DAOs in the Art World: From the U.S. Constitution to NFTs

By Laura Dowdy

Overview

A decentralized autonomous organization (DAO) refers to a group of people who come together without a central leader or company dictating any of the decisions. They are built on a blockchain using smart contracts. One of the most noteworthy early DAOs was the ConstitutionDAO. This DAO was formed in November 2021 with the singular purpose of generating enough money (in the form of payment tokens cryptocurrency) to purchase, at auction, one of the 13 known-to-exist original, physical copies of the United States Constitution.^[1] Although ConstitutionDAO raised roughly $47 million in Ethereum in roughly a week, the DAO was outbid by hedge fund CEO, Kenneth Griffin, at an auction hosted by Soetheby’s for a winning bid of $43.2 million, according to CNBC.^[2] The seller was New York–based philanthropist Dorothy Tapper Goldman, who inherited the copy in 1997 from her late husband, Harry Goldman^[3]. Because the ConstitutionDAO did not secure the bid at auction, investing members of the DAO are still entitled, if they have yet to manually request a refund, to get a refund of their investment, minus “gas” fees, which the blockchain server, Ethereum charges for each transaction^[4]. Alternatively, those seeking refunds can opt to receive $People tokens, transferred immediately to their digital wallets.

The ConstitutionDAO was an early riser in the dawn of digital art-collecting communities. Since that record-breaking Sotheby’s auction in 2021, DAOs have continued to take ground in the art market.