ConstitutionDAO (a decentralized autonomous organization created to purchase a rare copy of the U.S. Constitution) raised $49.8 million in ETH. Its auction bid was not successful, so it began refunding the unused ETH to members of the DAO. Since the funds were collected in ETH, each refund is a new transaction that incurs gas fees (the fees ETH miners charge to write transactions to the Ethereum blockchain). As of this writing, gas fees are bubbling around 100 Gwei (roughly $25 at current ETH prices), but gas fees vary greatly during the day (as does the price of ETH), so the refund process can be surprisingly expensive. One ConstitutionDAO contributor complained of a $62 gas fee to receive his $200 investment back; for reference, it cost him $38 to make the original $200 investment.
There are several lessons here: 1) Read your DAO docs to ensure that your investment will be used the way you intend it to be used. 2) Think through the tactics (costs, complexity) of both your investment and your exit from the DAO. 3) Invest enough funds where the gas fees become immaterial to the investment, or choose a DAO that’s built on a blockchain solution that doesn’t have material gas fees.
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