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"Will the core team receive any of the raised funds for themselves or get compensated in any way from this? The core team has not received or pre-minted any to

"Will the core team receive any of the raised funds for themselves or get compensated in any way from this? The core team has not received or pre-minted any tokens. Following the purchase of the Constitution, we intend to submit a proposal to be voted on by the community. While this is unusual, we believe that it establishes a precedence of mutual trust between the core team and the backers of the ConstitutionDAO." So anyone who funds this has to trust that a) You are not a dog, b) ConstitutionDAO will use the money to buy the copy of the constitution, c) All extra money will be returned, d) The above mentioned proposal will be in the interests of the community, and e) ConstitutionDOA will abide by the above mentioned vote. Setting all of that aside, what mechanism exists for a "governance token" to actually have any power in this relationship at all?

meheleventyone 5y ago
It’s a physical thing and a DAO (mostly) isn’t a recognised legal entity so there is always a disconnect here irrespective of the crypto side of things. There’s an awful lot of trust being put into the honesty of the people organising this effort with little ability to hold them to account. Which is par for the course and why rug-pull is a turn of phrase.
cge 5y ago
Beyond this, there doesn't appear to be any explanation of how this works from a legal and tax perspective. There's no mention of a legal entity receiving the funds, but at the same time, they state these are donations, not fractional ownership, so presumably from a legal perspective this is actually just giving the funds to the core team, who appear to be mostly in the US, but not entirely? And, while I had always thought that the point of DAOs was that they were autonomous, this appears to be just giving the core contributors direct control over the money? Surely, for example, the actual bidding is not coded into the contract? So, considering this is now over $25m, wouldn't there be some tax involved if people pay you in this way? Maybe if you argue they are gifts (but are they?), and no individual donation is over $10k, but I suspect many are? And at over $25m, Sotheby's is obviously going to have some ownership identification requirements. So who will actually be the legal owner here, and how will they account for this revenue? Apparently, they're planning on setting up a (for-profit?) LLC? (https://davidgerard.co.uk/blockchain/2021/11/16/constitutiondao-a-20-million-stupid-ethereum-trick/ https://davidgerard.co.uk/blockchain/2021/11/16/constitution...)

meheleventyone 5y ago

It’s a physical thing and a DAO (mostly) isn’t a recognised legal entity so there is always a disconnect here irrespective of the crypto side of things. There’s an awful lot of trust being put into the honesty of the people organising this effort with little ability to hold them to account. Which is par for the course and why rug-pull is a turn of phrase.

cge 5y ago

Beyond this, there doesn't appear to be any explanation of how this works from a legal and tax perspective. There's no mention of a legal entity receiving the funds, but at the same time, they state these are donations, not fractional ownership, so presumably from a legal perspective this is actually just giving the funds to the core team, who appear to be mostly in the US, but not entirely? And, while I had always thought that the point of DAOs was that they were autonomous, this appears to be just giving the core contributors direct control over the money? Surely, for example, the actual bidding is not coded into the contract? So, considering this is now over $25m, wouldn't there be some tax involved if people pay you in this way? Maybe if you argue they are gifts (but are they?), and no individual donation is over $10k, but I suspect many are? And at over $25m, Sotheby's is obviously going to have some ownership identification requirements. So who will actually be the legal owner here, and how will they account for this revenue? Apparently, they're planning on setting up a (for-profit?) LLC? (https://davidgerard.co.uk/blockchain/2021/11/16/constitutiondao-a-20-million-stupid-ethereum-trick/ https://davidgerard.co.uk/blockchain/2021/11/16/constitution...)