It was about the purchase of a first edition of the US constitution from 1787. Almost 17,500 investors had come together in the “Constitution DAO” group and accepted a bid of up to 40 million US dollars for the first edition auctioned by Sotheby’s communicated. In the end, the historic document went to Ken Griffin, head of the Citadel hedge fund, for $ 43.2 million. The “Constitution DAO” could not prevail.
Raised $ 4 million, but nothing further
Another DAO has now been founded, the aim of which is to take over a team from the US NBA (National Basketball Association). The group, which refers to the late manager of the Chicago Bulls, Jerry Krause, called “Krause House DAO”, collected the equivalent of four million dollars in the crypto currency Ethereum within six days. The crowdfunding was organized in the form of an NFT sale and ended last Thursday.
Even if four million dollars is an enormous sum, the crypto fans will definitely not be able to buy an NBA team with it. Even the “cheapest” NBA team – the Memphis Grizzlies – is valued at around $ 1.3 billion. In addition, it seems difficult to imagine that previous owners could be willing to sell their club to a DAO (Decentralized Autonomous Organization) that has no conventional hierarchies and therefore no “faces”.
The founders of Krause House understand this: “We understand that the reader’s first instinct could be to make fun of it and say that the owners will never allow this to happen.” which is supposed to be a corruption of the conventional term “white paper”.
Furthermore, they state that they see the main advantage in their DAO that fans of the sport can participate in their sport in this way, so that in the end the fan can at least partially own their favorite team – a special form of crowdfunding, but that goes beyond pure funding.
Investors are serious
A co-founder of the Krause House DAO spoke to the non-profit magazine NPR about the group’s further plans, whose primary goal has now failed for the time being. That founder said the money raised so far will be invested in projects that can show that a DAO “may one day be a serious candidate for an NBA team,” and that a DAO can even be “an effective way to get one to lead a professional basketball team ”.
The investor Michael Lewkowitz, who invested the equivalent of 100,000 dollars in the Krause House DAO, is serious. Krause House was “absolutely serious,” he said in an interview. “We’re used to the fact that a billionaire buying a team is a one-off event. But this will be different. It’s about people coming together and embracing something that is really important to them. Sport should be in the hands of the people who care about it most, ”said Lewkowitz.
Lewkowitz was also part of the failed Constitution DAO, but does not worry about it: “You can see it as a lost command, or you can see it as thousands of people who have come together for a common cause and have almost achieved something amazing” .
This is how the Krause House DAO works
As with every DAO, Krause House is a crypto organization on the blockchain that joins whoever buys the token issued by the DAO. Voting rights in the organization, which works like a kind of automatic company, are directly linked to the number of tokens purchased. In this way, individual investors can also determine what happens in a DAO. Krause House is issuing the $ KRAUSE token for this purpose.
All actions of the DAO are brought about by the consensus of its token holders, which sometimes makes the DAO react a little slowly. Nevertheless, it is an innovative form of organizational structure in times of the Web3 and can in principle be used for all types of undertakings. Even if – as here – it is only an extended crowdfunding measure.
Small warning sign for those interested in Krause House: The DAO does not want to be committed to buying a team when setting goals. In the small print it says: “Neither the ticket NFT nor the $ KRAUSE token are a promise for the future ownership of a team”. The initiators clearly want to remain flexible here.
At least NFT, which are pictures showing tickets for an imaginary Krause House basketball game, the investors now own. However, it is at least doubtful whether they will ever develop their own value. In any case, the makers of the DAO succeeded in bundling several hype topics into an investor bundle that could have an attractiveness equivalent to four million dollars.
