The Bidding War

Hi, search engine listeners.

This is PJ Vote.

I hope you're having a cool summer.

Over the next four weeks, I want to take you back in time to a very strange moment in our very recent history.

The year was 2022.

The prices of various cryptocurrencies had smashed through the ozone layer.

And if you were trying to figure out what was going on and you went online, you'd encounter two kinds of people.

Either a person claiming to have gotten rich off crypto, telling you to buy now before it was too late, or one of the people who overnight had amassed large online followings by relentlessly explaining how all of this was a farce.

A bunch of planet-burning scammers trying to separate you from your money with useless Ponzi technology.

As a person who just wanted to understand what was happening and why, I found the internet even less useful than usual.

So we decided to do our own research.

I didn't want to know if crypto was good or bad.

I mean, it was internet money.

What I wanted to know was why this was happening.

What, if anything, it meant for a society to suddenly both worship and feud over internet money.

The result was a nine-part series called Crypto Island.

That mini-series was also the precursor to Search Engine, where we found the voice for this show.

We tried to strengthen our capacity to be curious and open-minded in the face of a polarizing topic.

And in the process, we found some great stories.

Classic internet capers in a lysurgic new chapter of Life Online.

We investigated NFT kidnappings, met apocalyptic crypto believers preparing for the next world war.

We wound up at one point on a melting glacier in Greenland.

More adventures, honestly, than I'd planned for.

So this month, while we work on season two of Search Engine, we're going to play you our favorite four episodes of Crypto Island.

I love these stories.

I'm so happy to share them with you.

Please enjoy this first one, which takes place fully inside a Sotheby's auction, where two parties are fighting to own this nation's founding document.

That's after some Samad's.

Chapter 1, American History.

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 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 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 Shalice.

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'd 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 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 Constitution Dow is raising money using a digital crypto wallet in hopes of securing the winning bid.

Joining us is Constitution Dow.

Crypto investors buying the Constitution.

I'll be honest with you.

When I first heard about all this, my reaction was, come on, guys.

Like, 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.

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 got 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 Frankenstein together.

So a DAO starts out as a crowdfunding campaign.

Like, 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,

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 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 DAO.

Maybe you've heard of Spice DAO.

This is one that took place at a Christie's auction instead of Sotheby's, and instead of trying to buy the Constitution, this DAO 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.

Chrissy'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 fries dow is obviously uh we're all here because we're keen to do a little of a acquisition of a franchise um most like it most likely a fast food franchise um that so recently i found myself embedded in the discord server for a dow who had not yet really announced themselves to the world fries dow

this is tape from an ama where they're pitching themselves to potential investors

internet randos crypto degenerates they wanted nine point six nine million dollars so they could start buying individual fast food franchises across america uh you know the four of us here where it's not like we're gonna just pick a subway and be like this is it this is it guys everyone is gonna buy the subway in the middle of nowhere um we're We're probably going to have candidate choices and we'll run that, those considerations with the governance

votes from the community.

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 FriesDAO 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, Popeyes 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 a Jimmy John's, you can get in there within 45 to 60 days.

Baskin' Robins, things like that.

It's somewhere between a business plan and invasion orders.

Like how they are 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.

Flipping 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 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 basket robbins via internet democracy what level of decision are we actually going to be able to vote on um 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 QA, 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?

And what about some wild stuff, like making it free or hiring like ex-felons and such?

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 with capitalism.

By this point, 3,000, 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 Packy 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.

So it's kind of the biggest categories that I 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.

You're doing right.

I was like, those are a bunch of terms that sound smart and like they have to do with money.

Yeah, not foreign capital invests in tech companies, both kind of web two and web three.

So one of my big questions has just been, who are the brains behind these DAOs?

Who's actually on these core teams?

And I've been reading a lot of stuff, crypto, Twitter, different newsletters.

Packy's newsletter had stood out.

He was just one of those rare writers who really was deep in the material, but didn't seem completely entranced by it.

I didn't realize this until we talked, but I think part of the reason I maybe vibed with it was just he was also kind of a newcomer.

I really got back into crypto earlier in 2021 after being away from the space for eight years because I was mad at myself for selling Bitcoin in 2013, like a life-changing amount of Bitcoin.

A life-changing amount.

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, you know, like $2.5 million worth of Bitcoin or something that I sold.

Oh, I would call that a life-changing thing.

Yeah, because I'm so sorry.

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,

you know, 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, you know, I came into it trying to say, like, all right, cool.

Crypto seems really interesting and Web3 seems very, very interesting.

And like, you know, what are the kind of fundamentals here?

And like, how does this actually help you build a better product for customers and all of that, as opposed to approaching it like a religion?

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 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 public biotech stack.

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'd wanted to talk to Packy is that Packy had been centrally involved in Constitution DAO, the DAO that was trying to buy 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 Constitution DAO.

What else?

I'm an investor as my day job, but I like going down internet rabbit holes and Constitution DAO was one of them.

What was your week like in Constitution DAO 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.

And 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 then 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 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 in 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, 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 does a fundraiser for something like Selevi's even look like?

You know, there were people who are actually kind of 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.

Kind of an outsider on the inside, kind of explaining what was going on.

You were like a participant observer.

Participant observer is a great way of putting

Over the course of that week, the core team managed to sell this idea of Constitution DAO to almost 20,000 people, including Grimes, although she would join Spice DAO 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.

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Welcome back to the show.

Good evening from Southeast 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 Liechtenstein.

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 bids 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 WAGBTC.

We're all going to buy the Constitution over and over.

Someone makes an NFT joke.

The Constitution's a copy, right?

You just right-click, save as

at 13 million now 14 million bits here with me at 14 million dollars at 14

30 million dollars with brooke lambley 30 million dollars that was bid with brooklyn 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 hyped, like an hour in advance.

So that was, it was very good energy.

Yeah, people are excited.

I mean, like, people were, 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, I think, 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 Subbeys bidding on our behalf in the course of six days.

I think that was that was wild.

$30 million with Brooke Lampley, $30 million down his bid with Brooke is Brooks bid at 30.

At 30 million dollars with Brooke Lampley.

Brooke, the bid is yours at 30.

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 leaned towards Brooke Lampley, which just seemed right.

Brooke was this young, striking woman.

She kind of had the Michaela Maroney smirk the whole time.

$1 million with 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 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.

Brooke, should we say 32.

And whoever Schrader was bidding on behalf of, they had a lot of money.

The bids with David at $31 million.

Brooke, anymore?

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.

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 he, you could just hear on the phone, like him counting numbers, like

40 million, like setting out numbers and sort of prompting him.

And 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, yeah.

That's so great.

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, 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 is 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 was so funny.

It was really good.

David, the bid is yours at 31.

Brooke, anymore?

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 Vitas Yours, at 32.

If somebody just stopped and been like, Packy, like, why is everyone in this room doing this thing?

Like, what has this room decided is important?

Like, what would you say?

That's a really question.

One, it was the fact that, you know, everybody's talking about Web3 is this democratizing force and, you know, it's for the people and blah, blah, 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 a group of, you know, what ended up being almost 20,000 internet strangers to come together to buy this document together.

It was like too much to pass up on and too kind of beautiful of a symbol to miss out on.

It's like, it's funny.

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

100%.

It's like once people see that's happening, 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 is about, can be about stuff like climate change and rare diseases.

But like the short term feels like some of it's 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 can, you could have fun doing dumb shit short term.

And also as like a byproduct of that, it also gives, you know, like it tests models that could be used for less dumb things and more impactful things over time.

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.

I think I do actually agree with Packy that democracy was being represented here.

I just, I'm not always sure.

It's not that I,

I guess,

is 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, Nicholas 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.

The raucous voice of real democracy, with the core team functioning almost like a Congress.

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 is like groups of people stress me out.

Group projects stress me out a lot.

Totally.

They can go badly.

Do you feel that when you're looking at these DAOs?

Like, do you feel it?

Do you ever feel a sense of panic?

Oh, my God.

Yeah.

I mean, you know, sitting the difference between

being kind of like 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 like peaceful and like the most kind of well-run startup you've seen in the background.

Like everyone just like having a daily stand-in, getting their tasks, and like 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, like, you know, all the things that DAOs get get shit on for was happening in that main group.

And it was like total chaos, and there's no way that you could possibly keep up with it.

And people are guessing like the bad intentions of the organizers and like all of that kind of stuff.

And like those bad intentions didn't exist, but just groups can kind of take on a mind of their own, Which is why I do think it like makes sense to really figure out kind of like what the structures are before fully decentralizing, like Constitution doubted, which was an intentional decision because had we just said, like, all right, everybody has like a vote now, what are we going to do?

Like, you know, we would have had someone wearing like a 69-man costume go to Sudby's

and like replace Brooke as our bidder.

You know, like 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 like 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 like either, you know, coordination or product vision from one person or a small group of people.

I find Constitutional confusing the way I find crypto confusing.

By 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 DAO 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 Borghesian 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 dollars.

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 dollars, Brooke Lamply.

The bid is yours at 41.

Sir Schrader, what shall we say?

At 41 million dollars, 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.

Quig 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, dollars 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 dollars sold 41 million dollars battled 411

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 of 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.

I'd like to welcome all the media outlets that are in the space, brand.

I see you, Team VC, I see see you, Canon, I see you, uh, Fortune magazine, I see all the different media outlets.

You are in the right spaces right now, ladies and gentlemen.

You are in the history.

Imagine this 10 years ago for when you heard about Bitcoin.

This is right now with what is happening with the Constitution Dow, it is history.

He said he just gotten a text from one of his friends who is higher up in the Dow.

They'd won.

I literally want to cry.

We did it.

We won it.

We're going to make it.

She said, W and we did it.

I confirmed from the team, we won the auction, ladies and gentlemen.

congratulations

we're gonna make

let's just take a 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 brooch was their proxy she seemed like their proxy but nobody really confirmed it

and then another text came in yeah

um but yo but i i i've been i've been texting um my friend who's on the multi-sick and she says that they didn't get yeah 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 to pandora's box i want you guys to think about we pulled enough money to actually to get close to winning.

We were really close to winning.

Now, imagine what we do.

We pull 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 that

we did.

It felt special for sure.

I don't know if it felt historic.

I mean, at the end of the day, we lost an auction to buy the Constitution.

Um, and so it's not like the world change.

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's 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 three

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Charlie Sheeton is an icon of decadence.

I lit the fuse and my life turns into everything it wasn't supposed to be.

He's going the distance.

He was the highest paid TV star of all time.

When it started to change, it was quick.

He kept saying, no, no, no, I'm in the hospital now, but next week I'll be ready for the show.

Now, Charlie's sober.

He's going to tell you the truth.

How do I present this with any class?

I think we're past that, Charlie.

We're past that, yeah.

Somebody call action.

Aka Charlie Sheen, only on Netflix, September 10th.

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 DAO.

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 like the age range of people on the core team?

Were you like, 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 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, technically, I think six people were on the multi-sig.

So technically,

they weren't, the 16-year-old I don't think was one of the people who could have run away with the money.

You know, the multi-sig prevents that in general.

But yes, yes, in general, you know, a cool age

range.

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 motliness 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 bucks 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 mean, I think they're both reasonable criticisms.

Like,

the like communication

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 okay.

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%.

And it's like very 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?

Yeah, like, like, we're on it.

Like, oh, like, it's really hard to like manage all these viewpoints.

Frustration with the DAO 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, Crypto investors wanted to buy the Constitution.

Instead, they birthed another hyped-up meme coin.

That coin was the people token.

The coin that Constitution DAO 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 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 Constitution DAO, the people who had not been able to get their refunds, they had now won a minor lottery.

Here's Packy.

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

so dumb

so dumb

i mean i know people who made like a couple hundred thousand dollars by accidentally like leaving i i i would have made i put five eth in i would have made i think at the peak something like nine hundred thousand dollars 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 Dow 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.

We first aired that story in 2022.

Since then, Ken Griffin still owns the Constitution.

He's loaned it to the Crystal Bridges Museum in Bentonville, Arkansas.

You could go see it there.

Nicole Ruiz is not working on any crypto projects now.

She's a stay-at-home mom trying to build a big homeschooling community in Brooklyn.

Packy McCormick, still in crypto.

His newsletter, not boring, is going strong.

This episode of Crypto Island was produced and edited by Shruti Pinamaneni, fact-checking by Elizabeth Moss, sound design and mixing from Stephen Jackson and Phil Demahowski at the Audio Non-Visual Company.

Theme song by Christine Andrews.

See you next week.