It is perhaps due to the high gas fees with the ETH price volatility and showing the total amount funded publicly which costed them since they were unable to afford the additional auction costs.
Perhaps better alternative blockchains that are designed to scale with very low transaction fees and support smart contracts with EVM compatibility, would have been better for this use case.
Clearly Ethereum has let down the web3 crowd once again on this occasion. What a shame.
Beside maybe a legal obligation that people would have to take them to court over to sort out, no better than a gofundme/kickstarter.
From the great Daily Gwei newsletter: "To do this sort of capital formation in the traditional finance world, you’d have to use centralized payment processors (who would most likely censor you), it’d be extremely slow, the money raised would be much less and the raise itself would be very exclusionary. You also couldn’t create a DAO out of it and have it be governed by token holders - the traditional system is just not set up to do this in any practical way. ... In saying all of this, it’s not just the rapid capital formation aspect of DAOs that fascinate me - it’s also the rapid social coordination that can form around a common goal. It has a flywheel effect to it too: more capital raised > more social credibility/marketing the DAO obtains > more capital comes in because of that and so on and so forth. This is why ConstitutionDAO has gone from $0 to over $40 million in less than a week - this is really the true power of a global, decentralized and censorship-resistant internet-native economy - built on Ethereum and powered by humans."
If you don't agree or see that this is qualitatively different from "any other fund raiser", I don't know what else to say. What other examples do you have of spinning up $40M in short order for something like this? It's a qualitative difference in speed, scale, decentralization, etc., that will continue to grow. This is just the start.
> "To do this sort of capital formation in the traditional finance world, you’d have to use centralized payment processors..."
Oh no. Anyways.
> "... (who would most likely censor you) ..."
Got any examples top of mind? I sure don't. Unless you're on the OFAC list which again, shrug.
> "... it’d be extremely slow ..."
Would it? Wires seem to be faster than Bitcoin by a country mile. Faster than ETH last time I ran one too, and with RTP and FedNow, that bar goes down further - should be as fast as Solana if not faster.
> "... the money raised would be much less ..."
Because it would be real money, not play money. Tokens are closer to frequent flyer miles in people's minds.
> "... and the raise itself would be very exclusionary."
If you mean "open to accredited investors" well, I'm ok with that.
> "You also couldn’t create a DAO out of it and have it be governed by token holders - the traditional system is just not set up to do this in any practical way."
You can't govern the same way via a set of non-binding twitter polls? Or like a SurveyMonkey thing?
For example: a simple smart contract could be set up by 1000 parties that share the same goal (but may not share a mutual trust) across the globe to say that “the funds in this wallet are locked for 1 year. After 1 year, contributors can vote on whether to unlock the funds (make them redeemable) or re-lock them for another year.”
Rather than placing trust in complex legal structures across countries, centralized payment processors & currency exchanges, the security & accuracy of voting procedures like SpiderMonkey, and the goodwill of all other contributors, the trust can be placed in the contract code and security of the chain.
This does not automatically make it better, nor does it mean it is impervious to problems (like bugs in the contract), but it is a different system that is not easily & transparently achievable via traditional means, and certainly not in a matter of days by simply using a web application (Juicebox).
We could stand for some competition in rule making, but the current rule makers would need to cede some control.
The laws around setting up and participating in DAOs are still being defined, but at the moment it is more accessible than creating the same procedures through traditional legal contracts. Maybe that will change.
> If you mean "open to accredited investors" well, I'm ok with that.
How dare you. Drug lords and ransomware writers have as much rights to buy the US constitution as everybody else. It's their hard-earned money, they should be able to use it however they want. /s
Criminals are traditionally the opposite and have "legitimate" funds that they have washed through and through using the existing financial system.