ConstitutionDAO faces existential questions as a “core team” makes key decisions; high transaction fees mean ~50% of “investors” may lose the money they put in
ConstitutionDAO tried to buy the Constitution. Now it has a $40 million mess on its hands and entire refunds are being wiped out by high fees.
VICE
Context & Ripple Effects
Two days after ConstitutionDAO lost Sotheby's US Constitution auction to Kenneth Griffin's $43.2M bid, the project that crowdfunded over $40M is confronting what happens when a DAO loses its reason to exist. The WSJ had already flagged the awkward practical questions — payment, ownership, custody — before the hammer fell in its pre-auction look at the logistics.
Now those hypotheticals have turned into a real unwind: organizers say the project has run its course and will shift Discord to read-only within two weeks (the wind-down announcement), while a self-appointed "core team" is making key decisions — raising exactly the governance questions a token-holder collective was supposed to avoid.
First-order effects
Roughly half of contributors may lose their money outright: high transaction fees are eating into refunds from the $40M pool, so small holders who paid gas twice (in and out) can be wiped out entirely.
The "core team" making decisions without broad holder input puts the project's legitimacy on the line precisely when it has nothing left to deliver but refunds.
Second-order effects
Every future crowdfunded bid now has to price in exit costs — if fees can consume half of a refund, organizers must either cap contributions, batch withdrawals, or pick cheaper rails before asking the crowd for money.
The Griffin win sharpens the narrative asymmetry: a billionaire beat a 17,000-plus-person collective, which will push DAO organizers toward off-chain coordination layers rather than on-chain transactions for every participant.
Third-order effects
If the pattern holds, one-shot purpose-built DAOs get replaced by structures with pre-committed dissolution mechanics — refund schedules, treasury wind-down rules, defined decision authority — agreed before funds are raised, not improvised after a loss.
Regulators and platforms watching this unwind get a clean case study of why "decentralized" fundraising with centralized decision-making invites both consumer-harm scrutiny and governance reform inside the DAO ecosystem itself.
The trend: Crowdfunded single-purpose DAOs are colliding with their own mechanics — gas costs, informal core teams, no dissolution plan — forcing the format toward pre-agreed governance and exit rules or irrelevance.
I followed WTF is happening in the aftermath of the failed Buy the Constitution crypto project this weekend and I am here to report it is not good https://www.vice.com/...
The community of crypto investors who tried and failed to buy a copy of the U.S. Constitution last week has descended into chaos. https://www.vice.com/...
DAOs are amazing. They're the future. But they're also an organization of people. I find that people usually don't like each other very much or agree on things. https://www.vice.com/...
The #ConstitutionDAO mess is no different than meme stocks — consumers are not investing in something they believe has real value/undervalued, they are simply trying to find community and be part of a movement — sadly many losing money cannot afford to https://www.vice.com/...
(current) user unfriendliness/impractical nature of Ethereum. We donated $200 to see how this played out in practice - here's how it actually looked. To get our money back we would lose ~90% of what we put in to fees. 50% of the people who donated are in same boat https://twitter…
Crypto will liberate the people from onerous banking and finance regulations only to recreate the conditions that led to onerous banking and finance regulations in the first place https://twitter.com/...
if you lost money in the ConstitutionDAO debacle, I feel bad for you son, but I got 99 problems and a worthless governance token ain't one https://www.vice.com/...
From @ConstitutionDAO to #ConstitutionWTF... the complicated journey to a crowdfunded crypto future .. great reporting as always by @jason_koebler @motherboard https://twitter.com/...
lmao charging into a plan with no consideration for the mess it might create if reality doesn't conform to your most optimistic expectations is ... uh ... yeah that tracks https://www.vice.com/...
Web3 still has some wrinkles to smooth out. “Of the initial $200 we bought in ETH, $90 was eaten up in fees simply to donate to ConstitutionDAO.” https://www.vice.com/...
This ConstitutionDAO story is actually a pretty good entry point for people who have no idea WTF is going on because it shows that cryptofying everything is not necessary and that a lot of “decentralized” projects are not decentralized at all
SHOCKINGLY ... - setting up an org is hard - reconciling multiple viewpoints is hard - real-world is hard - Ethereum gas fees suck - doing things quickly is a recipe for disaster AND ... - crypto is hard - “web3” & “decentralized” are unrealized promises https://www.vice.com/...
🚫 Tech does not guarantee decentralization 🤑 Crypto has exorbitant fees 🤪 This stuff is a likely scam anyway If this Constitution fiasco is really a sign of what's to come, we're in for a pretty terrible future. https://www.vice.com/...
The Ethereum blockchain in its current state is a great proving ground for Proof-of-Concepts like ConstitutionDAO, but far from being ready for mainstream adoption. https://www.techmeme.com/...
Shocked. Shocked! that a huge chunk of the money ends up in the hands of financial middlemen and ETH miners (who are just more expensive financial middlemen) Well, not that shocked https://twitter.com/...
The idea that instead of forming a co-op with bylaws you can just replace it with a chat room and some stored procedures on the block chain (aka smart contracts) only works when everything is going up and to the right 📈. Once that isn't the case, people will pine for regulation.
This project, for example, would have actually been much easier (and MUCH cheaper) to administer if they had used, like, venmo or gofundme. But that's not cool and not web3 so they didn't do it. In this story you can see the current limitations of Ethereum and the
I have learned a lot more about crypto and web3 over the last few months and think it's difficult to paint with a broad brush - there are some exciting things happening and we will see “web3” and crypto happen in some form. I think that ...
- $40 million organization trying to invent a reason for itself to exist on the fly - plans being announced, changed, previous announcements are getting deleted - many wondering whether this is a scam or just mass chaos
so the $40 million raised to buy the constitution is either staying with a core group of the project's organizers, or getting eaten up by fees.. https://www.vice.com/...
Motherboard paid a $75 Ether gas fee to contribute ~$75 to ConstitutionDAO. Of the initial $200 of ETH they bought, $90 was eaten up in fees. To get a refund, they'd have to pay gas fees AGAIN, wiping out their entire investment. Many are in the same boat: https://www.vice.com/..…