possible for projects to compete with asian crypto token offerings that say speculation inducing things. But if you understand already you can see through it and speculate wildly for great reward.
it has previously been in a private collection, and without constitutiondao would end up in another private collection.
the intention of the dao is clear, display it in a public museum with free entry.
and yes, from a joke last friday to likely suceeding in less than a week! exciting. the velocity of daos is remarkable, and i think it is a just a small hint of what is to come in the future. and it is coming quick.
(meanwhile i expect hn to continue talking about tulips or something :)
Have there been any DAOs designed for long term impact that have been successful at their intended task? Is there a DAO for nuclear fusion and fission projects or anything else that has real world relevance?
Cool idea but this makes too much sense for anyone in the crypto community to take it seriously. They mostly care about what gets the most likes and upvotes on Twitter and Reddit.
you’re criticizing this approach, but twitter and reddit matter. how do you get 10000 people to each give $2000 to a project over the course of 3 days? no startup, no matter how good their product, pulls that off without a strong marketing team. most fail even with traditional marketing.
how do you sell to the millenial/zoomer audience? memes. you make it a social experience. you create not just shared governance over a document, but an entire community around it. organize events like watch parties, etc. especially covid era, creating communities is more valuable to certain groups than is creating an incrementally better search engine.
I don't understand what you're arguing. I don't find meaning, value, and substance in memes and digital communities structured around DAOs. I'd much rather be involved in some real world community that is working towards solving some tangible problem instead of wasting my time speculating on pixelated NFTs or buying something that already belongs to every citizen of the United States.
I think you're missing the point. What if it became a meme to collectivize around a DAO that meme-ifies fighting climate change? Would that be something that interests you? A good example of someone that already altruistic things for the world and makes it fun is Mr. Beast on youtube.
For instance on a quick search I found this video of him rallying a bunch of people to clean an extremely dirty beach.
Humor and productivity don't have to be mutually exclusive. Maybe humor and fun is the way we get the average person to engage in collective action and do things that everybody thinks are impossible otherwise.
Maybe you could use your imagination a little bit to potentially think about why something like ConstitutionDAO might have larger implications than "it's just another ponzi-scheme. Or fall in line with the rest of Hacker News that fails to see how real people can benefit from an interesting technology.
Please explain to me how real people are benefiting from buying something that already belongs to them or how meme-ifying a global existential crisis is beneficial. I mentioned in another comment that I find the crypto community to be childish and seeing things like this does not convince me the community is mature or sensible enough to tackle real problems.
Madagascar is currently going through a humanitarian crisis. Millions of people are facing starvation there and are likely to perish from it [1]. Is anyone in the crypto community trying to coordinate and organize some kind of humanitarian aid for Madagascar? Because if they did that then it would prove to everyone that this technology could be used to affect meaningful change for people in the real world.
This specific copy of the constitution doesn't belong to the people, it is privately held and being auctioned. But if you are talking about the ideas of the Constitution belonging to the people, then how is that any different than the ideas of the blockchain and cryptosphere belonging to the people?
That's the beauty of ConstitutionDAO, it is quite literally proving that we have new ways in organizing and collectivizing. As a signal of that they are buying the constitution so that the people can take back what is rightfully ours. It gives people the freedom to try and solve new and complex problems in new ways.
Memes are the rallying cry of Gen-Z. DAOs are just a tool for organizing. The crypto community may not be ones to rally for Madagascar and I'm not expecting them to! But, DAOs give YOU the power to try and rally the people so we can do something. Rather than trusting you to manage the funds, the collective can trust the smart contract and vote on how they want to approach solving the problem, which professionals they want to delegate to to solve the problem and so forth.
This is so much more than trying pump shitcoins or ponzischeme. This is about allowing societies to collectivize in ways they never have before. You and your neighbors want to start a solar coop? DAO. A neighborhood is lacking the funds to support the local schools? DAO. The county wants to try and build a water treatment plant because they can't get funding from the Fed/State for clean water treatment? DAO.
DAOs will exist in all shapes and sizes and for different causes. Some will fail and some will succeed, but that's how innovation goes. While the technicals behind how these things will develop is still up in the air, this is the Netscape moment for crypto and nobody on Hackernews can come up with any other sort of justification for it not working other than it's a Ponzi Scheme.
None, but those are just a few I had the imagination to come up with. If you fail to see the value, you will at some point. As Jeff Bezos has been quoted saying, "Your margin is my opportunity." and opportunity right now is ripe.
I understand you are committed to this but you should understand that the adults in the room don't take any of it seriously. Jeff Bezos started a book store which he diligently grew to a eCommerce juggernaut. He did not start a project to buy what was rightfully his as a citizen of the United States. I'll repeat what I said previously, if you want people to take crypto seriously then the crypto community will have to start doing serious things instead of just having fun and shilling memes to buy a piece of paper at a Sotheby's auction.
Your generation is going to be faced with unimaginable hardships and the faster you folks grow up the faster you can start working on addressing real problems instead of wasting time on stuff like this.
The adults in the room don't take it seriously because they're blind to future advances. They think the current system can be upgraded and patched, but at present, that is impossible. It is fundamentally broken. The younger generation is already faced with unimaginable hardships and because of that has a tendency to be extremely dynamic and adaptive. They see the true problem as a coordination problem and crypto opens a new door with unexplored possibilities for coordination.
Crypto and thought schools adjacent to it combine elements of Libertarianism and Socialism in ways that were unable to exist before their advent. These typically contradictory ideologies can be combined in a new way that help us overcome these systemic coordination problems and let us execute collective action faster. Find me another cause that has raised 40 million dollars in less than a week where funds are held in escrow by a computer contract.
To expand on that the field I work in is communication by nature and I'm literally planning on pitching a project to a startup DAO this evening. This project may quite well open the door for people in my field to jump start a new way of funding projects which makes sure that Consumers, project contributors and everyone involved are compensated in a fair way while also not requiring a private investor. This literally would have been impossible without a DAO.
If the pitch goes well and the project is successful it would allow me to undercut all of my potential competitors. As people who enjoy a free market might say "That's just business baby". Then on top of that, because of the nature of how it's structured, nobody is exploited and no rent is extracted from a private party.
Good point about combining markets and social aspects but that is possible without DAOs as well. You're confusing the hype with the actual underlying technology and blockchains are not necessary to have any of what you described.
Good luck with your pitch. Sounds like a cool project.
Thanks. If you're willing to expand on your thoughts about blockchains not being necessary to any of the things I described, I would like to hear it. I'm honestly looking for any reason to be wrong on this, and I have yet to find that reason.
How else could ConstitutionDAO have raised funds as quickly as they have and in a secure manor without an intermediary company/legal entity holding the pooled funds?
How is ConstitutionDAO not a legal entity? It seems like once people bought into the DAO they could not reclaim their funds so it was essentially acting as a trusted escrow service. Since they were acting as a de facto escrow service this could have been accomplished with existing financial services. Most escrow companies don't care why they're holding the money and the issue would have been convincing them that this is a reasonable thing to do. But convincing an escrow company that what you're doing is sensible in this case is a feature and not a bug because they would have immediately pointed out the obvious issues with this scheme.
In fact, going through an escrow service would have kept the amount hidden and given them an edge in actually being able to win the auction but this wasn't their goal. They wanted to show that they could hype this up and get people to sign up for it. I doubt they were ever serious about actually placing the winning bid which goes back to my original point about the crypto community not being serious about anything other than hype. I understand they're trying to grow the network of people that participate in the crypto community but shenanigans like this prove my point about them not being serious.
ConstitutionDAO exists as a smart contract on Ethereum, not a legal entity. Funds pooled in that contract are spent at the discretion of users in the DAO, by contributing to the DAO you agree to the multisig stipulation (this could vary depending on the DAO).
Because the constitution and ownership of the constitution is managed in the current legal and financial world (centralized), the DAO has to bridge out of the decentralized network to purchase it. Since no decentralized system exists in the current legal infrastructure they had to incorporate in Wyoming to make the purchase. (I don't think they would have been required to do this if Sothebys had an Ethereum Wallet)
If the DAO had won the bid and kept the constitution and managed it, nobody from the centralized world would be able to purchase the Constitution without the permission of the DAO and it's 17 thousand users (aka a buyer coming into decentralized territory). This is the purpose of the purchase, it is purely symbolic. The metaphorical possession of the DAO sets the precedent that blockchains can set a new standard for building Governance systems. What better way to demonstrate the growth of innovative governance bodies than buying the foundational document of modern day governance itself?
Moreover, it may be wrapped up in humorous memes and shitposts, but the sentiment is the same. That being the blockchain is a contender for overthrowing all current financial systems, and by proxy Governance as well. This is the whole idea behind the metaverse. Emergent and collaborative digital cities that are representative of real world communities working together to solve real problems like climate change, world hunger, poverty, education and every other problem you could think of. It breaks the shackles of the masters inside corporations and the masters inside the government.
Also, after losing the bid, do you think it is a coincidence that one of the men who stands to lose the most from the success of cryptocurrency was the person who won the auction?
-note, this is probably my last comment for this thread. I appreciate the friendly debate. I always like chatting with those who hold opposing views. I will definitely be pondering points you've brought up and do more reading.
> We intend to put The Constitution in the hands of The People.
Like the US Archives aren't owned by the government of the people. Instead this will be owned by a very few ETH holders willing to participate.
But this might be one of the biggest fundraisers I've seen and it probably wouldn't have happened without the crypto ecosystem. For that, I am very excited.