Hey! This is a quick take on a big thing that happened tonight. I will have a regular full essay in the coming days, but wanted to send you this while it’s fresh!
—Nathan
ConstitutionDAO was all I could think about this week. If you haven’t heard about it, it’s a crowdfund to buy a copy of the US Constitution that was auctioned off today.
For some reason, I cared a lot about this. I’m working on a bigger post about my journey falling down the web3 rabbit hole, but needless to say I joined the DAO because I thought it could be an awesome symbolic gesture to use a new generation of distributed governance technology to acquire and lovingly preserve the source code that runs the current generation.
Unfortunately, we lost. Despite raising over $40m from over 10k individuals, the winning bid was just outside our grasp.
Here are a few observations I had watching it all play out:
- While you’ll hear a lot of pontificating about what this means for the future of DAOs, web3, and cryptocurrencies, I wouldn’t update too much on either the success or failure of ConstitutionDAO. Of course it would have been fun for the gang to squeak it out in the end, but the larger point is the DAO came together and participated in the system at an unprecedented level of scale. Win or loss, this is a pattern that is here to stay and will only get bigger, I think.
- There was a bit of a chaotic “Dewey Defeats Truman” moment immediately after the auction ended. Nobody knew who won, and there was a lot of misinformation spreading. All you need is one confused or malicious person to prematurely declare victory, and many orders of magnitude more will pick it up and spread it. Nature abhors a vacuum, and apparently so does Twitter. It’s a matter of basic decency, like not crowding in front of the door of an elevator, to not amplify information in these situations unless it comes from a trusted, primary source.
- Past a certain scale, realtime chats around live events are worse than useless. Discord should build async rooms with algorithmic feeds.
- ConstitutionDAO could have won. There were thousands of people watching in real-time and I bet a large percentage of them would have chipped in more funds if necessary. But this was not technically possible. Sotheby’s required the DAO to convert their ETH to USD by 6am the day of the auction, according to posts in their Discord. I don’t know the full logistics of why Sotheby’s wants this, but I would guess it has to do with verifying funds available for bidding? Anyway if there were a way for members of the DAO to increase their treasury in real-time, I think they probably could have won.
- This raises an interesting thought: what does price elasticity look like in an auction with warring clans? It was honestly thrilling to watch the bidding process play out, and I shudder to consider how much I might have chipped in had there been a shiny CTA button on the screen, social status at stake, etc. Now multiply that by thousands of people. I feel like prices could get really weird, likely to the detriment of many members. Of course rich people have suffered buyer’s remorse after an ego-driven auction for centuries, but the violin for those tears is pretty small. It could be different when we hear about people dumping their life savings. On the other hand, the artists/sellers will make bank, so ¯\_(ツ)_/¯
- I was watching the livestream on a plane, and when the auction ended I wondered if anyone would clap. It felt like my entire world on Twitter was watching. Then I realized the livestream had less than ten thousand people watching. Subjectivity is funny!
- This feels kind of like the early moments of SpaceX when their rockets couldn’t quite stick the landing. It sucks in the moment, but it is a necessary and valuable experience. Failure is progress. It all depends on what happens next.