Crypto group loses bid to buy US Constitution copy(theblockcrypto.com)
theblockcrypto.com
Crypto group loses bid to buy US Constitution copy
https://www.theblockcrypto.com/linked/124872/crypto-group-loses-bid-to-buy-rare-us-constitution-copy-in-record-breaking-sothebys-auction
114 comments
This is an uncharitable take, and I think you’re on the wrong side of this if you think it won’t work in the future. This team raised $45M from 10k internet strangers in a week, and they almost managed to win the bid. They created a path for bidding with crypto at Sotheby’s, and came up with a legal structure so they could do it with money raised via a DAO. They newly exposed hundreds of thousands of people to the possibilities of crypto beyond BTC.
Sure, it failed, and it sucks that everyone loses a lot of gas fees. But these guys did a lot to lay tracks for the next attempt. I bet with more time to plan they would’ve pulled it off.
I think Spacex’s early failed landing attempts are a good analogy - lots of time and money spent, but lots of learning to improve the next ones.
Sure, it failed, and it sucks that everyone loses a lot of gas fees. But these guys did a lot to lay tracks for the next attempt. I bet with more time to plan they would’ve pulled it off.
I think Spacex’s early failed landing attempts are a good analogy - lots of time and money spent, but lots of learning to improve the next ones.
And you don't see any problem with a legal structure that gives everything to the project's creators and nothing to those 10k internet strangers? Why should we want this kind of thing to be successful?
I know, the answer is "but crypto is just intrinsically amazing and we'll sort out these little legal deficiencies later, hopefully when we're rich enough to buy out all the politicians."
I know, the answer is "but crypto is just intrinsically amazing and we'll sort out these little legal deficiencies later, hopefully when we're rich enough to buy out all the politicians."
I get the impression you're not open to being curious about this, but I don't agree with your framing.
You can have the DAO as a legal structure where the granted governance tokens do have power, in that case the 10k internet strangers do have a say in what happens.
I'm not saying that was the case here (it happened quickly and I don't know), but it definitely seems likely we'll see stuff like this in the future and I think it's pretty cool.
You can have the DAO as a legal structure where the granted governance tokens do have power, in that case the 10k internet strangers do have a say in what happens.
I'm not saying that was the case here (it happened quickly and I don't know), but it definitely seems likely we'll see stuff like this in the future and I think it's pretty cool.
The plan was to form an LLC. Some states have created rulings specifically for LLCs to be driven by DAOs (I forget which states - Oregon maybe?).
I'm completely unsure how you structure legal ownership of an LLC vs crypto ownership of a DAO, but I do know that an LLC's bylaws can bind the officers to the decisions of a voting body, and that's what the DAO would do.
I'm completely unsure how you structure legal ownership of an LLC vs crypto ownership of a DAO, but I do know that an LLC's bylaws can bind the officers to the decisions of a voting body, and that's what the DAO would do.
> "DAO as a legal structure where the granted governance tokens do have power"
I.e. voting shares in a corporation.
And then you need to register your security offering and know who your investors are. You can't just take money into a Delaware corporation and let anonymous wallets vote on what the company does with its assets.
I understand that crypto enthusiasts want to blow up American securities laws. I don't understand why they think it's going to happen if they just persistently keep doing things which are either illegal or just scammy with no legal protections to those whose money is at stake.
I.e. voting shares in a corporation.
And then you need to register your security offering and know who your investors are. You can't just take money into a Delaware corporation and let anonymous wallets vote on what the company does with its assets.
I understand that crypto enthusiasts want to blow up American securities laws. I don't understand why they think it's going to happen if they just persistently keep doing things which are either illegal or just scammy with no legal protections to those whose money is at stake.
> You can't just take money into a Delaware corporation and let anonymous wallets vote on what the company does with its assets.
Anonymous holding companies would like to have a word with you.
> I understand that crypto enthusiasts want to blow up American securities laws. I don't understand why they think it's going to happen if they just persistently keep doing things which are either illegal or just scammy with no legal protections to those whose money is at stake.
I guess you must have also really hated Airbnb when it first came out? Or Uber and Lyft?
The web3 and crypto space is moving very quickly and you are right that regulatory bodies are struggling to keep up. What is welcome is that many people are now iterating and experimenting with these structures and some will fail miserably, while others might create completely new opportunities.
This is how innovation works.
Anonymous holding companies would like to have a word with you.
> I understand that crypto enthusiasts want to blow up American securities laws. I don't understand why they think it's going to happen if they just persistently keep doing things which are either illegal or just scammy with no legal protections to those whose money is at stake.
I guess you must have also really hated Airbnb when it first came out? Or Uber and Lyft?
The web3 and crypto space is moving very quickly and you are right that regulatory bodies are struggling to keep up. What is welcome is that many people are now iterating and experimenting with these structures and some will fail miserably, while others might create completely new opportunities.
This is how innovation works.
You're setting up a lot of strawmen: I don't think we should blow up securities laws or buy all the politicians. And this project was far from a scam or a pyramid scheme: the core members were known, had good reputations and stated their intentions around community governance.
Each person putting $ in should decide whether that's good enough for them. Totally fair. But I wouldn't wish for failure of the whole approach. We had a group of young ambitious people getting folks excited and organized, raising lots of money for collective action to achieve something. They raised > 2x as much as the biggest kickstarter ever.
The shift in the balance of power towards individuals is empowering. That empowerment can be used for good or bad, but on balance I'd rather live in a world where people are more empowered.
Each person putting $ in should decide whether that's good enough for them. Totally fair. But I wouldn't wish for failure of the whole approach. We had a group of young ambitious people getting folks excited and organized, raising lots of money for collective action to achieve something. They raised > 2x as much as the biggest kickstarter ever.
The shift in the balance of power towards individuals is empowering. That empowerment can be used for good or bad, but on balance I'd rather live in a world where people are more empowered.
Your smartphone buzzes. It's an alert asking you to send money for an IPO for hot new startup.
This stock gives you no actual claim to anything. The company doesn't even make a profit. Even when it did, it's unlikely to pay a dividend.
Now that the IPO has failed to launch, you're being refunded your money, but you lost a lot of time and effort evaluating the deal and the startup lost a lot on banker fees. The start up CEO even bragged about how many people interested were first time investors.
Whats your point in all this? Something people were enthusiastic about that didn't work out. Not everything always works out. Why do you care?
This stock gives you no actual claim to anything. The company doesn't even make a profit. Even when it did, it's unlikely to pay a dividend.
Now that the IPO has failed to launch, you're being refunded your money, but you lost a lot of time and effort evaluating the deal and the startup lost a lot on banker fees. The start up CEO even bragged about how many people interested were first time investors.
Whats your point in all this? Something people were enthusiastic about that didn't work out. Not everything always works out. Why do you care?
That's not how IPOs work today, but it is how IPOs and unlisted stock offerings worked in the 1920s (except for the smartphone part).
And it all came crashing down so bad that most Americans still can't invest in companies until after the IPO is concluded.
Is the point of crypto just to retrace the catastrophic steps leading up to post-Depression security laws?
And it all came crashing down so bad that most Americans still can't invest in companies until after the IPO is concluded.
Is the point of crypto just to retrace the catastrophic steps leading up to post-Depression security laws?
Didn't Rivian go public with exactly 0 revenue and is now the third most valuable car maker on the planet?
I don't think securities laws do what you think they do. I'd rather people wade into the unregulated world where its buyer beware than to get the stamp of approval by regulators. These people are basically crowd sourcing buying a cultural artifact and it didn't work out. Who was harmed?
[0] https://edition.cnn.com/2021/11/16/cars/rivian-value-tesla-t...
I don't think securities laws do what you think they do. I'd rather people wade into the unregulated world where its buyer beware than to get the stamp of approval by regulators. These people are basically crowd sourcing buying a cultural artifact and it didn't work out. Who was harmed?
[0] https://edition.cnn.com/2021/11/16/cars/rivian-value-tesla-t...
"Crowdsourcing buying a cultural artifact" is already a thing. It's called a private museum. They are in fact a quite popular type of non-profit. Billions of dollars are donated annually to private museums. They are run by dedicated professionals who understand the history that makes the collection relevant and the processes required to maintain it in good condition.
But no, all that competence goes out of the window when crypto-bro wakes up one day and comes up with the idea of buying a museum piece with donation money.
But no, all that competence goes out of the window when crypto-bro wakes up one day and comes up with the idea of buying a museum piece with donation money.
You’re right that the relationship between DAOs and corporate entities is a gray area in law right now. But imagine this went to court and the plaintiffs said that it quacked like a duck, so their assumption was for all intents and purposes it was a duck. What do you think the judge is going to say?
I’m not a lawyer and not aware of any precedent here, but I imagine if it’s a total gray area the judge would say they are entitled to the same rights as one might find being a member of a corporation since that was the shared belief system at the time.
I’m not a lawyer and not aware of any precedent here, but I imagine if it’s a total gray area the judge would say they are entitled to the same rights as one might find being a member of a corporation since that was the shared belief system at the time.
If there really was such a shared belief system, then this seems like a security offering by the Howey test definition, and the SEC would have sued the DAO eventually.
Also an open area of law! I think this has already happened, in fact.
And we taxed the planet a little bit as well.
That happens regardless of the number of ethereum transactions.
More gas fee -> more profit for miners -> more miners -> higher difficulty -> more energy used
And will end entirely in a few months.
Ethereum has been saying that for years. Isn't the current timeline end of 2022?
Also there are broader issues with crypto beyond its environmental impact and some issues with proof of stake specifically.
Also there are broader issues with crypto beyond its environmental impact and some issues with proof of stake specifically.
At least they acknowledge the problem and are trying to solve it.
EDIT: Holy smokes, it is absolutely exhausting to say anything even neutral about a cryptocurrency on Hacker News. I'm gonna take a break. I wanna get back to talking about all the other interesting things out there.
EDIT: Holy smokes, it is absolutely exhausting to say anything even neutral about a cryptocurrency on Hacker News. I'm gonna take a break. I wanna get back to talking about all the other interesting things out there.
They are trying to solve one of the problems, yes but there are broader issues with crypto beyond the large scale environmental issues. And even when Ethereum does switch to proof of stake, it seems likely that many of the people who run large scale mining farms will just move to a different chain that they can still dedicate their GPUs to.
> They are trying to solve one of the problems, yes
That was the only point I was trying to make. It's okay to agree with me, instead of carrying the goal posts off into the distance. :D
That was the only point I was trying to make. It's okay to agree with me, instead of carrying the goal posts off into the distance. :D
> it seems likely that many of the people who run large scale mining farms will just move to a different chain that they can still dedicate their GPUs to
Not likely. Other chains do not have the economic incentives to support these ex-Ethereum miners. Mostly it will just cease.
Not likely. Other chains do not have the economic incentives to support these ex-Ethereum miners. Mostly it will just cease.
"We created a problem...as a solution for an issue that didn't exist...and should now get brownie points for trying to solve it unsuccessfully for years"
What crypto friendly forums do you visit?
Didn't they want to end it already a few month ago?
And everyone will get a free unicorn!
Basically yes. If people on hn got their heads out of the sand they'd learn being in the space was pretty profitable because of all the incentives offered to users.
The complaining about ETH/BTC environmental cost is probably the lamest anti-crypto argument. It's just this beaten to death: https://slatestarcodex.com/2014/08/14/beware-isolated-demand...
With the coming proof-of-stake it won't even be true (at least for ETH).
With the coming proof-of-stake it won't even be true (at least for ETH).
I don't disagree with the pragmatic "moment in time" accounting and uncharitable view of this failed exercise that I am seeing reported (and in the comments).
What feels missed, however, in these critiques is the recognition of the pure, unadulterated "product market fit" that is being signaled by crypto, DAOs, etc.
Nearly 18,000 people, over a week, were hell bent on participating in this DAO and found a way to put up $$$.
Users struggled through broken ass alpha-release-level tools available to them to participate, forewent concerns about taxation, ownership, environment etc
Reacting with satisfaction about this failed outcome misses the opportunity to discuss and understand the pent-up demand and desire to rewrite the rules around ownership & sovereignty that critics dismiss as secondary to pyramiding / exit scamming / etc.
What feels missed, however, in these critiques is the recognition of the pure, unadulterated "product market fit" that is being signaled by crypto, DAOs, etc.
Nearly 18,000 people, over a week, were hell bent on participating in this DAO and found a way to put up $$$.
Users struggled through broken ass alpha-release-level tools available to them to participate, forewent concerns about taxation, ownership, environment etc
Reacting with satisfaction about this failed outcome misses the opportunity to discuss and understand the pent-up demand and desire to rewrite the rules around ownership & sovereignty that critics dismiss as secondary to pyramiding / exit scamming / etc.
100% agree with you.
Crypto is as much, if not more, a social movement than a pure technology solution at this stage. Whether or not the blockchain, tokens, DAOs, etc. are the "right" approach to things, the fact that there are millions of users and many who are coming up with ideas, building products, etc. is something that is hard to ignore.
I was in the Discord group for Constitution DAO and it was really interesting to observe how excited, hopeful, and positive about the future people were. I think the world needs that, especially post-COVID.
Crypto is as much, if not more, a social movement than a pure technology solution at this stage. Whether or not the blockchain, tokens, DAOs, etc. are the "right" approach to things, the fact that there are millions of users and many who are coming up with ideas, building products, etc. is something that is hard to ignore.
I was in the Discord group for Constitution DAO and it was really interesting to observe how excited, hopeful, and positive about the future people were. I think the world needs that, especially post-COVID.
> the fact that there are millions of users and many who are coming up with ideas, building products, etc. is something that is hard to ignore
I think most people's interest in crypto begins and ends at "you can get insane returns". It's gambling or FOMO for most people.
The excited builders are very more sparse (try to find anyone building on or even talking about Dfinity for evidence).
I'm not saying it'll never change, but right now there's no ecosystem for blockchain outside of NFTs and coins.
I think most people's interest in crypto begins and ends at "you can get insane returns". It's gambling or FOMO for most people.
The excited builders are very more sparse (try to find anyone building on or even talking about Dfinity for evidence).
I'm not saying it'll never change, but right now there's no ecosystem for blockchain outside of NFTs and coins.
Yes, I also agree with this. 98% of this is a mess, but when you get into some of these communities, DAOs, etc. there is a certain level of excitement that reminds me of the Internet in 2002.
I'm not entirely sure I agree with you. Just because something gives people purpose doesn't mean it's positive... You can be excited, hopeful and positive about something that provides very little value.
I don't think any of us can say whether any technology or product is inherently good, but if millions of people are using it, are happy doing so, and they say it's good for them, then that sounds pretty nice to me.
I've heard similar arguments about movies and video games in the past, and it's never that clear cut.
I've heard similar arguments about movies and video games in the past, and it's never that clear cut.
>Crypto is as much, if not more, a social movement than a pure technology solution at this stage.
you mean the HODL crowd that's constantly pumping alt-coins? there are huge communities around that; nothing in crypto seems to be about the technology as of late
you mean the HODL crowd that's constantly pumping alt-coins? there are huge communities around that; nothing in crypto seems to be about the technology as of late
QAnon also made millions of people excited, hopeful, and positive about the future. Any moment now, the truth would be revealed to all, the clouds would part and everyone's life would be changed forever.
Making people feel good on the short term is not a justification for anything. We need to focus on solving the real problems, not selling crypto opium to those who have lost hope.
Making people feel good on the short term is not a justification for anything. We need to focus on solving the real problems, not selling crypto opium to those who have lost hope.
With this sort of logic, should we get rid of movies that we deem unproductive? Burn books that don't explicitly contribute to the human race? Ban video games that promote values we disagree with?
There are entire industries designed to make people feel good and do nothing else.
If you're equating crypto with QAnon then I don't think there's much room for debate here.
There are entire industries designed to make people feel good and do nothing else.
If you're equating crypto with QAnon then I don't think there's much room for debate here.
Yeah, I'm totally advocating burning books because I think it's not a great idea to get your hopes up when you send money to some random guy's Delaware company that was started yesterday.
Crypto is not QAnon (although they do share general cultish traits). I was using Q as an extreme example of another online movement that also gave hope to people hanging out in forums.
Crypto is not QAnon (although they do share general cultish traits). I was using Q as an extreme example of another online movement that also gave hope to people hanging out in forums.
From my pro-crypto viewpoint, this was the outcome I hoped for. Raised a very credible amount of money from a large number of donors in a very short period of time, which shows the potential. And Sotheby's was willing to work with the group and confirmed their ETH address as proof of funds (you can't just show up and bid at the highest end auctions, you have to prove you can pay if you win). That's all very legitimizing.
And the concept of a DAO has gotten massive exposure, which is great.
But without the messy administration woes a win would have entailed, and which no doubt would have led to disagreements and bitterness.
And which, frankly, DAOs are not yet ready to handle. The frameworks just aren't there for it. DAOs are fine for experimental use with cryptofolk who are used to the chaos, but it's not time for the normies yet. It's too early for a particularly adhoc dao to deal with the masses.
As long as the funds are returned promptly, this was the ideal outcome from my view.
And the concept of a DAO has gotten massive exposure, which is great.
But without the messy administration woes a win would have entailed, and which no doubt would have led to disagreements and bitterness.
And which, frankly, DAOs are not yet ready to handle. The frameworks just aren't there for it. DAOs are fine for experimental use with cryptofolk who are used to the chaos, but it's not time for the normies yet. It's too early for a particularly adhoc dao to deal with the masses.
As long as the funds are returned promptly, this was the ideal outcome from my view.
> pent-up demand and desire to rewrite the rules around ownership & sovereignty
Can you expand on this? I've never seen these things as anything new just the same old get rich quick stuff we've seen forever but this has me curious.
Can you expand on this? I've never seen these things as anything new just the same old get rich quick stuff we've seen forever but this has me curious.
Two areas stand out to me personally:
1. Gaming. There are a lot of interesting games now where people own assets (sort of like trading cards), characters in the games, and get compensated for how they contribute to the games. This is a very interesting model, and some of the games have millions of DAUs... And that's millions of DAUs while the tools to buy the tokens to play the games are still very difficult to obtain for some people.
2. DAOs. The level of interaction and excitement around people discussing how to govern their communities in a healthy, scalable way is something I've never seen in social media... This doesn't even involve money/crypto changing hands -- it's about using voting tokens, bots, and creative rule making to make organizations and communities grow and scale inclusively and in a way that doesn't have a centralized authority making decisions (in contrast to say, Facebook).
If you're interested in learning more, I highly recommend joining a few Discord channels for DAOs.
1. Gaming. There are a lot of interesting games now where people own assets (sort of like trading cards), characters in the games, and get compensated for how they contribute to the games. This is a very interesting model, and some of the games have millions of DAUs... And that's millions of DAUs while the tools to buy the tokens to play the games are still very difficult to obtain for some people.
2. DAOs. The level of interaction and excitement around people discussing how to govern their communities in a healthy, scalable way is something I've never seen in social media... This doesn't even involve money/crypto changing hands -- it's about using voting tokens, bots, and creative rule making to make organizations and communities grow and scale inclusively and in a way that doesn't have a centralized authority making decisions (in contrast to say, Facebook).
If you're interested in learning more, I highly recommend joining a few Discord channels for DAOs.
I personally never see the gaming use cases for this going mainstream. The bigger players in this right now (ex: Axie) are super exploitative l, especially of poorer individuals and its business model reeks of a pyramid scheme.
As for the broader ideas, I don't think the incentives line up. What incentive does a video game developer, especially a large one, have to support any of this? And how would it actually work beyond gimmicky pyramid scheme games like Axie?
As for the broader ideas, I don't think the incentives line up. What incentive does a video game developer, especially a large one, have to support any of this? And how would it actually work beyond gimmicky pyramid scheme games like Axie?
Maybe I misread you, but why would a larger video game developer need to support an industry to lend it credibility?
Most web 2.0 companies don't support web3, and most web3 community members would argue that this is because web3 directly threatens the web 2.0 business model.
I could spend all day on Facebook making stupid posts, or play Axie Infinity and maybe make some money. Which one is worse?
Most web 2.0 companies don't support web3, and most web3 community members would argue that this is because web3 directly threatens the web 2.0 business model.
I could spend all day on Facebook making stupid posts, or play Axie Infinity and maybe make some money. Which one is worse?
[deleted]
so many people are just looking to belong to something now. Society at least in the US has lost its sense of togetherness and belonging so many people have no real life friends and spend the vast majority of their time online. Its a society wide issue and this is a symptom. Good for them for getting some sense of joy or excitement from this.
The most amazing part is that the participants for at least an hour all thought they won. They were celebrating in a Twitter Space. I popped in for a few minutes, heard many people talk about how they were "literally shaking" from the excitement, and really playing up the significance of the constitution being "the first act of decentralization from English rule" and 2022 being "the year of the DAO".
Nobody had the heart to tell him that the constitution was not the declaration of independence.
But it turns out the "inner circle" running this Twitter space, who all had very official looking Lions and Apes as their avatars, was so far removed from the actual inner circle that they had no idea what really happened at the auction and instead were just LARPing as being insiders.
I am not anti-crypto, but most of the crypto culture should probably be burnt to the ground.
Nobody had the heart to tell him that the constitution was not the declaration of independence.
But it turns out the "inner circle" running this Twitter space, who all had very official looking Lions and Apes as their avatars, was so far removed from the actual inner circle that they had no idea what really happened at the auction and instead were just LARPing as being insiders.
I am not anti-crypto, but most of the crypto culture should probably be burnt to the ground.
It was amazing. I tuned in briefly. And really speaks to all the issues cryptocurrency has and its inability to find a use case. The only company that has found success is Coinbase. They’re the business selling shovels to the gold miners.
The only company that has found success? Umm, that was maybe true in 2012. Might want to check again.
For example:
* Axie Infinity (https://www.notboring.co/p/infinity-revenue-infinity-possibi...)
But there are many.
For example:
* Axie Infinity (https://www.notboring.co/p/infinity-revenue-infinity-possibi...)
But there are many.
The one example you cite has been called out as a ponzi scheme elsewhere: https://news.ycombinator.com/item?id=29245147
Thanks, ill look into it some more. I trust Not Boring but something could be up. tbh tho, people still call bitcoin a ponzi scheme. None the less, there are definetily more profitable companies in the space besides just Coinbase ;p
Bloody hell...
"Scores of people in the Philippines and Vietnam have quit their jobs and make a better living playing Axie for hours every day. They earn Smooth Love Potion (SLP), a token earned through Axie gameplay that can be exchanged for fiat, which in turn can be used to pay for food, shelter, medical bills, and all of the other things needed to survive. Some people who were previously making $5 per day now make $20."
"Scores of people in the Philippines and Vietnam have quit their jobs and make a better living playing Axie for hours every day. They earn Smooth Love Potion (SLP), a token earned through Axie gameplay that can be exchanged for fiat, which in turn can be used to pay for food, shelter, medical bills, and all of the other things needed to survive. Some people who were previously making $5 per day now make $20."
> To start playing, you need three Axies. You can acquire Axies in the Marketplace, where the cheapest of the 99,323 available is going for 0.1 ETH, or $195.
Something is fishy. Where do people making $5/day get $600 to buy into dumb game? This is nearly half a year worth of income to gamble on this thing. If this is actually happening, it’s sad.
Lots of games have had grinding farms in developing nations and in that respect, this seems no different except that is branded with “crypto” and “nft” and somehow that’s supposed to make it different, while in reality it just seems to make it more complex. But mostly it seems insane that the buy in is $600. I look forward to hearing the stories of indentured servants in developing nations being forced to play this game to pay back their buy-in debt.
Something is fishy. Where do people making $5/day get $600 to buy into dumb game? This is nearly half a year worth of income to gamble on this thing. If this is actually happening, it’s sad.
Lots of games have had grinding farms in developing nations and in that respect, this seems no different except that is branded with “crypto” and “nft” and somehow that’s supposed to make it different, while in reality it just seems to make it more complex. But mostly it seems insane that the buy in is $600. I look forward to hearing the stories of indentured servants in developing nations being forced to play this game to pay back their buy-in debt.
I interviewed a candidate in Manilla a month ago, he had purchased Axie pretty early on when it was a lot more affordable to get started. He has a great job in IT support, so he lends his Axies to his dad and brother and they work it like a full-time job. His dad plays pretty much all day and his brother plays all night. He said many of his friends similarly got in early and lend their tokens out to friends and family. If you think about it, your numbers make perfect sense--would you stake half your annual salary to quadruple it? I would!
> would you stake half your annual salary to quadruple it
Fuck no. I would not allocate half a year’s salary on a gamble.
Indeed since this article was written, Axie tokens tanked.
Fuck no. I would not allocate half a year’s salary on a gamble.
Indeed since this article was written, Axie tokens tanked.
If the Constitution sold for $42M in the end but this DAO raised $47M, why didn't they win the auction? I am confused honestly.
Fees, funds reserved for transportion, safety, storage, etc. You can't just buy an original copy of the US Constitution, stick it in your carry-on, and drop it off at the local museum.
From their Discord announcement:
> @everyone Lots of questions coming up about why we stopped the bidding where we did. The proper care and maintenance of the Constitution requires a reserve that is needed to insure, store, and transport the document, and we calculated the absolute max we could go to while still meeting these requirements. The opposing bidder passed that max, and we were unable to go any higher while still ensuring that we could properly care for the document. Additionally Sotheby's takes a cut of every auction sale with their fees, and this amount had to be accounted for as well.
From their Discord announcement:
> @everyone Lots of questions coming up about why we stopped the bidding where we did. The proper care and maintenance of the Constitution requires a reserve that is needed to insure, store, and transport the document, and we calculated the absolute max we could go to while still meeting these requirements. The opposing bidder passed that max, and we were unable to go any higher while still ensuring that we could properly care for the document. Additionally Sotheby's takes a cut of every auction sale with their fees, and this amount had to be accounted for as well.
A buyer's premium (https://en.wikipedia.org/wiki/Buyer%27s_premium for background, https://www.sothebys.com/en/buy/auction/2021/the-constitutio... for the details) ? Some quick and dirty maths suggest the final price to be $48,522,000.00
Stewardship has extra costs associated with insurance, safe transport, etc.
They talked about this in the discord.
Ultimately they went as high as they could go given these costs.
They talked about this in the discord.
Ultimately they went as high as they could go given these costs.
They said, after taxes they wouldn't have enough money left to care for the document.
ETH price volatility with gas fees and auction costs is the reason.
Downvoters: It's true. Otherwise, they would already be celebrating that they have won the auction and covered all the fees.
Well I was quite surprised by this outcome and was actually expecting for them to win. [0] Looks like the problem always points to Ethereum (and its gas fees) which ruined it for them.
[0] https://news.ycombinator.com/item?id=29258901
Downvoters: It's true. Otherwise, they would already be celebrating that they have won the auction and covered all the fees.
Well I was quite surprised by this outcome and was actually expecting for them to win. [0] Looks like the problem always points to Ethereum (and its gas fees) which ruined it for them.
[0] https://news.ycombinator.com/item?id=29258901
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The effort fundamentally conflicted with auction dynamics. The DAO had a hard cap on the price they could bid, and the hard cap was publicly known. As interesting as the idea was, it was never going to be successful.
Was it a sealed bid auction or something? If it was open bid auction, then knowing the hard cap isn't really an impediment to them winning the bid. If there was someone who had more money than them, they'll still lose, and if there wasn't someone with more money, they'll still win. The worse that could happen is them paying more than they needed to, by the seller pumping up the price with shill bids.
>If there was someone who had more money than them, they'll still lose, and if there wasn't someone with more money, they'll still win.
You're claiming there's no advantage to knowing your opponent's max bid?
I wish all my eBay competitors agreed with you.
You're claiming there's no advantage to knowing your opponent's max bid?
I wish all my eBay competitors agreed with you.
>You're claiming there's no advantage to knowing your opponent's max bid?
If there is, why don't you state what it is, rather than asking me?
If there is, why don't you state what it is, rather than asking me?
If I know your maximum price before the auction, I can do whatever is in my power to be able to exceed that price, if I choose.
Especially in auctions with multiple known bidders, collusion opportunities can arise to allow bidders to control the price, too. Look at GSA natural resource auctions for examples.
Especially in auctions with multiple known bidders, collusion opportunities can arise to allow bidders to control the price, too. Look at GSA natural resource auctions for examples.
>If I know your maximum price before the auction, I can do whatever is in my power to be able to exceed that price, if I choose.
But don't you have a limited budget? If your budget is $40M, and you know that the DAO is going to bid all the way up to $50M, how does that help you? You will still lose the bid. Conversely, if your budget is $50M, and you know that the DAO will only bid to $40M, how does that help you? During open bidding (ie. non-sealed bid), the bids go up incrementally, so after the DAO placed its bid, all you need to do is increase your bid by the minimum increment and you'll win. Using the strategy of "increment the minimum amount until you reach your budget" gets the same result.
But don't you have a limited budget? If your budget is $40M, and you know that the DAO is going to bid all the way up to $50M, how does that help you? You will still lose the bid. Conversely, if your budget is $50M, and you know that the DAO will only bid to $40M, how does that help you? During open bidding (ie. non-sealed bid), the bids go up incrementally, so after the DAO placed its bid, all you need to do is increase your bid by the minimum increment and you'll win. Using the strategy of "increment the minimum amount until you reach your budget" gets the same result.
"Whatever is in my power" can mean lots of things.
If you were short by $1M, you could probably convince someone to loan you that amount quite easily.
The GP already mentioned colluding - you could for eg, merge funds with another potential bidder (or donor) to "just cross the amount" in exchange for something (say a yearly showing of the constitution at a museum of their choice)
Knowing your opponents maximum amount makes your riskier bets (loaning money, striking deals) much less risky - atleast in a two-way auction(?)
If you were short by $1M, you could probably convince someone to loan you that amount quite easily.
The GP already mentioned colluding - you could for eg, merge funds with another potential bidder (or donor) to "just cross the amount" in exchange for something (say a yearly showing of the constitution at a museum of their choice)
Knowing your opponents maximum amount makes your riskier bets (loaning money, striking deals) much less risky - atleast in a two-way auction(?)
That's just not true. If the second highest bidder could only go to $20, then anything above $20 would be fine.
It's the fact that the second bidder was willing to go above $48 that killed then.
This is pretty classic "Dutch Auction" dynamics, where the winning bidder gets the item at the reserve/max price of the second highest bidder.
https://en.wikipedia.org/wiki/Dutch_auction
It's the fact that the second bidder was willing to go above $48 that killed then.
This is pretty classic "Dutch Auction" dynamics, where the winning bidder gets the item at the reserve/max price of the second highest bidder.
https://en.wikipedia.org/wiki/Dutch_auction
It's even more hilarious - half of the funders (below median donation of 200$) will get absolutely nothing back, because their tokens will be eaten by transaction costs :)
There was some talk about moving the funds over to Arbitrum, which is Ethereum Layer 2 to save on fees, but not sure how ok the community would be with that.
Full screen ads after reading for 15 seconds with uBlock Origin active.
Meanwhile, firefox + ublock work so fine that I keep forgetting that ads even exist, if it wasn't for the casual reminder here at HN...
Doing God's work here
Interesting...
1. I didn't know something like the US would allow the original US constitution to be privately held. But I guess it makes sense. The value is in the law it establishes and all of it's copies. The original is largely sentimental and doesn't need to be held by the govt. 2. I'm sure this is just naivete, but it made me think that going forward in digital media there aren't any originals to own. What even is an original? I'm sure this is all deeply obvious in NFT land.
1. I didn't know something like the US would allow the original US constitution to be privately held. But I guess it makes sense. The value is in the law it establishes and all of it's copies. The original is largely sentimental and doesn't need to be held by the govt. 2. I'm sure this is just naivete, but it made me think that going forward in digital media there aren't any originals to own. What even is an original? I'm sure this is all deeply obvious in NFT land.
Whatever ills Ethereum was trying to solve these gas fees certainly aren't helping. Even a slow transaction is averaging $120.
I don't think this is correct. Are you confusing gwei with USD? A normal funds move is around $10 USD right now https://etherscan.io/gastracker which, yeah, is high, but a lot less than $120
It was gwei but this site never made it apparent https://crypto.com/defi/dashboard/gas-fees
And prices, in USD,were higher when I posted my statement earlier.
And prices, in USD,were higher when I posted my statement earlier.
Imagine paying $10 to send money in 2021. Crypto is a joke.
I get paid in the EU, move it to the UK, and then send it to my US account. All in all this takes around 2 days and costs around $60. Wish I was paid in crypto and had quick $10 transactions instead (albeit offboarding it into fiat would cost a bit too, because of exchange fees).
It's 10 cents or less on layer 2 solutions like Polygon or zkSync.
Ethereum mainnet has incredibly high demand for block space right now because there's hundreds of billions of dollars worth of value trading on top of it. And at that scale $10 is peanuts.
Ethereum mainnet has incredibly high demand for block space right now because there's hundreds of billions of dollars worth of value trading on top of it. And at that scale $10 is peanuts.
Not if I'm trying to pay for something like a $10/month recurring fee!
So, you’re telling me there’s a massive inequality in the system controlled by those with wealth and everyday people basically can’t participate because there’s no room for their petty needs.
I don't understand what you get downvoted for. People in your replies are proving your point. Crypto is for rich people and the .01% who send money over borders regularly. Crypto IS a joke.
Probably it's because of the generalization. Just because one store has a 2000% markup on an item, doesn't mean stores in general are a joke.
> Imagine paying $10 to send money in 2021.
Your imagination is wrong in its estimate of absurdity: Western Union charges $60 to transfer $999 to the US:
https://www.westernunion.com/us/en/send-money/app/price-esti...
Up to $158 depending on what option you use, which is somehow even more than the claimed gas fees.
Your imagination is wrong in its estimate of absurdity: Western Union charges $60 to transfer $999 to the US:
https://www.westernunion.com/us/en/send-money/app/price-esti...
Up to $158 depending on what option you use, which is somehow even more than the claimed gas fees.
Meanwhile Wise charges $7.5.
This is focusing on the current worst case for sending money in all of crypto though. At the moment sending btc is about 50 cents and solana remains less than 1 cent.
This is $10 for sending a transaction in the base Ethereum blockchain. Imagine you're sending millions, can do so quickly, only for $10, and without needing permission or paperwork from any bank? Also, most normal transactions should happen at Layer 2, which would cost orders of magnitude less. zkSync, which is a layer 2 solution for Ethereum, is incredibly cheap and inherits the same security as the base chain. The costs would be fractions of a penny.
So the blockchain is for the rich, got it.
This is such a ridiculous take. Blockchain is completely fixing the remittence industry. It is one of the most empowering technologies for the developing world.
And your statement isn't even true. On layer 2s like Polygon you can send $0.50 anywhere in the world for less than a penny in fees. Think of Ethereum like the New York Times. You want to place an ad--so do many other people, and page space is limited. It's a pretty ridiculous critique of the entire advertising industry to say it's only for the rich because placing an ad in the New York Times is expensive. You can post your ad on craigslist for free.
And your statement isn't even true. On layer 2s like Polygon you can send $0.50 anywhere in the world for less than a penny in fees. Think of Ethereum like the New York Times. You want to place an ad--so do many other people, and page space is limited. It's a pretty ridiculous critique of the entire advertising industry to say it's only for the rich because placing an ad in the New York Times is expensive. You can post your ad on craigslist for free.
> Blockchain is completely fixing the remittence industry. It is one of the most empowering technologies for the developing world.
I'd love to see some numbers to that effect.
I'd love to see some numbers to that effect.
Happy to oblige:
https://www.nasdaq.com/articles/crypto-fast-becoming-a-prefe...
https://techcrunch.com/2021/10/09/crypto-remittances-are-a-l...
https://restofworld.org/2021/crypto-remittances/
And a fun (mind-blowing, to me) demo https://twitter.com/jackmallers/status/1441089090628177933
https://www.nasdaq.com/articles/crypto-fast-becoming-a-prefe...
https://techcrunch.com/2021/10/09/crypto-remittances-are-a-l...
https://restofworld.org/2021/crypto-remittances/
And a fun (mind-blowing, to me) demo https://twitter.com/jackmallers/status/1441089090628177933
to be very honest, this experience isn't much different from early days of bitcoin. It's only recently that fees have gotten exorbitant and we've had to invent layers to fix that.
Bitcoin in 2008 was as good for remittances as it is today - it's just easier to acquire and costlier to move (lightning being the exception). However, it manages by ignoring all regulations (Indian examples: [0], [1]). Whether these laws are just or proportional in a world where information moves at the speed of light is a question for democratic processes, not multinational corporations to answer.
Payments via SWIFT are slow not because the bits transferring money over SWIFT are much slower, but because international remittance regulations are genuinely complicated.
[0]: https://en.wikipedia.org/wiki/Foreign_Exchange_Management_Ac...
[1]: https://fcraonline.nic.in/home/PDF_Doc/FC-RegulationAct-2010...
Bitcoin in 2008 was as good for remittances as it is today - it's just easier to acquire and costlier to move (lightning being the exception). However, it manages by ignoring all regulations (Indian examples: [0], [1]). Whether these laws are just or proportional in a world where information moves at the speed of light is a question for democratic processes, not multinational corporations to answer.
Payments via SWIFT are slow not because the bits transferring money over SWIFT are much slower, but because international remittance regulations are genuinely complicated.
[0]: https://en.wikipedia.org/wiki/Foreign_Exchange_Management_Ac...
[1]: https://fcraonline.nic.in/home/PDF_Doc/FC-RegulationAct-2010...
> Imagine you're sending millions..
This is the problem.
Ethereum is for those who can afford the astronomical gas fees even on a slow transaction speed which is quite worse than card payment at this point.
Basically it is useless for anyone that pays for their groceries given that the gas fee itself will be more expensive than the food you are paying for.
Other blockchains already exist to avoid these issues from the start without relying on, fixing / patching, building on top of Ethereum.
This is the problem.
Ethereum is for those who can afford the astronomical gas fees even on a slow transaction speed which is quite worse than card payment at this point.
Basically it is useless for anyone that pays for their groceries given that the gas fee itself will be more expensive than the food you are paying for.
Other blockchains already exist to avoid these issues from the start without relying on, fixing / patching, building on top of Ethereum.
The move to rollups for cheaper transactions has begun but isn't fully distributed yet. You can use Arbitrum or Optimism for much cheaper transactions today. And transaction fees are free on Immutable X (NFT marketplace) and Dydx (perpetuals marketplace), which are zero knowledge rollups that leverage a clever compression technique to transact with 1/100th the cost or less.
If I'm a regular human being who's trying to purchase an actual product with Ethereum, is any of this helpful to me?
The translation from the GP comment is: No.
You are better off using a different cryptocurrency that can scale and handle payments with extremely low fees better than Ethereum or failing that use something like Apple Pay.
Even if you did all of those suggestions, you still need to pay the gas fees to put it on a layer 2 solution, or that rollup solution / zkSync contraption the web3 guys speak of in order to have 'less' transaction fees in the first place.
After all of those steps, the gas fee will still cost more than paying for your groceries in the supermarket. Making it totally useless for paying for your food.
One more thing:
You are better off using a different cryptocurrency that can scale and handle payments with extremely low fees better than Ethereum or failing that use something like Apple Pay.
Even if you did all of those suggestions, you still need to pay the gas fees to put it on a layer 2 solution, or that rollup solution / zkSync contraption the web3 guys speak of in order to have 'less' transaction fees in the first place.
After all of those steps, the gas fee will still cost more than paying for your groceries in the supermarket. Making it totally useless for paying for your food.
One more thing:
You better have enough to cover the gas fees for approving and transferring otherwise the transaction can 'fail' and is non refundable.
>Even if you did all of those suggestions, you still need to pay the gas fees to put it on a layer 2 solution, or that rollup solution / zkSync contraption the web3 guys speak of in order to have 'less' transaction fees in the first place.
Not necessarily. Exchanges are starting to support some of these so you can skip the Ethereum mainnet completely.
Not necessarily. Exchanges are starting to support some of these so you can skip the Ethereum mainnet completely.
So the recent radical solution that the blockchain is empowering is moving off the blockchain and relying on a centralized store of information?
Exchanges have always been the most common onboarding method, nothing recent or radical there. Of course, you can also always go p2p and buy directly. One way would be to use localmonero and then use bridges through cheap networks while avoiding Ethereum mainnet or use bridges directly if you have crypto already.
This needs to be confirmed, but on the live event they said the loss was due to strict requirements around proper storage of the document which the seller didn’t feel the DAO had satisfied. EDIT: https://news.ycombinator.com/item?id=29277129#29277637
This was an interesting ordeal. One comment on Twitter suggested we may have seen the start of a new phenomenon, “money swarms” [1], in which groups of Internet people can raise really large sums quickly for some goal. Bit of chaos energy to be sure.
FWIW I think at least some of the people involved in this feel a very genuine connection to what they were doing. People who get excited about DAOs right now differ a bit from the earlier extreme-libertarian crypto; they’re into the idea of active participation in government rather than no government at all. It’s not much different than the 2010 conversations that Occupy folks were having on Reddit, when that seemed like a big novelty.
1. https://twitter.com/co_eq/status/1459987329511145477?s=21
This was an interesting ordeal. One comment on Twitter suggested we may have seen the start of a new phenomenon, “money swarms” [1], in which groups of Internet people can raise really large sums quickly for some goal. Bit of chaos energy to be sure.
FWIW I think at least some of the people involved in this feel a very genuine connection to what they were doing. People who get excited about DAOs right now differ a bit from the earlier extreme-libertarian crypto; they’re into the idea of active participation in government rather than no government at all. It’s not much different than the 2010 conversations that Occupy folks were having on Reddit, when that seemed like a big novelty.
1. https://twitter.com/co_eq/status/1459987329511145477?s=21
I think these "money swarms" will learn and be able to coordinate more effectively relatively soon. One of my favourite projects is pooltogether.com, a no-loss lottery where the prize is generated from the interest on the pooled money that is deposited.
I can imagine similar efforts for crowdfunding projects where those that pool their money together don't actually have anything but the interest to lose. Maybe built on top of Alchemix platform? This will certainly be more likely once the transactions fees are lower and people are using layer-2s.
I can imagine similar efforts for crowdfunding projects where those that pool their money together don't actually have anything but the interest to lose. Maybe built on top of Alchemix platform? This will certainly be more likely once the transactions fees are lower and people are using layer-2s.
Isn't that just a mutual fund with 0% interest for all but one person?
These actually exist in the fiat world as well, and have been shown to increase the savings rate. Interesting coverage on the Freakonomics podcast here: https://freakonomics.com/podcast/say-no-no-lose-lottery-rebr...
I don't understand. Gofundme, kickstarter. This has been happening. And lots of those end up being scams. This is crowdfunding, why do we need a new term? DAO adds some new dimensionality to it, but not significant that I can tell. Kyle was able to raise millions for his defence fund very quickly.
How long until the first DAO attempts to acquire companies on wall street?
[deleted]
Your Twitter feed lights up. It’s some guy asking you to send money to a Delaware corporation's account “to buy the Constitution.”
These DAO tokens give no actual claim to anything. If the bid had succeeded, this museum piece would be owned by a private corporation. Not even a proper non-profit, just a guy who took advantage of the zeitgeist.
Now that the bid failed, they're refunding the money, but donors have already lost millions on gas and exchange fees. The DAO creators were even bragging about how many of these donors were brand new wallets. So in all, a very typical crypto outcome: nothing actually happened in the real world, but the top of the pyramid extracted some more money from thousands of retail newcomers.