Cryptocurrency

What are DAO’s and how did one raise more than $40 Million in a week to bid for the US Constitution?

If you have been in crypto for a while now, you might be familiar with DAO’s. Ideated and first formed in 2016, DAO’s have now become an integral part of Crypto DNA. One such DAO went on to bid for a copy of the Constitution in a Sotheby’s auction recently, and so, let’s explore these organisations in much more detail.

What is a DAO?

DAO is the short form of Decentralised Autonomous Organisations. Often referred to as an “Internet community with a bank account,” DAO’s have governance distributed and rules enforced on the blockchain using smart contracts, making it extremely transparent to all the members of the organisation. These groups, unlike regular organisations, do not have traditional hierarchical structures and centralised leaderships.

The first-ever DAO, named ‘The DAO’, started off in 2016 when a group of Ethereum community members intended to join forces to create an investor directed venture fund. The community wallet of the DAO was then hacked due to smart contract vulnerabilities, with the hacker taking off with 3.6 Million ETH. Ethereum was subsequently rolled back to before the hack to prevent this and was also the cause of separation between Ethereum and Ethereum Classic.

What are some types of DAO’s?

DAO’s come in any shape or form and could be formed around anything. That’s what makes them so interesting and unique in that anyone could start a DAO if they believe in achieving a goal or have shared interests. In the age of web 3.0, DAO’s have catapulted in authenticity and reputation as they allow interaction between individuals who might not know each other but trust the power of smart contracts and decisions by the community.

There are no estimate on how many DAO’s are active in the crypto space, simply due to the the fact that anyone can start a DAO and most decentralised communities aspire towards it. Many DeFi protocols are also governed by DAO’s where the community puts up proposals and votes for or against something. Here are some noteworthy DAO’s that have been innovating the structures and have raised attention in the crypto community:

Maker DAO: Maker DAO is a protocol owned DAO that is a DeFi powerhouse. It is the protocol behind the stablecoin DAI (Click here if you missed the article about stablecoins). The DAO gives MKR (the native token) holders the responsibility of adjusting policies, choosing collateral, improving governance, and much more.

PleasrDaoPleaser DAO prides itself as a collective of DeFi leaders, NFT collectors and artists who acquire culturally significant pieces with a charitable twist. The DAO initially started with a group of random individuals that collectively bought a Uniswap NFT, an artwork considered a quintessential piece of DeFi history. Since then, these group of individuals have purchased historical works like the Wu-Tang Clan’s unreleased album for $4 Million, Edward Snowden’s first NFT for $5.4 Million, and much more.

Friends with BenefitsFWB is an experimental Social DAO that was created late last year. It is a cultural membership that requires a member application and purchase of the native tokens to access the entire FWB ecosystem that includes Learning & Education, lifestyle, NFT’s + trading alpha, events, and governance. The DAO recently raised 10 Million at a fundraise led by a16z.

Metacartel Ventures: Metacartel Venture is a VC type DAO created to make investments and fund early-stage Decentralised Applications. The members of the DAO source conduct research and propose investments that would be voted upon by the DAO.

Constitution DAO — The DAO behind the bid

Sotheby’s, a well-known auction house worldwide, announced two months ago that it would be auctioning off a copy of the US Constitution. There are only very few iterations of the Constitution. Out of 500 issued copies, only 13 have lasted the test of time. Additionally, reports suggest that only two copies are privately held, with the rest stored in institutions — making it even rarer.

Many interested buyers were looking to get this rare piece of history, including some members of the crypto community. What had started as a goal among friends soon became a DAO for those equally interested in acquiring a copy of the Constitution.

Soon, a fundraising event was created on Juicebox, a platform known for raising funds on Ethereum. The plan was to issue governance tokens to the contributed individuals that could dictate the location at which the copy should be stored, how it should be displayed and much more — but most importantly, it does not offer fractional ownership over the copy.

People caught on to the DAO after many well-known individuals started contributing to the cause. A staggering 40 million dollars was raised within a couple of days, which broke the record for the most raised in less than 72 hours.

 

There were a total of 17,434 doners in this DAO, with a median donation size of $206.26. According to the team, a significant portion of funds came from wallets that were initialised for the first time. Unfortunately, the DAO fell short and got outbid on the auction day, with the piece eventually selling for $43.2 Million.

Although it was anticlimactic and not what everyone in the crypto community had hoped for, it is remarkable to see the success of this particular DAO. Raising 40 over million dollars in less than a week is no easy feat. Whether you agree or not, history was made regardless, and DAO’s will continue to achieve much more in the future.

BitYard

BitYard, founded in late 2019 and headquartered in Singapore, is the world’s leading cryptocurrency derivative exchange. As one of the fastest-growing exchanges, BitYard has continuously improved its platform to bring BitYard users many advanced trading services. With the current company slogan "Grow Your Future in the Yard", BitYard is fully committed to helping global traders to invest in their own future through its one-stop financial trading services.

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