ConstitutionDAO (PEOPLE): A Reflection on Crowdfunding in Web3

In the cryptocurrency space, a decentralized autonomous organization (DAO) is a governing entity within a crypto project that distributes authority among members who hold governance tokens. Operating on a community-driven model, a DAO adopts a bottom-up structure. The members of the DAO hold governance tokens that grant smart contract voting rights on various matters related to the entity. The DAO’s governing activities and votes are recorded via smart contracts to preserve integrity and transparency.

ConstitutionDAO was a decentralized autonomous organization whose specific one-time purpose was to purchase an official document for preservation. It played a pivotal role in influencing future projects that utilize DAOs for crowdfunding, despite ultimately falling short of its intended goal.

Key Takeaways:

• ConstitutionDAO was a crowdfunding DAO with the goal of purchasing a rare copy of the 1787 version of the U.S. Constitution.

• While ConstitutionDAO failed to achieve its purpose, it demonstrated the potential influence DAOs hold in the mainstream online space.

• ConstitutionDAO’s native token, PEOPLE, can be purchased on Bybit as a Spot pair or USDT Perpetual contract.

What Was ConstitutionDAO?

ConstitutionDAO was a decentralized autonomous organization that was launched in November 2021 through a crowdfunding initiative by Graham Novak and Austin Cain. This new project was formed for the exclusive purpose of obtaining the 1787 limited edition copy of the Constitution of the United States, of which only 13 copies exist.

ConstitutionDAO made history as the first DAO project to raise funds for the preservation of a founding document in the physical world. While it successfully raised capital from over 17,000 contributors, with a fund totaling more than $42 million, ConstitutionDAO still failed in its intention to purchase the rare copy of the U.S. Constitution from 1787. Nevertheless, it has served as an inspiration for future projects that will benefit the real world. As a failed DAO project, however, it also created financial loss for its investors.

History of ConstitutionDAO

ConstitutionDAO was founded by Graham Novak and Austin Cain, two residents from Atlanta, Georgia in the field of finance. On a Discord platform, they proposed buying a copy of the remaining 13 official copies of the U.S. Constitution from 1787 and began fundraising on Juicebox, the Ethereum crowdfunding platform.

ConstitutionDAO’s Viral Popularity

ConstitutionDAO exceeded its initial crowdfunding target of $20 million in just five days, and within a week over 17,000 contributors had helped pool $42 million in Ether (ETH). Of these 17,000 donors, 2,300 were reportedly first-time ETH users. Contributors were rewarded with PEOPLE tokens, granting them membership status within the DAO. If ConstitutionDAO won the bid, its members would be able to vote on where and how to display the treasured document. ConstitutionDAO's popularity was partially attributed to the astute use of memes that caused it to go viral. Memes related to the 2004 film "National Treasure," in which Nicolas Cage starred in the lead role, popped up on Twitter, further aiding its breakneck pooling of funds. Its slogan, #WAGBTC (“We Are Going to Buy the Constitution") further stirred public interest as it trended.

ConstitutionDAO’s Bid Loss

Despite its tremendous fundraising, ConstitutionDAO’s $42 million bid ultimately lost to billionaire hedge fund CEO Kenneth Griffin, who bid for $43.2 million at the Sotheby's auction in November 2021. Afterward, ConstitutionDAO was criticized for publicly announcing its maximum bid, and just a week after it had launched, it dispersed. All of its members were given the option of a refund by exchanging PEOPLE for ETH. Given the exorbitant price of Ethereum gas fees, however, this would pose a financial loss for PEOPLE holders, should they choose to redeem their PEOPLE tokens for ETH.

Although its bid fell short, ConstitutionDAO became a part of cryptocurrency history as the first DAO project to raise funds in an attempt to purchase a historic document. This marked a revolutionary moment in the crypto sphere, encouraging projects to pool the collective resources of members and use the tool of partial ownership interests for the acquisition and management of rare items in the physical world. However, it also underscored the need for substantial improvements in utilizing DAOs for crowdfunding and acquiring rare assets in the future.

How Did ConstitutionDAO Work?

Those who invested in ConstitutionDAO received a million PEOPLE tokens for every ETH they contributed. In addition to enabling participation in the pooled purchase of a copy of the Constitution of the United States, PEOPLE tokens were supposed to give members smart contract voting rights to steer the project’s future plans. For example, if the DAO had won the bid at the Sotheby’s auction, its next votes would have been in regard to the exhibit location for the document and how long it would remain on exhibition, as well as next steps for the community of those holding PEOPLE tokens.

In reality, the ability to vote on future plans never materialized. While the community was said to be a DAO, its core members were the “shadow rulers” who made independent decisions without any discussions among the community. For instance, the project disbanded without a community vote. Members had the choice to receive refunds, but the high cost of ETH gas fees prevented many PEOPLE token holders from redeeming their PEOPLE for ETH.

A DAO’s most fundamental principle is that every member possesses voting power. The numerous holders of ConstitutionDAO’s PEOPLE tokens didn’t have voting power at the organization’s most critical decision-making junctures. Because of this, many people thus assert that ConstitutionDAO isn’t a truly decentralized autonomous organization.

What Is PEOPLE Token?

PEOPLE is the governance token of ConstitutionDAO, though its lack of actual utility makes it more of a meme coin. Notably, the project has stated that it didn’t offer partial ownership of the copy of the U.S. Constitution to those who held PEOPLE tokens. Instead, the project provided voting members with the ability to decide where the rare document would be displayed, in addition to other related administrative matters. In addition, ConstitutionDAO has said that its token holders shouldn’t have considered their purchase of PEOPLE tokens as an investment.

Instead, according to ConstitutionDAO, token holders were donating toward the organization's goal and receiving governance rights, rather than a fractional ownership of the document itself. 

However, the meme publicized by the founding members had said, "Buy the Constitution." This directly opposes what the DAO’s founding members have subsequently said, and has led some people to believe they would have had fractional ownership in the copy of the U.S. Constitution. Still others had simply invested with the hopeful assumption that the PEOPLE token's value would skyrocket.

ConstitutionDAO's Governance Controversy

In spite of ConstitutionDAO’s announcement that voting power would be granted to those who held PEOPLE tokens, the specific details of governance were never published. Following its failure to win the Sotheby’s bid, ConstitutionDAO made a series of decisions without any votes from PEOPLE token holders.

The ConstitutionDAO core team announced that those who had purchased PEOPLE tokens in November 2021 were given the chance for a refund, minus Ethereum gas fees. Members could claim their refund at any time, potentially enabling them to use their tokens to profit from price volatility. In reality, substantial gas fees have led to financial losses for investors seeking a swift refund. The resulting confusion and financial setbacks for many individuals sparked a sense of chaos and anger following the unsuccessful auction purchase.

While some investors did in fact immediately flip their tokens, the remaining token holders were shocked to learn that the PEOPLE token would be replaced with the WTP (“We the People”) token. The core members maintained that since the founding purpose of ConstitutionDAO was no longer viable, they were making the move to the WTP token. However, only a day later, the core members made a reversal: WTP tokens were off the table, and PEOPLE crypto tokens would continue to be used for future projects. And later, the project announced that there were no future plans for ConstitutionDAO because its founding purpose to buy a copy of the Constitution had failed at auction.

The Upshot

In just one week, the ConstitutionDAO project had launched, taken on tens of thousands of investors and raised millions of dollars. Also within that period, ConstitutionDAO had failed at its founding mission and lost the faith of its investors, with no future plans for the project available. Many of its investors lost significant amounts of money. The project’s core members had stated that the PEOPLE token was defunct, announced a new token and then made a complete 180. The series of significant events occurring over approximately a week left numerous investors in this project feeling confused and frustrated.

ConstitutionDAO (PEOPLE) Price Prediction

Since ConstitutionDAO launched in November 2021, its price has been volatile. As of Jan 26, 2024, PEOPLE’s price is $0.0269, or 85.5% lower than its all-time high price of $0.185 on Dec 23, 2021 and over 2,800% higher than its all-time low of $0.0009 on Nov 21, 2021. The current market cap for PEOPLE is $137,167,595, and its 24-hour trading volume is $30,556,018. PEOPLE’s circulating and max supplies are just over 5 billion.

Based on solid analysis, several top industry sources have made PEOPLE price predictions. CoinCodex anticipates a yearly high price of $0.061 in 2025, rising to $0.094 in 2027 and $0.26 in 2030. Meanwhile, DigitalCoinPrice expects PEOPLE’s price to reach $0.067 by 2025, cross above the $0.10 mark in 2027 to a max of $0.12 and potentially reach $0.20 in 2030.

Both sources predict that PEOPLE’s price will surpass its current all-time high by 2030. While this may paint PEOPLE as a promising token to hold for investment, it’s crucial to conduct your own research because altcoins are prone to volatility — particularly of note when a token has already been sunsetted and has zero utility.

Where to Buy ConstitutionDAO (PEOPLE)

While ConstitutionDAO isn’t an actual DAO, and no longer has a viable purpose, it still offers potential financial benefits to traders, due to the possibility of profiting from both short-term and long-term holds.

There are two ways to buy PEOPLE tokens on Bybit. You can purchase them as a Spot trade pair (PEOPLE/USDT) or through a USDT Perpetual contract (PEOPLEUSDT).

Before buying PEOPLE on Bybit, however, you do need an active Bybit account. If you don’t already have one, you can open your account with a few fast and easy steps. To begin the process, click the sign up link at the top of the home page. You can then walk through the steps to complete the process and link your crypto wallet.

Closing Thoughts

While some people may view ConstitutionDAO as a failed project, it did make great strides in advancing the purpose and functionality of future DAO projects. Its crowdfunding efforts raised a considerable amount of money to achieve a specific real-world goal. In doing so, it moved the dial for mainstream cryptocurrency adoption. However, because the project ultimately failed to achieve its goal, it’s clear going forward that there’s still ample room for improvement in regard to future DAO projects focused on crowdfunding.

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