A crypto collective attempted to purchase a rare copy of the US Constitution last year.
Crypto collectives known as DAOs are buying up expensive items and figuring out what to do next.
One DAO’s plans changed after it bought a famed “Dune” guidebook and ran into copyright issues.
As the tools behind DAOs evolve, so will their capabilities, said Robbie Heeger, CEO of Endaoment.
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Those crypto collectives called DAOs are buying up stuff. Expensive stuff.
Take the one-of-a-kind Wu Tang Clan album and the famed “Dune Bible,” for example. One DAO even tried to buy a copy of the US Constitution and lost. Another has set its sights on a professional basketball team, and yet another on a golf course.
But the question remains: What does a DAO do with this stuff once it buys it? The answer is often something akin to a shoot-first-ask-questions-later strategy.
By definition, a DAO, short for a decentralized autonomous organization, is simply a horde of internet friends pooling resources, usually money in the form of cryptocurrency, for a common goal. The online community generally forms on Discord or Twitter and establishes its rules through a blockchain, the same technology that backs cryptocurrencies.
“These DAOs are just people organizing capital together, and then they have to fill in the blanks about what the purpose is of what they’re buying,” said Robbie Heeger, the president and chief executive officer of Endaoment, a nonprofit focused on assisting DAOs.
These crypto collectives became popular when one pooled millions of dollars in an attempt to purchase a rare copy of the US Constitution. The DAO, however, came up short and lost the auction to hedge-fund billionaire Ken Griffin.
Others have been more successful at auction.
The SpiceDAO, for example, eventually won ownership of the $3 million “Dune Bible,” a decades-old compilation of director Alejandro Jodorowsky’s written plans for an ill-fated 10- to 15-hour film based on the “Dune” book series. The DAO announced plans for an original series based on the guidebook but soon received blowback on Twitter and in media outlets like Esquire, which noted the group doesn’t own the copyrights to do that, just the physical item.
In a Medium post, the DAO said it couldn’t reach an agreement with any of the rights holders and instead planned to pivot to creating an original piece of work.
“There’s sometimes this moment for these DAOs where they build energy, and they gather a lot of people, and they gather a lot of capital, and then the rubber meets the road on how do they exist in the real world, or how do they execute on those goals,” Heeger said.
Another crypto collective called PleasrDAO has dedicated itself to buying up digital art known as NFTs, like the famed doge meme. Then last year, the collective bid $4 million to win the auction for the Wu-Tang Clan’s one-of-a-kind album, once owned by the infamous “pharma bro” Martin Shkreli.
A DAO owning valuable items for price appreciation, Heeger said, is “enough of a reason to exist.”
He noted, however, that crypto collectives are in still in their earliest iterations. Simply stated, there’s still a lot to figure out about DAOs.
“As the tooling becomes more robust, these groups of people that make up a DAO will have more capability to do more with the assets that are controlled by the DAO, and that’s what’s exciting coming forward,” Heeger said. “What we have right now is the simplest execution. We have to buy up some stuff and hold it and maybe earn some interest on it.”
DAOs, like other digital assets including cryptocurrencies and non-fungible tokens, are just beginning to bud. For example, Wyoming passed crypto legislation last year that recognized DAOs as limited liability corporations, or LLCs, giving them certain tax advantages and legal protections.
“The possibilities are limitless,” Heeger said. “If you can buy it, you could buy it with a DAO.”
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