02 ConstitutionDAO
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Hi, I'm PJ Vogt. This is the Crypto Island miniseries. In this episode, 20,000 people conduct a very strange experiment. That story, after some ads. Search Engine is brought to you by AutoTrader. If you're driving right now, look around. See all those cars? You can find them on AutoTrader because they have the largest selection of new cars, used cars, electric cars, even flying cars. Okay, no flying cars yet. But as soon as those get invented, they'll be on AutoTrader.

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for one of the rarest and most prized pieces of American history, a first printing of the United States Constitution dating to 1787. This was the scene one evening last November in Manhattan. Sotheby's, the auction house, was selling an actual printed copy of the U.S. Constitution.

By the end of the night, it would be the most expensive document ever auctioned, beating out the Magna Carta and Leonardo da Vinci's journal. - Needing a little introduction on its importance, the United States Constitution is the longest continuing charter of government in the world and the product of a revolution in political thought, at least as important and far-reaching as the fight for American independence.

235 years ago, when the Constitution was originally written, it was penned by an engrosser in Philly named Jacob Chalice. He printed on animal skin, either calf, sheep, or goat, and he was paid the equivalent of about $30 in Pennsylvania continental currency. Afterwards, 500 typeset copies were made, printed for $420. That means original copies of the Constitution went for $1.19.

At the time, there's no evidence that these 500 copies were considered especially valuable as artifacts. They were about as disposable as the pamphlet a salesman presses into your hand that you take home to your family to decide whether or not you're going to buy a new fridge. Important, informational, not yet historic. And so the copies were mostly not preserved. Of the original 500, a handful remain. Most are in libraries. Two are in private hands. And this was one of them.

It was a very, very rare piece of paper for sale. With only 13 copies known to exist today, in this first printing and only one other available for private ownership, the printing of the Constitution is one of the most significant historical documents ever offered at auction. So in 1787, someone killed an animal, someone else lettered words onto its skin, copies were made, and at the time, those physical artifacts hadn't been considered especially valuable.

But later that year, a country had been born. Five years after that, that country had invented the dollar. And then a lot of other things happened, some of which you've been alive for. And now, a piece of paper was for sale in an auction house in a place called Manhattan, being broadcast live on a website called YouTube. And two mysterious bidders, representing two different ideas about what should happen next in our very strange country, were about to fight over a scrap of paper they'd both decided was valuable. This is a story about one of those bidders.

Sotheby's auctioning off a copy of the U.S. Constitution on Thursday, and a group of crypto investors won in. The organization, called ConstitutionDAO, is raising money using a digital crypto wallet in hopes of securing the winning bid. Joining us is ConstitutionDAO's... Crypto investors buying the Constitution?

I'll be honest with you. When I first heard about all this, my reaction was, come on, guys. I felt the same way I did when I visited LA and saw that the basketball stadium there had been renamed the Crypto.com Arena. Yeah.

Did these guys really have to put their names on everything? So far, they've raised more than 800,000 Ether, which is roughly the equivalent of $3.7 million. The way I imagined this Constitution thing had happened was a couple of dudes who'd gotten rich off Bitcoin, maybe they were 23, probably they were 23, were just stamping their name on one more thing. It really annoyed me. That's how I felt then. But now, I think what was happening was much more complicated, much more interesting.

But at the time, annoyed by the intrusion of crypto into one more sphere of my life, I ignored it. I didn't even see who won. And I didn't bother to learn what it meant that these mystery bidders had organized themselves into something called a DAO. But that would prove to be important. In case you are now where I was then, let me just give you a quick explanation of what DAOs are. DAO stands for Decentralized Autonomous Organization. What you need to know is that a DAO is like two different things that you're familiar with that have been Frankensteined together.

So a DAO starts out as a crowdfunding campaign. Say I wanted to start a podcast company. I really don't, but say I did. I'd go online, I'd tell strangers I wanted to raise a bunch of their crypto, they'd hand it over, we'd have a big pot, and since this is a podcast company, we'd call it Podcast DAO. But then part two of what makes a DAO a DAO is that if you had given me crypto to start Podcast DAO, you'd get a digital coin in exchange, a podcoin.

And PodCoin would represent your share in Podcast DAO. So this is sort of like a stock. You could sell it on an exchange. You could buy more of it. Except PodCoin would also give you very real voting rights in how Podcast DAO was run. In theory, and sometimes in practice, these DAOs do not have a president. They don't have a board of directors. They're run democratically by the people who have funded them.

It is a very weird fusion of some populist, collectivist, almost communist ideas mixed with very late-stage internet hypercapitalism. My curiosity about DAOs only grew this winter, as a series of new ones appeared, striking seemingly at random with new, absurd acts of commerce.

The next really good one was Spice Dow. Maybe you've heard of Spice Dow. This was the one that took place at a Christie's auction instead of Sotheby's. And instead of trying to buy the Constitution, this Dow wanted to buy storyboards for an unmade version of the film Dune from the 1970s. The plan? Use the storyboards as inspiration for a Web3 native animated television series. Christie's estimated value for these storyboards? $38,000 max.

The DAO spent $3 million acquiring them, even though, obviously, owning physical storyboards does not give anyone the right to make content based off of them. What was going on here? The internet seemed to believe these DAOs were just run by people who were hilariously incompetent. Others assumed this was fraud. I sort of wondered if it was maybe something closer to a new religion, but I didn't know, and I wanted to. I wanted to get closer to one of these things.

All right, awesome. All right, so just briefly talking about what Fry's DAO is. Obviously, we're all here because we're keen to do a little acquisition of a franchise, most likely a fast food franchise. So recently, I found myself embedded in the Discord server for a DAO who had not yet really announced themselves to the world, Fry's DAO. This is tape from an AMA where they're pitching themselves to potential investors, internet randos, crypto degenerates.

They wanted $9.69 million so they could start buying individual fast food franchises across America.

So the guy who's talking is part of the DAO's core team. There's always a core team. These are the people who actually set up the back end of the DAO. And crypto being a very pseudonym-friendly space, they don't have to use their real names.

In this meeting, the Fry's now guys are going by names like Slippery Grease, Mustard and Ketchup. They take a little over a half hour laying out their spiel. All right. If, for example, Popeye's is the main goal, but realistically, we're not going to be able to do that for somewhere between five to seven months. We need to acquire businesses that go faster. So at Jimmy John's, you can get in there within 45 to 60 days.

Baskin Robbins, things like that. It's somewhere between a business plan and invasion orders, like how they're going to go about converting internet cryptocurrency into ownership of a bunch of different fast food franchises. When they're done, they open the floor for questions and people have some. Okay. Flippin Burgers. Yeah. So can you guys hear me?

Yep. Okay, good. All right. So I'm kind of new to the whole DAO thing. I've just been like kind of looking into it. Like, so what is exactly the DAO itself take care of that the team isn't? You know what I mean? Like supposedly these DAOs run the business or run a lot of aspects of the business. Well, what exactly is the DAO doing and how does that trickle down to us? You know, how do we benefit from that?

Like, what does it even mean to run a Baskin Robbins via internet democracy? What level of decision are we actually going to be able to vote on? Say we acquire one of these franchises. You said, obviously, hiring a cashier isn't going to be like something we put up for a governance vote. But what about like a general manager? Once we take over one of these places, you know, we're going to have to have somebody that's actually in charge and competent. You know what I mean? I totally know what he means.

My favorite question came from this guy named Andy. Like all truly chaotic questions that have ever been lobbed into an open Q&A, it wasn't really a question. More of a suggestion. Andy? Hey, what's up? Hey, okay. There you go. Yeah, what other plans do you guys got for the future? What about some wild stuff like making it free or hiring ex-felons and such? Yeah.

You know, just to do like a one sentence shill, my idea is for a free restaurant via some art that's going to have like crazy models in it and illustrations and stuff. So I'd like to help y'all and continually, subtly and appropriately shill for mine too as we go. Thank you. I've thought about Andy's suggestion a lot. I think this is what he's saying.

They should have a restaurant where the food is free, the employees are either formerly incarcerated or perhaps currently incarcerated people on a work release program, which is cool, but that it should be funded by art on the walls of models. I don't know. What I know is I've never felt stoned off a conference call before, and I find this all very delightful.

Sure, there are some people in the room asking pedestrian questions about profit. But the overriding feeling, it's more just like we are playing a joke on and with capitalism. By this point, three days in, I was absolutely fascinated by the show I was watching. And I started looking for guides who could just start to explain to me what I was seeing, which was difficult. Crypto is this space where if you're outside of it, there just aren't a lot of people who feel like they straddle between the worlds who speak both languages.

at least who aren't trying to sell you on their new dog coin or whatever. But I did find someone, the person who'd end up being my first guide through this. My name is Paki McCormick. I write a newsletter called Not Boring and run a venture fund called Not Boring Capital. And what does Not Boring Capital invest in?

Not Boring Capital invests in early stage companies across the spectrum in tech. It's kind of the biggest categories that invest in are Web3 and crypto companies, fintech,

a little bit of consumer SaaS, and a long tail of companies. That was a terrible answer. I'm already fucking this up. I was like, those are a bunch of terms that sound smart and they have to do with money. Not for in capital investing in tech companies, both Web 2 and Web 3. One of my big questions has just been, who are the brains behind these DAOs? Who's actually on these core teams?

I really got back into crypto early.

earlier in 2021 after being away from the space for eight years because I was mad at myself for selling Bitcoin in 2013. A life-changing amount of Bitcoin. A life-changing amount? Yeah.

I bought 38 Bitcoin in 2013 at 100 each and sold them for 150 each. And at the peak before this recent crash, I think it was like $2.5 million worth of Bitcoin or something that I sold. Oh, I would call that a life changing amount of Bitcoin. I'm so sorry. Yeah.

So it meant that I kind of stayed away from the space. And so I think I came into it with kind of a fresh perspective, writing more about other tech companies and business strategy and all of that type of stuff and having operated in a very difficult business. I worked for a company called Bruther before. So I think I came into it trying to say, all right, cool, crypto seems really interesting and Web3 seems very, very interesting and like,

The way Packy feels about Web3, it sort of reminds me of how I felt at the beginning of the big podcast boom in 2014. Like this new world was being created. And while it wasn't that hard to see its pitfalls, I was just way more excited about charting the possibilities.

He explained to me that the DAOs I was paying attention to, the ones that really hit the mainstream, those were the big splashy DAOs. But Packy's excitement was about what the DAO structure itself might represent. A new kind of corporation meaningfully controlled by the people who funded it.

And he told me that even now there are DAOs trying to solve actual problems, like how to verify carbon offsets in remote locations or DAOs that allow people with rare diseases to fund research into their own treatments. So instead of it going just VC investing in a potential drug to ultimately going public and having a public biotech stock, there's this in-between point where by having the patient community involved, one, you can actually get the trials filled more quickly.

It also helps with regulators to have the patient community themselves behind it. Packy thinks that whatever DAOs end up evolving into, say, 20 years from now, that'll be a way that businesses in the future are run and funded. Which, who knows? But the real reason I wanted to talk to Packy is that Packy had been centrally involved in Constitution DAO, the DAO that was trying to buy the Constitution. And through Packy, I started meeting other people on the core team.

My name is Nicole Ruiz. I was one of the core team members at ConstitutionDAO. What else? I'm an investor as my day job, but I like going down internet rabbit holes and ConstitutionDAO was one of them. What was your week like in ConstitutionDAO land? What were you working on?

Yeah, I think on Friday morning I was at work and I saw the Reuters article that the Constitution was for sale on Twitter. And I saw some of my friends tweeting about it and I think I dunked on them because they were like, we're going to make a DAO to buy the Constitution. I was like, this is so, like, why do you need a DAO to do that? This seems really silly. And then somebody very kindly replied to me and was like, here's the reasons you think it's cool. And I'm like, wait, that is kind of cool within the hour. And I was like, wait, I want to be part of this. And then I

Jumped in the Discord. Do you remember what they said that you were like, oh, okay. I think they were like, being able to fundraise super quickly and be able to do that publicly will lead to greater trust. And because it's in such a short timeline, like the auction is in like eight days, this is truly a really good test of what a DAO can do quickly. By the end of the weekend, a group of about 30 people had formed the core team of the DAO.

Nicole was probably an ideal person for something like this. She's a VC, but her path there is pretty unusual. She went to community college outside DC for a minute, but dropped out. Then she says she just started attending open talks about tech, meeting industry people on Twitter, and out of pure hustle, parlayed that into a job as an investor. She's a force of nature, and she brought that energy to the DAO. I was like, okay, pull up Discord, get ready to figure out what I can do, and who's a part of this, and who they need, really, specifically.

I think I'm good at finding people to solve problems. And so I was like, who will make this project even better? And then try to find sort of like gaps in operation where people needed help either just like answering an existential question about getting set up because we're trying to figure out like what legal entity do we need? What amount of money do we actually need to fundraise reasonably? Like what does a fundraiser for something like Sotheby's even look like?

There were people who were actually building and talking to museums and writing code and figuring out the legal structure and setting up the wallets and the partnerships and doing all of these things in a very short amount of time. At some point, I was writing a different piece that week and I was just like, you know what, screw it. I'm going all in on this outsider on the inside, explaining what was going on. You were like a participant observer. Participant observer is a great way of putting it.

Over the course of that week, the core team managed to sell this idea of ConstitutionDAO to almost 20,000 people, including Grimes, although she would join Spiced Out too. Each person who donated crypto had gotten a digital coin in exchange. In this case, they were called people tokens. Remember, this is like stock. The tokens had financial value. You could trade them. But more interestingly, they granted all these people voting rights. The ability to decide what should happen to the Constitution if they all won it.

A third of these people were new wallets, which meant in many cases people who apparently had never joined a crypto project before. Together, they'd contributed $47 million, more than twice what Sotheby's had estimated the Constitution should go for. The DAO was ready to bid. More story after some ads. Search Engine is brought to you by Greenlight. A new school year is starting soon. My partner has two young kids, both of whom use Greenlight. And honestly, it's been kind of great.

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Welcome back to the show. Good evening from Sotheby's, New York. I'm Quick Bruning, and tonight I'll be your auctioneer for a very special evening sale.

For the first time... Chapter 2: The Bidding War Sotheby's head of jewelry, Quig Brunig, is standing in a fairly nondescript room on a dais in front of what looks like a Lichtenstein. And now, let's begin the auction. Lot 1787, the Constitution of the United States of America. We'll start the bidding here at $10 million, at $10 million, $11 million, $12 million, at $13 million, now $14 million. The bid's here with me at $14 million.

I'm watching this on YouTube, and in the small box of the frame, you see the room with its reverential audience, wealthy, hushed. We glimpse the backs of their respectful heads.

But just beneath that box, there's the comment section, where thousands of additional viewers live. The DAO. They are anything but hushed. They're ecstatic. Their comments was by a mile a minute. Someone's spamming an emoji of a scroll, like the Constitution. Someone else is typing W-A-G-B-T-C. We're all going to buy the Constitution over and over. Someone makes an NFT joke. The Constitution's a copyright. You just right-click, save as.

At $13 million, now $14 million. It's here with me at $14 million. At $14 million, $30 million with Brooke Lampley. People across the country, across the world, were watching this auction from various computers. But a bunch of the core team had gathered in one place.

They'd found a space with a projector in Midtown Manhattan, near Grand Central Station. So everybody was sitting in there and sort of lining up. We started projecting the YouTube and everybody was getting in the comments, obviously. And like everybody, all these like spammers were going off with the emojis and like, we're all going to make it. And like getting extraordinarily hype like an hour in advance. So that was...

It was very good energy. Yeah, people were excited. Somebody was wearing a tri-corner hat. People were excited. People were getting into it. I wore a red, white, and blue hat. I didn't have any just straight-up America gear. People were a little bit in shock that they had pulled this all together. And the fact that we were even bidding and had a person at Subbees bidding on our behalf in the course of six days, I think that was wild. $30 million with Brooke Lampley. $30 million now is bid with Brooke. It's Brooke's bid at Subbees.

At $30 million with Brooke Lampley. Brooke, the bid is yours at $30. If you say $31. So in the room at Sotheby's, the actual bidding was being done by two Sotheby's employees, acting on behalf of the real bidders. One thing the Dow audience was not clear on was actually a pretty fundamental question. Of the two Sotheby's employees in the room, which one was actually representing them?

There's never consensus, but a lot of people lean towards Brooke Lampley, which just seemed right. Brooke was this young, striking woman. She kind of had the Michaela Maroney smirk the whole time. ...million dollars. So Brooke Lampley at...

31. David Schrader at $31 million. At 31. With David at 31. Plus the other proxy, the other Sotheby's employee in the room, just so perfectly seemed to represent everything Constitution doubt was fighting against. This guy, this guy was so perfectly cast. His name was David Schrader.

He had a neatly shaved bald head, an expensive well-cut suit. He looked like a stylish villain from a movie about bankers who hide the vaccine for money. At 31, with David at 31. David Schrader now has a bid at $31 million. Brooks, we say 32. And whoever Schrader was bidding on behalf of, they had a lot of money. The bids with David at $31 million. Brooks, any more? It's with David Schrader at $31 million.

In the world where Brooke Lampley represented the Dow, who did David Schrader represent? Like Brooke, David also had a telephone to his ear, taking bids from someone, some mystery bidder. Sotheby's estimate for the Constitution's price had been $15 to $20 million. But the mystery bidder, like the Dow, seemed willing to spend way more than that, which was becoming a problem. Because while the Dow had $47 million, the maximum they could bid was a little over $41 million.

The core team had figured out they had to set some money aside for auction fees, transportation, storage, taxes. So the closer the number got to 41 million, the closer they were to losing this thing. Back at the core team's lair, Nicole Ruiz was actually sitting next to the guy who was placing their bids, who was on the phone with the Sotheby's rep they were seeing on the screen. He had his phone out. And so you just hear on the phone him counting numbers like,

40 million, like setting out numbers and sort of prompting him like, can you go higher? Can you go higher? Do you want to go higher? How are you feeling? Feeling good? So you could hear both sides. You could hear, you could hear the other side as well. Yeah. Yeah. And then what he was just saying, like, yes, go up. Yes. Go up. What was he saying? Yeah, pretty much. He wasn't saying a whole lot. He'd be like, yeah.

Yeah, do it. Oh, we had one other guy from the company that he worked at who was his childhood friend. And so he was sort of calming him down in the minutes up to it. They're talking about how they made pasta as kids together and all that type of stuff, which was really funny. Like he was just trying to give him a memory, like a calm memory to where he could like hide out instead of in his own anxiety. Yeah, exactly. I could not relate to anything more. It's so funny. It was really good.

David, the bid is yours at 31. Brooke, any more? David, that might have done it. David Schrader, looks like the bid is yours at $31 million then. It's fair warning, Selby. Fair warning, Brooke, at $31 million. Week 32, in time, at $32 million. Brooke, the bid is yours at 32. If somebody just stopped you and been like, Packy, why is everyone in this room doing this thing? What has this room decided is important? What would you say?

That's a really good question. One, it was the fact that everybody's talking about Web3 as this democratizing force and it's for the people and blah, blah, blah. And then this document that represents democracy and we the people and all of that comes up for auction. And so you can get

It's funny. People just get excited online about being part of a large group that is doing something powerful, especially if it's powerful and a little bit dumb.

100%. It's like once people see that's happening, they just want to be a part of that thing, which feels like I know that for you, the long-term meaningfulness of DAOs can be about stuff like

climate change and rare diseases. But the short term feels like some of it is just like, holy shit, look what we could put on the Jumbotron today. Totally, and I'm not dismissing that. I think the magic is that you could have fun doing dumb shit short term. And also as a byproduct of that, it also tests models that could be used for less dumb things and more impactful things over time. But I am not underestimating the role of that.

Having a lot of fun with internet strangers on the internet, that's fantastic. I feel like finally I'd be good at yes, yes, no all these years later. I remember listening to it then and I don't think I ever got one right because I didn't spend that much time on Twitter. I'd be really shocked if I didn't get them right at this point. There's just something about being a part of a community like that and getting the inside jokes and all that and then attaching money to it and governance and everything.

Like, all of that is just really fun. Yeah. I have this theory that, like, right now, DAOs to be successful... Because it's, like, part of what makes it successful is you need an idea. The idea has to have a little bit of audacity, enough that journalists pick it up. And then... Or at least, like, people with followings pick it up. And then a lot of other people get excited. But it's almost this sort of...

sweet spot of how audacious it is. Like the, one of the ones that I watched sort of, I mean, not sort of, completely fail was the Cryptoland thing where it was like, I'm going to buy an island. I made like a Pixar style 20 minute movie about it. We're going to have like Bitcoin mansions. Like that's an audacious idea, but it felt somehow like the wrong kind of audacious and everybody just trashed it. The video was great though. The video is one of my favorite pieces of media. Yeah.

It really meant a lot to me. I was having a rough week. I was like, this helped. It was so good. I thought one of the coolest things about Constitution Now is if you looked at

The Juicebox page, the notes that people were leaving when they made their contributions were really touching. They were like, I'm a first-generation immigrant. This country means so much to me. I can't believe that I have all the opportunities that I have, so of course I want to participate in buying this document with you, et cetera, et cetera, et cetera. It's so funny, though, because I totally agree. It's completely moving. It also is very confusing because it's sort of like,

First generation immigrant who loves this country so much, me and some internet strangers are going to buy a copy of the Constitution. It's funny. I mean, I don't know. It's like a very cliche move also to be like, you know, to reductio ad absurdum everything here. But I don't know, like, yeah, it's a copy of the Constitution, but it's buying this thing together with a group of people that represents democracy and all the things that you love about this country. And like, I don't know, everything's kind of made up anyway. Yeah.

I think I do actually agree with Paci that democracy was being represented here. I just... I'm not always sure. It's not that I... I guess... Is there any idea as beautiful in theory, but as stomach-lurchingly rickety in practice as actual democracy? Back at the auction, while the bidders battled it out in increments of tens of millions of dollars, the video's live comments box showcased the anarchic, crazed part of democracy as it is actually practiced.

The commenters were not coolly discussing America's grand tradition as a republic. They were screaming their heads off. It was an endless scroll of cheering, jeering, paranoid screeds, and truly lunatic plans for the country's founding document. One person commanded, Nicolas Cage should be nominated as the primary guardian of this document. Another person said, let's burn the Constitution and turn it into an NFT. Someone else agreed, let's smoke it. Someone asked, why not burn it?

A calmer voice chimed in, anyone want to not burn it? And the compromise solution was proposed. Let's not burn the Constitution and turn it into an NFT. These were the people that the core team had been essentially wrangling for the past six days.

Certainly the ability to have democracy without total chaos is one of the interesting things about DAOs. I mean, it's part of what stresses me out about DAOs. It's like groups of people stress me out. Group projects stress me out a lot. Totally. They can go badly. Yeah.

Do you feel that when you're looking at these dows? Do you ever feel a sense of panic? Oh my God, yeah. The difference between...

being the core contributor channels in the Discord and then the general channel in the Discord was night and day. And this is why you progressively decentralize and you don't just open it up immediately. Because it was peaceful and the most well-run startup you've seen in the background. Everyone just having a daily stand-in, getting their tasks and going and doing those tasks and then checking in and getting help when needed in the core contributor group. And then the main Discord was like,

When Token, all the things that DAOs get shit on for was happening in that main group and it was total chaos and there's no way that you could possibly keep up with it. And people are guessing the bad intentions of the organizers and all of that kind of stuff when those bad intentions didn't exist but just groups can take on a mind of their own. Which is why I do think it makes sense to really figure out...

what the structures are before fully decentralizing, like Constitution doubted, which was an intentional decision because had we just said, all right, everybody has a vote now, what are we going to do? We would have had someone wearing a 69-man costume go to Subbees and

and replace Brooke as our bidder. It can get out of control if you don't have the right kind of framework in place from the beginning. The point is not that it's fully democratic in everything, it's that people have more of a say and more ownership, particularly over time as the product is more mature and doesn't rely on that kind of coordination or product vision from one person or a small group of people.

I find constitution now confusing the way I find crypto confusing. Which, I mean, not just the jargon or the technology or the math of it all, but also just how to feel about it. It's confounding. Crypto is a populist movement opposed to big banks and central power, but some of its ringleaders and most excited cheerleaders are VCs. It doesn't really fit into the arguments or alignments that I'm used to seeing.

I understand why someone like Packy can look at Constitution Day and see a new form of joyfully absurd populism asserting itself. I also understand why someone would just see a bunch of internet gamblers buying our country's founding document to entice more people into a Borgesian online casino where everyone gambles on increasingly abstract concepts and the house is actually just other gamblers who got there first. I don't know which opinion is right, or really if there's any right opinion at all.

The only thing I know for sure is that making any big pronouncements or predictions about what this is or where it's going seems like a great way to look stupid when it all changes again in five minutes. So instead, how about I just tell you the identity of the person who was bidding so aggressively against the Dow? Why don't I just tell you about the mystery bidder?

I have become more involved in politics over the years because I'm trying to protect the American dream. I'm trying to protect the opportunity that everyone in this country should have to have a great life, a great education, and to have a life well-lived. That is multi-billionaire Ken Griffin, 45th richest person in America, second richest person in Illinois, hater of internet populism. The guy who bailed out Wall Street when Redditors were beating them up with GameStop stock?

You just heard him speaking at an event a month before the auction where, conveniently, someone asked him the question I've learned derails every dinner in 2022. Ken, what do you think about cryptocurrency? Do you believe in crypto? And even if you don't, Ken, should your businesses be active investors or traders in crypto anyway? That is a great question. So first and foremost, I wish all this passion and energy that went into crypto was directed towards making the United States stronger.

I mean, let's face it. It's a jihadist call that we don't believe in the dollar. A jihadist call that we don't believe in the dollar. That is mystery bidder Ken Griffin. Griffin was a person motivated not just by a desire to own the Constitution, but by an understanding of what it was Constitution Dow was trying to say. He disagreed with them. And he was disagreeing with them in one of the oldest, clearest languages America has. Money.

The bid is with David at $40 million. Nice round number. Brooke, it is not yours with David Schrader at $40. In this moment in the auction, the Dow does not know that they are bidding against Ken Griffin. He was simply the mystery bidder. All they know is that somehow, six minutes into the auction, the cost of an old scrap of paper had reached $40 million. The Dow doesn't have much money left. All eyes are on Brooke Lampley, the person bidding on behalf of the Dow, we think.

Waiting for you if you'd like it at $40 million with David. Again, 41 to be next. 40 million. Brooke? Quig Brunig, hands folded on the podium, looks at Brooke. So we're still thinking about it, but maybe that might have done it. David, the bid is yours at 40 million. It is not yours, Brooke. We can bring the hammer up again. Brooke's on the phone. She gestures with her hand to hold. Increase the drama one more time. At $40 million. David, the bid is yours. 41 million.

with Brooke at $41 million. Brooke raises her hand. $41 million, she has it. Just in time at $41 million, Brooke Lampley, the bid is yours at $41. So Schrader, what shall we say? At $41 million, it is Brooke's bid at $41. It's ahead of your phone. It's with Brooke at $41 million. Just watching this is nerve-wracking. Quake looks at David. David's hand is on the phone. He does not look up. This historic document with Brooke Lampley's bid at $41 million.

viewed around the country at 41. No? Are we sure? David finally looks up and shakes his head side to side. No. At $41 million, Brooke, looks like congratulations are in order to your bidder. David, you're out. Anyone else welcome to jump in, but Brooke Lampley, the bid is yours for the United States Constitution at $41 million. Sold. $41 million. Prattled. 4-1-1. Congratulations.

It was over. Brooke Lampley still holding the phone to her ear, now smiling like a cat who ate a canary. In the YouTube comments box, people are still arguing about whether or not they've won, whether Brooke had indeed represented them. Someone says, yes, yes, we did it, followed immediately by someone who says, oh, no, no, no, no, no, no, no. The most important thing and the funniest thing about DAOs is that they are decentralized. No CEO, no gods, no masters.

So what happened next? A couple DAO members, not the core team, started celebrating. They opened up an audio chat room on Twitter to members of the press. A reporter from Motherboard recorded it.

He said he'd just gotten a text from one of his friends who was higher up in the DAO. They'd won.

I literally want to cry. We fucking did it. We won it. We're going to make it. She said, we did it. I confirmed from the team. We won the auction. Ladies and gentlemen, congratulations. We're going to make it. Let's just take a quick pause for a second. Just soak it in for one second. History was made.

Another Dow member said, maybe it was time to consider the next auction. Maybe we do the declaration next, I don't know. They were giddy, they were taking questions, these random Dow members who had appointed themselves revolutionary spokespeople, but they'd made a mistake. Their assumption had been that Brooke was their proxy. She seemed like their proxy, but nobody really confirmed it.

And then another text came in. Yo, I've been texting my friend who's on the Multisig and she says that they didn't get it. I just got reconfirmed. So we did not win this, ladies and gentlemen, but it's still history in the action because we really opened up the Pandora's box. I want you guys to think about we pulled enough money to actually get close to winning. We were really close to winning. Now imagine what we do is we pulled the money together for next projects. Maybe what?

NBA team? That's right. Yeah. Right? Yeah, this is just a start. I don't know if you caught what he said there. Maybe next time we buy an NBA team. This is just a start. What did it feel like when the auction was over? It felt, it still felt good. I don't really know if it was like a letdown. Like it was just such a crazy thing that we did. It felt special for sure. I don't know if it felt historic or

I mean, at the end of the day, we lost an auction to buy the Constitution. And so it's not like the world changed. I do think it was a good opportunity to show that this other structure is kind of out there and people are going to do some wild things with it. It felt very uncertain because we didn't know what was next. I think deep down, maybe we all knew. But yeah, just kind of riding the adrenaline high. After the break, Chapter 3.

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Terms and restrictions apply. See site for details. Chapter 3. After the Revolution. Deadlines. People like to complain about them. But the truth is, deadlines can, in the right circumstances, create miracles. Like, really. There's something about a good deadline that can draw a team together like a school of fish. No real boss necessary. The deadline is the boss. There's this almost ecstatic clarity of purpose that can take hold.

Up until the moment the deadline is over, at which point the whole thing falls apart like a dream. Or so I've heard. Anyway, something like that seemed to happen post-auction for Constitution Dow. Not that the team became particularly fractious. More like general miscommunication and mild disorder flourished post-auction. Part of this, I think, was related to something I actually didn't understand until pretty late in my reporting. I started to get a sense of it when I asked Nicole Ruiz this very basic question. How old are you? I'm 24.

Everything that she's done, 24 years old. And what was the age range of people on the core team? Was it a lot of people in their mid, early 20s, older, younger? Yeah, I think the youngest person might have been 16 and the oldest person might have been 35. I could have that wrong by one or two years, but I think that's about it. But so pretty young. Like young to be...

I don't know at what age this isn't true, but young to be controlling a wallet with over $40 million in it. Totally, totally. Yeah, I mean, technically, I think six people were on the multi-sig. So technically, the 16-year-old, I don't think, was one of the people who could have run away with the money. The multi-sig prevents that in general. But yes, yes, in general, a cool age range. Yeah.

I don't mention the ages of the core team here as a dig. Young people are capable of the same successes and failures as anybody else. I'm trying to get at something else here, which is that what stood out to me meeting the core team was just the motleyness of the crew. Finance people, coders, medium-tier meme lords, a motley crew of people, many of whom were doing jobs that either were not their expertise or were perhaps several promotions past where they would have been at a regular organization.

And what had kept this school of fish together was velocity itself, the speed they had to work at. But now that velocity was gone, and what remained was a group of young, exhausted people with a delicate and thorny problem to solve. The money. What was to be done about all the money? $47 million of donated Ethereum collected from just under 20,000 people, medium contribution, 200 bucks. It all had to be refunded to that raucous crowd of DAO contributors.

The core team had promised to do it. But in the days after the auction, there were conflicting messages about how exactly that refund process would work. By the end of the week, what they said was, yes, there would be refunds, but the DAO would not cover the Ethereum gas fees, which are expensive. It meant that there were people who had donated $20 or $50 who were now understanding that the fees on their refunds would exceed the refunds themselves. And they were angry. Angry about the money, angry about the communication around it.

I asked Brian Wagner, another core team member about this. I think they're both reasonable criticisms.

But like communication, like certainly could have been better in the days after we lost the auction. But we also like, we were basically telling people like, we're figuring out what we're capable of doing next, just as people and we need a minute. And we didn't know. And I spent a Saturday with like one or two other folks on the team, like trying to estimate the costs of different ways that we could refund this money. And it was just, it's expensive. And there was no getting around that.

And so we were kind of like, well, we got to make this available like as soon as we can. We can't just like hold on to these people's money like that's not OK. And and we probably should have done a better job of educating people about this. And here we are. Do you feel like you learned that it's more fun to start a revolution than to govern?

Yeah, 100%. It is like pretty much like, there was certainly an element of like, like the like dog chasing the car situation. Yeah, like you caught the bumper and now what do you do? Like, like we're on it like, oh, like it's really hard to like manage all these viewpoints. Frustration with the Dow seemed to reach its peak the Sunday after the auction and crested through the following week.

But over Thanksgiving weekend, it disappeared in the face of something unexpected and deeply hilarious. On December 1st, the headline in Forbes read, Instead, they birthed another hyped-up meme coin. That coin was the People Token, the coin that ConstitutionDAO had given its contributors as a share in the DAO. Should have been nearly worthless, since the group had failed to acquire the asset that would have backed it, the United States Constitution.

But now, for reasons no one was entirely clear on, a bunch of traders suddenly wanted to buy that coin. A lot of this interest was coming from crypto traders in China. The best rumor I heard explaining this was that crypto in China is considered anti-Chinese government. These investors may have liked a coin whose symbolic value was tied to democratic revolution. Who knows? But whatever the cause, the price of the People token shot up. Way up.

at its height a 3,700% increase, which meant that the small investors in ConstitutionDAO, the people who had not been able to get their refunds, they had now won a minor lottery. Here's Packey. And then, lo and behold, those people were the lucky ones because I, like an idiot, took my ETH back and missed out on the pop.

But the people who had to keep their $50 in because it didn't make sense to take it out, all of a sudden their $50 was worth $2,000 within a week. It's so dumb. It's so dumb.

I mean, I know people who made like a couple hundred thousand dollars by accidentally like leaving. I would have made, I put five ETH in. I would have made, I think at the peak, something like $900,000 had I just like waited a day to refund my money. Oh my God. Yeah. It doesn't bother you. There's so many of these like things here. Yeah. In the end, Packy left Constitution Down the way he entered it. A crypto enthusiast with a good story about the fortune that he'd almost won.

That is our story on Crypto Island this week. A disclaimer, if I have accidentally given you the impression that you should run out and start investing in a weird crypto project, please do not do that. This is a very hard to navigate space. I am puzzling it out one story at a time. And if you're along with me on this series, if you're learning from me, just don't. Nothing here makes sense. Nothing is fixed.

On that note, mystery bidder Ken Griffin, the billionaire who won the Constitution, announced this month that his firm will now start investing in cryptocurrency. That old jihadist call against the dollar. Everything changes, man. On the next episode of Crypto Island, which will be out in just a couple days, we meet Miguel in the Russian nesting doll of characters that I got to meet through this story. Maybe my favorite.

This episode of Crypto Island was produced and edited by Shruti Pidmaneni. Fact-checking by Elizabeth Moss. Sound design and mixing from Stephen Jackson and Phil Demachowski at The Audio Non-Visual Company. Theme song by Christine Andrews. That recording of the Twitter Spaces Conference was courtesy of Motherboard. The team at Motherboard has a new project out called Crypto Land. I know, the names are similar, but Crypto Land is a film documentary miniseries. The first episode is available now online. Go check it out.

Also, this series, Crypto Island, when you're listening to, I was able to make it on my own because of Descript, an audio editing program that has not paid me to say any of these words. I just want to shout out Kevin O'Connell at Descript for his personalized tutorials. And thank you for listening. See you soon. Save on Cox Internet when you add Cox Mobile and get fiber-powered internet at home and unbeatable 5G reliability on the go.

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