The Breakdown - This DAO Is Trying to Buy the Constitution for $20M

Starting point is 00:00:00 Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. The breakdown is sponsored by Nidig and produced and distributed by CoinDesk. What's going on, guys? It is Monday, November 15th, and today we are talking about one of the crazier, more fascinating, more compelling stories that I've seen in some time. A Dow is trying to buy the U.S. Constitution. I started paying attention to this over the weekend when I saw a tweet from Zero X Planet that said, I've been talking about BTC all morning, not Bitcoin, buying the Constitution. So what the hell are they talking about? Well, this is one of the more ambitious things I've

Starting point is 00:00:53 seen in some time, but before we talk about Constitution Dow specifically, I want to look at some precedent. Dow's are decentralized autonomous organizations. It's a term that you've probably heard me talk about before. A couple of weeks ago, a featured an essay about the legal ramifications for Dow's on Longreed Sunday. Dows represent online collectives, people getting together to do things. And there are people who are looking to do Dows for all types of things. But if the history of crypto shows us anything, it is that while there may be a million big different use cases, things usually hit their stride when they're about the better coordination of money. Certainly, when it comes to all of the experimental

Starting point is 00:01:35 DAOs out there right now, that is the fundamental driving use case so far. Now, for me, I've always thought that Taos were some type of inevitable. It's just seemed insane to me that the only options for human organization would remain, on the one

Starting point is 00:01:51 hand, legal structures that had existed for tens, if not hundreds of years, and on the other hand, super informal things like Facebook groups or GoFundMe pages. It just seemed like there had to be something that lived in that middle space, and that enabled strangers in particular to come together. It simply wouldn't make sense for the internet era's organizing structures to be constrained by the analog

Starting point is 00:02:15 era's legal modalities. Now, if you listen to that particular Long Read Sunday I was just mentioning, there are some really interesting questions of how Taos fit in legally, and there will be a lot of battles around that in the years to come. Some states like Wyoming have tried to figure and carve that out, but there's going to be a lot more to debate and to experiment with on that front. Still, Net Net, I would be shocked if at the very least, internet collectives focused on making shared purchases and distributing the value from them aren't a bigger and bigger part of our landscape going forward. Now, if you've been watching Dow's over the course of the last year or so,

Starting point is 00:02:51 many of them that have been the most active have coincided with the rise of digital art and the metaverse. You're seeing digital art collectives that sprout up and effectively act like a new, type of NFT venture fund or hedge fund. And it makes a ton of sense, right, to pool resources around these new digital assets. Pooling financial resources makes available even bigger purchases. It also creates more of a basis to debate investment thesis. If you're interested in NFTs but not sure about what people think will hold their value over the long run, well, maybe you want to go in with a Dow who has a track record or at least a brand as understanding that space more deeply than

Starting point is 00:03:29 you do yet. What's more, that collectivity also creates more power to shape the narrative of markets than does individual buyers. Certainly, we're seeing influence in certain NFT buyers that transcends what an average investor would represent, but still, being a part of a collective that can actually be a taste maker could be something that's different and differentiatedly valuable. But, interestingly, Dow's are not just staying in the digital world. They are not constrained to the Metaverse, and where they have interacted with the real world has been really interesting. I did an episode a couple of weeks ago about how Pleaser Dow bought the single copy of the Wu-Tang album Once Upon a Time in Shaolin from the U.S. government.

Starting point is 00:04:14 Now, this is kind of a fascinating story. The Wu-Tang Clan produced this album over a couple of years and then released it in this auction-y way explicitly to ask questions about the current commoditization of music that came from the internet and streaming. instead preferring a distribution method that harkened back to the patronage of the Renaissance. Now, unfortunately, for just about everyone, the person that won the auction for once upon a time in Shaolin was reviled Farma Bro Martin Shikrelli. And by the way, guys, I still have no idea if I'm pronouncing his name right, but I don't really care. In any case, when he was convicted by the U.S.

Starting point is 00:04:48 government for all the things that he was convicted of, he was forced to surrender that asset as a way to pay back part of his debts. And so the U.S. government has just been holding it. on to this single copy of the Wu-Tang album for the last couple years. Well, in July, Pleaserdow figured out a way to work with the Department of Justice to actually buy that album for $4 million, and although the purchase happened over the summer, the announcement was just made this fall. Now, those guys are still figuring out exactly how they're going to share this creation with the world, given that part of the terms of the contract of this album is that there's an 88-year ban on commercialization. So that'll be really interesting.

Starting point is 00:05:27 to watch, but I think that the point is that when Pleaser Dow went out and bought an album for $4 million, an album of historic and creative significance, for $4 million from the U.S. government, they sort of changed the Overton window on what Daos could do, and I think this new Constitution Dow is an example of what follows. So to the Constitution Dow, and specifically the opportunity that it was created to capture. On Thursday of this week, November 18th, at 6.30 p.m. time, a document is going up for auction via Sutherbees that was created on September 16, 1787. The Constitutional Convention that was held in the late 1780s was designed to strengthen the government that had been born with the Declaration of Independence a decade earlier, and their main

Starting point is 00:06:15 mechanism for doing so was to codify a new set of rules and organizing principles that became the Constitution. At that time, 500 copies of the original edition of the Constitution were printed. This was the first appearance in print of the final text of the Constitution. These 500 or so copies were for use by the delegates, to be shared back with members of Congress and the states that they represented who needed to ratify this document, a document that now represents the longest working charter of any government in the world. Of those 500 or so copies of the original edition of the Constitution, only 13 are known to survive and only two remain in private collections. Although there is some confusion about this with other sources saying only 11, and this being

Starting point is 00:07:00 the only one in private hands, in either case, it's an extraordinarily rare document that's even more rare in terms of the fact that it's in a private collection. This is its first time on sale in 33 years. The document itself is six pages long, four of which are the Constitution, one is the delegates who voted for it, and one of which is Washington's letters to the states for consideration and ratification. It was set to type by the same person, John Dunlap, who printed the original Declaration of Independence. And I think the thing and the reason that I'm going on a little bit about this actual document itself and its historical significance is that it's not just like it was a souvenir printing or something. This specific document was a primary document that was being

Starting point is 00:07:42 sent to the delegates to Congress for consideration and ratification. This very document might have been intended for someone like James Madison, Alexander Hamilton. And the way that Sotheby's puts it is that without this printing, we wouldn't have had a nation. So it's a unique and phenomenal piece of American history that is now up for sale. NIDIG, the sponsor of this podcast, provides banks, corporate treasuries, pensions, and hedge funds with ironclad Bitcoin custody and white-gloved service. Learn more at NIDIG.com slash NLW. That's NYDIG.com.com. So let's then go read about the Constitution Dow. This thing is days old. Their first tweet was only on Thursday, for example. And their website, ConstitutionDow.com, says, what if we held hands and bought the Constitution together? It has a running tally of the money raised so far, and it also has frequently asked questions. From the FAQ, what is your plan? Immediately to preserve and protect the Constitution. We intend to find a safe home for it, such as the Smithsonian. The Constitution Dow will govern future decisions around destination, preservation, as well as plans for purchasing other historical artifacts.

Starting point is 00:09:03 Why is it a Dow? In short, so the people own it together. Decentralization and cryptocurrency Web 3 have created structures that allow people to self-governed with unparalleled levels of autonomy and freedom. It's fitting that we use this technology to honor and protect the greatest historical tool for human governance, the U.S. Constitution. Why the Constitution? We believe the U.S. Constitution is a shared good and should be shared and displayed in public spaces by the people whose governance and freedom it was created to protect. By purchasing it with a Dow, we distribute the responsibility among many and provide the infrastructure to keep the Constitution preserved. There's more on this theme from their discord from Graham Novak, who's one of the organizers. He writes, for the first time in 33 years, one of 11 surviving copies of the official edition

Starting point is 00:09:47 from the Constitutional Convention will be publicly auctioned by Sotheby's. It is the only copy that is still owned by private collectors. We intend to put the Constitution in the hands of the people. The purchase of the Constitution by a decentralized organization represents the evolution of one dominant governance structure to another. Almost 250 years after its inception, we see this as a symbolic passing of a torch, a mark of a new era. The Constitution defined the most resilient, robust, and durable social contract known to humans. But the changing of the gardeners, as we wade into the unknowns of decentralized governance. In the ethos and spirit of Web 3, we intend to purchase the Constitution, and find a home for it among the world's finest artifacts to be preserved and enjoyed

Starting point is 00:10:27 by all. We the people plan to preserve the document for the people. The ownership, of course, will reside within the Dow. We'll fractionalize NFTI and memeify in the way that we do. Longer term, our vision includes the continuous purchase and preservation of meaningful real-world items, beginning with the Constitution, placing ourselves at the crossroads of the Smithsonian of the physical world and the archives of the... of the digital world. We fundamentally believe that many one-of-a-kind works are meant to be shared and enjoyed by all. Now, as I said, in terms of the DAO itself, this is coming together incredibly quickly. As I mentioned, their first tweet was Thursday, November 11th. What's more, Tim Copeland

Starting point is 00:11:02 at the block, points out, currently, Constitution Dow is not technically a DAO, since there are no tokens binding everyone together or enabling them to control the future direction of the project, but that's where it's headed. End quote. Now, one of the contributors is Will Papper of Syndicate Dow, which disclosure I'm an investor in, and which the is basically a protocol for building investing DAOs, and it seems like they're on the path of helping the DAO itself organize, but it's going so fast. Now, what about the logistics of this from a buying side? Well, according to one of the organizers on the Discord, they've been in touch with Sotheby's. Quote, Sotheby's is excited about the chance to work with us to create a

Starting point is 00:11:36 new story tied to this incredible historic artifact. Remember, this has literally never been done before, and certainly not in seven days, and this will be the largest group purchase of the most expensive item in history. It will also be a story of the best of what Web3 represents and an opportunity to show the world what these technologies enable. And quote. And there are a ton of logistics around the actual purchase itself. They have to figure out the KYC of actually being able to place a bid. They're exploring both incorporating as an LLC as well as having a museum bid on their behalf. They had a major hurdle with Sotheby's around proof of funds and just found out that Sotheby's will be accepting their ETH balance as a proof of funds, which is its own type of,

Starting point is 00:12:15 of innovative first in its own right. On top of all that, there's payment conversion, post-bid custody, et cetera, et cetera, et cetera. So what does Twitter think of this? Well, there's a lot of Nicholas Cage memes going around, and there's a strong sense of joy at, if nothing else, the ambition of this. Tim Copeland, whose article I mentioned writes, this is insanely ambitious in such a short period of time, but the momentum they have suggests that they might have a shot. If they succeed, this will be huge. One critique came from Austin Robey, who's the head of Head of Growth of Unlock Protocol. He writes a Dow buying a copy of the Constitution is a fun meme, but maybe tens of millions of dollars could be better utilized by supporting people's real struggles,

Starting point is 00:12:54 economic racial justice, or WAGBTC. Editor's note, which stands for we're all going to buy the Constitution. Rijiboniyah responded to that and said a powerful opportunity for introspection. The best part, they're not mutually exclusive. WA.GBTC will spread the meme of Dow's a bit further, leading to more audacious goals and funding more causes. Similar effects as the space program or the four-minute mile, updates our model of what's possible. Now, I tend to not think that one-to-one money should be spent on this or that comparisons end up being all that useful. The reality is every dollar or unit of value in the world has a band of things that the people who possess that unit of currency might want to spend it on, and those things aren't necessarily fungible. They're

Starting point is 00:13:37 not all the same as one another. But I think that this follow-up point about the shifting of the Overton window is hugely significant. People's sense of the possible is shaped by what they've seen. I think it's fairly likely that without pleaser doubt buying the Wu-Tang album first, they might not even have thought to try this sort of ambitious constitution Tao. Indeed, Ivy Asterix builds on this saying in that same thread that I was referencing before, the cultural significance isn't about buying the constitution. It's about mobilizing in an immensely short time to accomplish something next to impossible. Activists, social enterprise, etc., should be taking notes. Now, there's another interesting connection that some are making.

Starting point is 00:14:15 Christy Pitts from Backstage Capital Live tweeted her attempt to join and participate, writing, Observations on two days of participating in Constitution Dow. This project is a lot of work. There are teams coordinating across several work streams, and everyone is working towards a hard deadline, the Sotheby's auction. There are also a ton of people involved, 4K or so in the Discord. Lots of opinions on different topics.

Starting point is 00:14:37 Some things I'm wondering about, what reward is there for those dedicating their time to make this happen? The work isn't over if we successfully win the bid. The Dow and its assets will require governance. How will those folks be compensated? How will the people tasked with making decisions for the Dow represent the group's interests? How do we avoid politics in fighting and dysfunction? In other words, pretty much the same topics as the OG Constitutional Convention. So where are things now?

Starting point is 00:15:02 Well, the Discord is popping off. There are 9,200 people in the server with more than 2,000. online. That's up about 50% or more since last night. What's more, they're now starting to accept public commitments. At the time of recording, they're at 760.759-Eath, or 3.485 million. That's up about 300k in the last hour as well. There is still, however, a pretty big mountain to climb. Sotheby's estimates that the document will fetch 15 to 20 million, and there's no guarantee that that will be enough. Pachy McCormick at Not Boring says that they have, quote, well over 10 million in soft commitments as well, so perhaps that number is closer to the 20 million mark that they're trying

Starting point is 00:15:43 to raise than it seems. Still, I think if you're trying to get a sense of the spirit of this project, the best thing to read are the comments that come along with the commitments. When people fund the Dow with their eth, they can share a message, and here's just a representative sample of some that I've seen. This is more than just JPEGs. Decentralizing the ownership of the U.S. Constitution is not only amazingly cool, it is also a very American thing to do. The Constitution is by the people, for the people, and now also owned by the people. This is the future we should strive for. First-generation immigrant, proud owner of the U.S. Constitution. My family came here fleeing persecution. God bless America. As the grandchild of Holocaust survivors, I feel a debt of gratitude to this

Starting point is 00:16:24 country in its founding document. May it be a beacon of freedom and equality for all to read and observe. We were once owned, now we are owners, a black man in America. There are also a lot of people saying that this is their first time in a Dow, and even for some, their first time touching crypto at all. I genuinely think this might be a seminal moment. There is too much that is too perfect about it, the symbolism of the document itself and the connection to the way it's being bought. The fact that there is meme power in Nicholas Cage. Everyone is, of course, referencing National Treasure, where Nicholas Cage steals the Declaration of Independence.

Starting point is 00:16:59 And as a side prediction, I would be shocked if Nick Cage hasn't gotten involved at least by tweeting at the project by Wednesday at the latest. Packy again at Not Boring Rights, the Constitution is the key foundational document on which the United States was founded. It's one whose importance every American, those born here and those who chose to come here, as well as hundreds of millions of democracy-loving non-Americans around the world, appreciates. Web3 is giving thousands of people the tools and opportunity to come together to own a piece of this historic document and add to its story by creating a new relationship with it through collective ownership. It will be a breakout story if it happens, and you can feel

Starting point is 00:17:33 the momentum building. It's being covered by fortune, fast company, vice, and it feels like it's just getting started. This will be the discussion at the dinner table on Thanksgiving if it happens. And if it's successful, I believe that it will be a before and after moment for Daos, where the world is divided into before the Constitution Dow and after the Constitution Dow, it will change everything that seems possible. But there's still a ton more to figure out, A lot more to raise, what the destiny of the thing is going to be, how the Dow is going to be governed, what set of decisions will actually be made. So the story isn't over yet.

Starting point is 00:18:09 But that's the cool thing. Go check it out if you're interested, constitutiondow.com, Constitution Dow on Twitter. Read Paki McCormick's Not Boring newsletter to get an overview of the project. Go join the Discord. It's all there on the website. I am personally super excited to see how this plays out and thrilled that people are taking on this challenge. I will keep you guys posted about the fundraising total, more news. I'm sure it's going to evolve rapidly every day this week until Thursday when the auction happens.

Starting point is 00:18:37 So until tomorrow, guys, be safe and take care of each other. Peace.

The Breakdown - This DAO Is Trying to Buy the Constitution for $20M

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