CORRECTION (Nov. 19, 01:22 UTC): Corrects story to reflect that ConstitutionDAO was outbid for the document and did not win as earlier reported.
NEW YORK — A slapdash alliance of crypto fans was outbid for the U.S. Constitution in dramatic fashion.
The group known as ConstitutionDAO was outbid by an unknown buyer who submitted a $43.17 million bid at Sotheby’s auction house on Thursday evening. When the gavel banged, a first edition copy of the Constitution, one of only 13 in existence, was in new hands.
ConstitutionDAO had captivated mainstream attention as perhaps the best example of a crypto community flexing its real-world buying power.
The DAO, or decentralized autonomous organization, or perhaps more accurately, an 18,800-person Discord channel, had crowdfunded over $40 million in under a week from over 17,000 Ethereum wallets.
Ultimately, it was not enough to seal the deal.
DAOs, groups of people on the internet using various tools to exercise governance decisions in a variety of areas, have banded together before to score auction-block wins. But their trophies usually take the form of crypto, such as non-fungible tokens (NFTs), whose ownership can be governed by smart contracts. A Beeple collection commanded a stunning $69 million at a Christie’s auction in March, supercharging the mainstreaming of NFTs in the U.S. and beyond.
Despite the loss, ConstitutionDAO’s $47 million crowdsourced raise may be a similar signal for online investment collectives. The group suggested it couldn’t top the winning bid of $43.17 million because it didn’t have enough funds for the continued maintenance of the document.
“I think this is a clear harbinger of the beginning for DAOs,” FTX.US President Brett Harrison told CoinDesk. “Up to now there has been many DAOs that have popped up around NFT communities around different kinds of DeFi projects,” but never for real-world assets.
Harrison’s crypto exchange helped ConstitutionDAO convert the crypto to cash held in an account managed by Endaoment, a non-profit that represented the group at auction.
Unlike the auction house’s Bored Ape Yacht Club sale in September, Sotheby’s will not be accepting cryptocurrency as a form of payment for the winning bid. Crypto exchange FTX has converted the DAOs ETH into cash for the bid, a deal finalized hours before the winning bid was placed.
If anything, ConstitutionDAO has fueled a mass of mainstream interest in DAOs in the press.
By Thursday, the New York Times, Wall Street Journal, BBC and other widely recognized brands found themselves explaining the nuances of DAOism. Searches for DAO hit an all-time peak on Google Analytics as the sale neared.
“I think seeing how powerful a DAO can become in a real-world transactions such as this, I think will show people that there’s a lot of potential that people have only dreamed of for these kinds of organizations to be a model for future governance,” said FTX’s Harrison.
The Constitution bidding capped an historic night for crypto at Sotheby’s. Earlier, two works by street artist Banksy captured millions of dollars in ETH in the auction house’s first crypto sales.
UPDATE (Nov. 19, 1:41 UTC): Adds ConstitutionDAO’s stated reasoning for not continuing to bid.
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