FreeRossDAO: Another blueprint for peer to peer Crypto Crowdfunding

PYMTS | Dec 3, 2021

Last month, a hastily formed group calling itself ConstitutionDAO threw together a fundraising scheme to buy a rare copy of the U.S. Constitution at auction, raising $48 million in just a few days.

Now another group is following its playbook in an effort to free dark web marketplace Silk Road’s imprisoned founder. So far, the day-old FreeRossDAO has raised more than 840 ether, worth $3.8 million. In doing so, it is laying the groundwork for a new way of crowdsourcing fundraising.

While FreeRossDAO’s ultimate goal is to get Ulbricht out of his two-life-sentence-plus-40-years jail term, its short-term goal is to win an NFT auction of 10 Ulbricht drawings being sold to raise funds for both the Free Ross campaign and more general prisoner support. The auction is being held on the SuperRare NFT marketplace during Art Basel Miami, which runs from Dec. 2 through Dec. 4.

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If its bid is successful, FreeRossDAO is planning to tokenize the 10 Ulbricht NFTs and distribute the $ROSS cryptocurrency to donors, who will own a fraction of the artwork, along with voting rights over what to do with it.

FreeRossDAO plans to put excess funds into a war chest for future projects, also controlled by $ROSS holders.

A Patreon/Kickstarter Hybrid

The high-profile ConstitutionDAO effort ultimately failed to win the historic document, despite having raised more than twice the amount of the auction house Sotheby’s estimate. However, that was because it ran headfirst into the billionaire hedge fund CEO Ken Griffin, who was apparently determined to get the Constitution at any price.

A proof-of-concept test had proven that the structure worked.

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If FreeRossDAO is successful — and it seems unlikely that any billionaires want Ulbricht’s 10 pencil drawings — it will have created a blueprint for future fundraising efforts.

Combine the increasingly mainstream NFT artwork craze, self-governing decentralized autonomous organizations at the heart of DeFi, and social media — the Discord social chat app and Twitter, in this case — and you’ve got a mashup of Patreon and Kickstarter for the crypto age.  Projects tapping into this type of funding opportunity will want to work with a cryptocurrency marketing agency.

What’s a DAO?

In a DAO, cryptocurrency tokens are sold that entitle the holder to vote on control of the project. Once created, the founders cede all management functions to the leaderless organization, creating an organization with no third-party control.

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All financial decisions and rule changes are controlled by an automated voting process: X number of votes bring a rule-change proposal before the entire organization, and token holders have a set time period — often a week or two — to vote on it. If enough voters support the proposal, the self-executing smart contract that runs the project automatically implements it.

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