Feeling patriotic? This week, rare art collectors and crypto investors alike are about to have an interesting opportunity, particularly if they are fans of the red, white and blue. One of 13 surviving first-edition copies of the U.S. Constitution is up for auction through Sotheby’s. Making things more interesting is the fact that a decentralized autonomous organization (DAO) has formed to try and purchase it. Organizers of the so-called ConstitutionDAO have so far raised more than $12 million.
So what is the ConstitutionDAO trying to do? And why is this interesting to so many on Wall Street?
What Is the ConstitutionDAO?
DAO is pronounced “DOW,” but it has nothing to do with the Dow Jones Industrial Average. Rather, decentralized autonomous organizations can include multiple members from around the world, and membership is recorded on the blockchain. Members vote on the investment decisions made by the group, operating on a remote basis.
Put another way, a DAO is a digital community that shares a bank account and uses it to invest in rare assets. Such is the case for ConstitutionDAO, as Forbes explains.
As the ConstitutionDAO website lays out, the fact that a rare copy of the U.S. Constitution is up for auction makes for a unique and fascinating investment opportunity. The technology behind the blockchain has extended new levels of autonomy and freedom to investors, allowing for increasing levels of self-governance.
“It’s fitting that we use this technology to honor and protect the greatest historical tool for human governance: the U.S. Constitution,” state ConstitutionDAO’s founders on their web page. “… We’re buying the constitution and it will be governed by the people.”
What Does This Mean for Investors?
What do investors actually receive if ConstitutionDAO wins the auction? As the site details, they receive a governance token as opposed to fractionalized ownership. These tokens grant the ability to advise on the “mission and values of” of the group as well as where and how the Constitution should be displayed.
Who would actually hold the physical document if ConstitutionDAO wins the auction? As of now, the founders are unsure. The organization states that it is currently seeking an “esteemed partner” to display the Constitution, but makes it clear that they’d like to see it be an institution that is free to the public. The ability to physically hold the document seems like an excellent incentive to contribute to the DAO.
This team behind ConstitutionDAO has been working hard to raise the funds it needs, though. It has also garnered an impressive social media following. While not all followers are likely investors, they are rooting for ConstitutionDAO in this race to own a piece of history.
gm frens lets get this CONSTITUTION
— ConstitutionDAO (📜, 📜) (@ConstitutionDAO) November 16, 2021
What Comes Next?
As of now, it’s hard to say for sure. With the auction scheduled for tomorrow at 6:30 p.m. Eastern and the team still short of its goal by more than $7 million, the clock is ticking. This story is fascinating to watch as it unfolds. ConstitutionDAO has successfully raised millions, but it can it raise the millions more it needs within the next 24 hours? For context, Sotheby’s has estimated the price for the copy to be between $15 million and $20 million.
The broader pictures that investors should take from this is that DAOs are an emerging trend in the world of decentralized finance. We’re likely going to be hearing more about them as we move into the new year, even when there’s no Constitution up for auction.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
