Constitution DAO to Issue Refunds…At a Cost

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  • Constitution DAO has said it will carry out its promise to refund donors after missing out on its target last week
  • Each donor will have to pay an ETH transaction fee to receive their contribution
  • In many cases the transaction fee will trump the value of the contribution

Constitution DAO, the decentralized collective that took $47 million in donations but missed out on buying the 1776 copy of the U.S. constitution, has confirmed that it will issue refunds to those who contributed to the fund after deliberations over a secondary fund. Constitution DAO has come in for criticism for not making the buying process more transparent, with Sotheby’s fees and other costs not stated to donors up front, while donors now face their refunds being impacted by Ethereum gas fees.

Transaction Fees Hampering Refund Efforts

Constitution DAO made global headlines last week with its attempt to buy the copy of the U.S. constitution, but the fallout following the failed purchase has been less than praiseworthy. The founders had initially promised that refunds would be issued to everyone who participated, but any logistical issues paled into insignificance compared to the cost of carrying out the task.

Had Constitution DAO succeeded in its aim then the cost of sending the fund to Sotheby’s would have been that of a single transaction, currently some $50 depending on the time of day, but the failure of the auction suddenly meant that thousands of dollars of donor money would be lost in transaction fees to process the promised refunds.

Constitution DAO Says Refunds “Fairest and Safest” Option

Constitution DAO had considered keeping the money in a kind of trust and waiting for a similar opportunity to arise, but an announcement on its website yesterday stated that refunds were “the fairest and safest path forward available at this time”.

The logistics will be carried out by Juicebox, the platform that collected the donations, which will automate the entire process, but no word yet has been issued on what happens to those donations that are now worth less than the transaction fee to send them back. When all costs are taken into account, anyone donating less than $100 will probably have made a loss on the venture with nothing to show for it.