Constitution DAO, Rittenhouse trial coverage, private sector efficiency vs the government

After a short comic open about a kid's birthday party, YouTubers and the show passing its 56th episode, the hosts turn to the week's crypto story. A host explains that ConstitutionDAO, a decentralized autonomous organization, formed in about a week and raised roughly $46 million in ETH to bid on one of 13 copies of the US Constitution at Sotheby's. He describes a DAO as a corporate-like structure written in code, assembled in a Discord via a smart contract, with governance and voting power encoded, with nearly 20,000 participants.

He recounts the chaotic auction: about 80% of the money came in the last 48 hours, the bidding ran up to around $41 million with Sotheby's representatives on the phone, and CoinDesk incorrectly reported the DAO had won before the group confirmed it had lost. He notes the group had said it needed roughly $14 million to participate, $30 million to be competitive and $40 million for a strong chance, and complains about high gas fees, with people paying $30 to $50 to donate around $200. One host quips they should have used Solana.

The hosts joke about what the winners would have done with the document and debate why the Constitution sold for so little, with one calling it the "Magna Carta" of the best startup ever created and noting there are 13 copies of this post-signing printing. Several say they do not understand the hype. The valuations and the "best startup" framing are jokes and personal takes.

One host argues the real significance is that DAOs are a genuine breakthrough beyond crypto's earlier use cases of money transfer, store of value and NFTs, because tens of millions of dollars can be assembled and deployed within 48 hours. Another counters by comparing DAOs to ICOs, which he says were banned, and asks how a DAO differs. The reply is that DAOs have programmable governance, making them a programmable corporate entity. These are the hosts' competing characterizations.

A host warns that if these structures transfer ownership interests, they will be regulated like securities, and others agree this is a key point. One notes this particular effort was framed as a nonprofit taking donations rather than selling equity, so participants were not literally buying a share. A host predicts activity will move outside the US first, leaving the country behind on crypto. These are predictions and legal opinions, not settled outcomes.

A host likens DAOs to how Airbnb and Uber bent the rules, saying DAOs are effectively pushing against securities laws and that donors may have thought they were buying part of the Constitution. He argues the episode showed the SEC a huge appetite for quickly pooling small amounts of capital to do something interesting. Another host disagrees, saying this is just another on-ramp to fractionalized ownership whose demand predates DAOs, and that, like most fractional ownership of "crappy assets," it was a poor financial trade because the underlying asset had near-zero chance of meaningful appreciation.

He adds that whether through a DAO or an LLC is irrelevant if the underlying asset makes no sense, and suggests the organizers should have consulted people who know art and crypto to pick an asset that could actually appreciate. He also suggests that if the asset had appreciated, it would have better proven the questions the host was raising. The source breaks off here as the hosts begin to question the participants' sophistication.

A host wonders whether the organizers chose a collectible precisely because it is explicitly exempt from securities laws, which, if true, would limit how broadly DAOs can apply. He contrasts that with what he thinks people actually want: programmable corporations with shareholder rights expressed through tokens, a digital version of the analog machinery of share certificates and shareholder meetings that, as another host jokes, almost no one attends. This is the hosts' speculation about design constraints.