Why ConstitutionDAO Failed At Sotheby’s

In November 2021, a crypto collective known as ConstitutionDAO raised $47 million to buy an exceptionally rare copy of the US constitution at Sotheby's auction. But its ambitious plan fell through.

ConstitutionDAO was the culmination of the plan to return a highly prized artifact, such as the 1787 limited edition copy of the US Constitution, to the people after many years of being in private possession.

The rare historic document that was signed in 1787 in Philadelphia is one of the eleven original copies that are known to have survived, and one of the two in private hands. Its A1 condition caught the fascination of millions across the world.

To realize its lofty ambition of governing the founding document as a Decentralised Autonomous Organisation(DAO),17,000 crypto donors flocked to Constitution DAO’s banner in a stretch of six days, bringing about a watershed in the crypto industry.

However, in a last-minute bid, Ken Griffin, the American billionaire founder of Citadel, paid $43.2 million for the constitution, defeating the crypto group and setting a new auction record of the private ownership of rare historical documents in the US.

From WAGBTC To The Sotheby’s Auction

Prior to the auction, Constitution DAO was riding on the publicity it had gained from its crowdfunding success on the popular Ethereum fundraising platform, JuiceBox.

The world held its breath, and for the first time, the search for the word “DAO” surges dramatically on Google, with many marveling at the potential of blockchain technology to mobilize human and material resources.

On the last day of the crowdfunding, the Constitution DAO’s treasury had surged from $0 to a whopping $47 million making it the highest-funded DAO on JuiceBox and the largest crypto-based community on the internet.

Its famous slogan, “#WAGTBC” which translates to ‘We Are Going To Buy The Constitution”, trended on Twitter and gave it more publicity within and outside the crypto community.

The Failure Of ConstitutionDAO

When the gavel finally dropped at Sotheby’s auction on a Thursday night in 2021, ConstitutionDAO’s 17,000 backers were caught off guard by the announcement that the billionaire hedge fund investor Ken Griffin had won the constitution.

Twenty minutes earlier, a tweet celebrating ConstitutionDAO’s win went viral, with CoinDesk erroneously reporting it. But as soon as the air was cleared, the official Tweet announcing the failure of the group was posted, and what soon followed was the chaos that tore it apart and from which it never recovered.

Today, many critics believe that the failure of ConstitutionDAO resulted from the haste with which it made full disclosure of the maximum bid prior to the last minute of the highly publicized auction. In other words, ConstitutionDAO failed simply and squarely because it failed to keep its max bid under wraps, a flaw that wholly pointed to a failure of strategy on its part.