ConstitutionDAO Points to the Rise of DAOs in 2022
With the growing popularity of crypto-asset investment, investors’ interest in new crypto projects is growing. Beginning with the DeFi boom in the summer of 2020, the price of cryptocurrencies rebounded strongly. Then NFTs began to enter the public eye, and finally with the metaverse and DAOs in 2021, the crypto investment field has become increasingly attractive.
This series of changes has led investors to believe that crypto-assets can provide good investment returns, particularly for new projects that play a critical role in crypto-asset investment. BigONE, as a leading participant, is always on the lookout for innovative projects in the crypto industry. If 2021 is the first big year for the metaverse and NFTs, BigONE believes that in 2022, DAOs will become a new trend, and we will all witness the rise of DAOs.
To clarify, DAO is an abbreviation for decentralized autonomous organization. This organization could be a project, a platform, a community, or in theory the entire world. DAOs refer to a new type of blockchain- based governance structure that works in tandem with existing economic organizations such as the mainstream corporate system. The rules of the DAO are not managed by a small group of executives but are written in code and executed by the computer network that runs the software. Simply put, DAO participants are self-organized workers who are governed by software and code. This means that the rules are the same for everyone and cannot be easily changed, similar to the democratic belief that “everyone is equal”. As a result, some people refer to the DAO’s decentralization as a democratic form of autonomy.
With the emergence of the DAO, any planned reform plan needs to be decided by all participants rather than a group of decision-makers. Rather than relying on manual intervention, all votes are automatically counted and executed by the software. This eliminates the possibility of improper vote management or tampering with vote counts, resulting in complete transparency and visibility. Because there is no longer a need to trust other DAO participants, the DAO can be made up of many people who do not know each other. In other words, DAO can go above and beyond physical constraints to ensure that all parties are working for the benefit of the project itself.
In fact, DAOs are not a new concept, it’s one we are all familiar with it in the crypto industry. Consider what this means — after an anonymous founder creates a project, he or she does not need to expend any energy to maintain it. The DAO founder has no workplace and no employees, but the project continues to run quietly because a group of people who believe in the project contribute to it. The anonymous founder vanishes, and no employee is hired. However, more than a decade later, this DAO-based project has a market value of $1.3 trillion, making it one of the world’s top five company in terms of market value. I’m sure you’ve guessed the name of this company based on this decentralized principle. Yes, Bitcoin is the most successful DAO right now, and its founder is the anonymous Satoshi Nakamoto. There is no boss or employees to manipulate, and all such organizations operate autonomously and anonymously. This is DAO’s core value.
In the cryptocurrency industry, investors will prefer innovative projects with appreciation potential over traditional projects, and the launch of DAO-related projects are fast being sought after by many investors. As a key example, BigONE has recently listed the popular ConstitutionDAO’s PEOPLE token. Let’s look at what makes it unique and why it’s so popular.
ConstitutionDAO was founded on November 11, 2021, by a group of cryptocurrency enthusiasts. Its creators hoped to raise funds through the DAO method in order to purchase a copy of the US Constitution that was being auctioned off by Sotheby’s. To realize the great dream of “putting the Constitution in the hands of the people,” the auction house auctioned off a copy of the first edition of the US Constitution. ConstitutionDAO quickly became the focus of attention in the cryptocurrency field and beyond, attracting the support of over 17,000 donors as a result of this great dream. ConstitutionDAO took just nine days to successfully raise approximately 11,000 ETH, which is worth more than $47 million and was used to bid in an auction for a copy of the first edition of the constitution.
How was the ConstitutionDAO designed to work?
First and foremost, ConstitutionDAO would be in charge of the copy of the Constitution. Donors purchased a certain amount of ETH to obtain the corresponding ConstitutionDAO token PEOPLE during the fundraising process for ConstitutionDAO. The exchange rate of ETH to PEOPLE was one million to one. In the ConstitutionDAO ecosystem, the PEOPLE token served as the governance token. Voting determined the use of the copy of the Constitution, including exhibition venues and methods. The number of tokens held determined the voting weight. PEOPLE tokens, on the other hand, did not represent actual ownership of this copy of the constitution.
Secondly, the ETH raised by ConstitutionDAO would be used to pay for the auction, with no subsequent ETH redemption. As a result, PEOPLE tokens would not have a fixed price in relation to ETH. The main value of the PEOPLE tokens was derived from the right to govern a copy of the Constitution, so any valuation was speculative.
Finally, the core project sponsoring team still wielded power over ConstitutionDAO. Participants in the ConstitutionDAO ecosystem would likely follow the opinions and decisions of the project launching team if a copy of the Constitution was successfully purchased. Despite this approach some experts predicted that even if ConstitutionDAO was successful in its bid for a copy of the Constitution, it would fail eventually due to a series of more complex issues.
Even though the ConstitutionDAO auction bid did fail, the donors were able to be refunded, according to the terms of the agreement. Donors can redeem their donated ETH via the Juicebox platform, with the ETH raised being returned to the donor’s wallet in proportion to the time of donation. But many people were surprised when many donors chose not to redeem their ETH, causing the price of the PEOPLE tokens to skyrocket. The highest price of PEOPLE tokens exceeded US$0.17, an increase of approximately 40 times when compared to the approximately US$0.004 value at the time of donation. Even if the price fell back to around $0.05 later, it still represented a roughly tenfold increase. Despite the setback many believe this example points to the potential of DAOs as fundraising vehicles. According to a review of the DAO-based project by Joseph Raczynski, “The sums of money that DAOs will raise likely will be staggering, such that they could overwhelm current ownership models with a flood of money from massive numbers of private individuals interested in participating. We have seen this with ConstitutionDAO now having raised more than $40 million and counting in just six days.”
Factors as to why the price of PEOPLE tokens has skyrocketed
The failure of the auction bidding resulted in the suspension of ConstitutionDAO’s operations. As a result, there was no additional issuance of PEOPLE tokens. If it is redeemed, the number of tokens will continue to fall, resulting in PEOPLE experiencing deflation.
The price is guaranteed. The minimum exchange rate between PEOPLE and ETH when ConstitutionDAO initiates a refund is 1 million: 1. If the secondary market price is lower than this ratio, PEOPLE token holders may choose to redeem ETH using smart contracts. There is widespread agreement that the donors did not anticipate that PEOPLE would receive a significant increase in income. Their goal was to win an auction for a copy of the US Constitution. The subsequent price increase caught everyone off guard.
BigONE believes that PEOPLE has effectively evolved into a new meme-type token with an in-built price guarantee, and that its valuation method will be significantly different from previous methods. The PEOPLE token’s price will be superimposed on the value of other functions at one millionth the price of ETH. This value is determined by market participants, and it shares Bitcoin’s non-issuance characteristics. As a result, the attractiveness of PEOPLE tokens will grow in the future, and their value will rise steadily.
An official of ConstitutionDAO has now officially announced the suspension of auction operations, its token PEOPLE can be retained, and there is 0.000001 ETH as a redemption reserve that is permanently valid behind each PEOPLE. ConstitutionDAO’s popularity stems from the fact that it has enabled more people to understand what a DAO is and, for the first time, to become involved in the importance of the field of crypto assets through a DAO. Whatever path the PEOPLE token takes in the end, ConstitutionDAO’s pioneering effort to connect cryptocurrency, reality, and history will go down in history as a watershed moment.
PEOPLE can currently be purchased through the BigONE cryptocurrency exchange, and investors can use the PEOPLE/USDT liquidity pool to participate in mining to earn money. BigONE liquid mining products will begin liquid mining operations during the New Year’s holiday, and users will receive three benefits for just a single participation.
Thank you to everyone who has trusted and supported BigONE over the last four years. All of us at BigONE wish all our users a happy new year!
