DENVER – Denver Broncos put up for saleand a group of crypto enthusiasts aims to raise over $4 billion using a decentralized autonomous organization, or DAO, to make it theirs.
You can think of the DAO as a group of people acting in concert without a single leader. Unlike a conventional pool of investors, DAOs rely on cryptocurrency technology to track and verify group membership, and to facilitate the back-end work of raising and distributing large sums of cash. This group includes lawyers, accountants, software developers, professional athletes, and at least one mathematician.
One of the originators of this case is Sean O’Brien, who spent over ten years in the Cisco legal department before leaving the corporate world to run several small businesses with his wife.
“We know it sounds a little crazy, but it’s also a little cool,” O’Brien said. “Essentially, the goal is to create the infrastructure so that fans from all walks of life can own the Denver Broncos.”
The team trustees said in a statement that the goal is to sell the team by the start of the 2022 NFL season. O’Brien told CNBC that while smart contracts and crypto wallets are set up, their DAO won’t officially go live until the first week of March, so the BuyTheBroncos initiative will need to quickly cover more territory to stand a chance.
But the crypto collective has a secret weapon in Colorado Gov. Jared Polis, who recently announced plans to accept cryptocurrencies for state taxes this summer. On Friday, a pro-cryptocurrency MP told CNBC on the sidelines ETHDenver — a major conference focused on analyzing the current use cases and future of Ethereum — that he would be “delighted” if their efforts were successful.
“I would love to be a part of it myself,” Governor Polis said.
“The challenge will be that it will require a lot of money… but you know what, if your imagination is big enough, then it can happen. And whatever I can do to make it happen, I would be happy,” the governor continued.
Denver Broncos player Drew Lock passes to the Kansas City Chiefs.
Getty Images/Dustin Bradford
They say this DAO is different
According to Auston Bunsen, co-founder of QuikNode, which provides blockchain infrastructure to developers and companies, DAOs are taking resource coordination on the web to the next level.
“They represent a new type of organization moving at hyperspeed,” Bunsen said.
Investor Cooper Turley, who helped create several popular DAOs, says they are like “an online community with a shared bank account.”
“Basically, a small group of people get together to create a chat group, and then they decide to raise capital together, [typically] with an Ethereum wallet.” – Turley previously told CNBC.
The BuyTheBroncos contingent joins a long list of DAOs pooling funds to buy real assets. In July 2021, PleasrDAO bought a copy of the Wu-Tang Clan album once owned by Martin Shkreli for $4 million, and in November 2021, a consortium of crypto investors formed the DAO Constitution, raising $47 million worth of Ether in a week to try and buy a rare copy of the first edition US Constitution at Sotheby’s. Although the group didn’t make the winning bid, the movement caught the world’s attention and helped bring the concept of crowdfunding to cryptocurrencies.
The rallying cry of the DAO Constitution was “WAGBI” or “we’ll buy it all”. But in reality, the thousands of investors who were part of this DAO would not have received partial ownership of the document. Instead, they would become holders of a crypto token known as “People”, which would grant them certain voting rights regarding the future document.
The Denver Broncos cheerleaders perform at a game against the Los Angeles Chargers at Empire Field.
Getty Images / Justin Edmonds
“The DAO constitution was essentially a fundraiser,” said Derek Sorensen, a mathematician and PhD student at the University of Cambridge in the UK who advises BuyTheBroncos on how to structure the DAO.
“It was like we’re going to raise money, we’re going to buy this Constitution, you don’t own the Constitution or actually have no legal rights to anything related to it. You can vote on where we put it, but there are no legal guarantees,” Sorensen continued.
Sorensen says BuyTheBroncosDAO will adopt a completely different governance structure. While the group will still be raising funds in cryptocurrency, the idea is to give people partial ownership in which they will participate in making decisions about how the team works. They also plan to form the group as a cooperative, similar to outdoor sporting goods retailer REI rather than an LLC, which they believe will exempt owners from certain SEC rules that govern investing in securities.
$4 billion seems like a huge amount, although organizations such as BitDAO, which is currently over $2.3 billion the value of the crypto tokens on his balance sheet show that the effort is not completely impossible.
“It’s definitely possible in the crypto world. This amount of money is not unheard of,” Sorensen said. “I’m very, very confident that this amount of money is absolutely feasible in web3,” though Sorensen did give the caveat that he is an academic mathematician and thus probably not the best person to gauge the future success of a business.
So far, the BuyTheBroncos case does not have much support. His Twitter account he had less than 50 followers at the time of publication, and O’Brien’s last two attempts to buy professional sports teams with the DAO were unsuccessful. But the origin story of the DAO Constitution has a similar tenor.
DAO Constitution member Miguel Piedrafita, 19, told CNBC that the DAO Constitution was created mostly as a joke. He says that he and his friends saw an article about the Constitution up on the auction block and started making memes about buying it. From there, the effort went like a snowball.
“We created twitter, went to bed, and the next day we had a bunch of followers. So we started working with legal teams, museums and Sotheby’s to try and put it all into motion, and it kind of worked out in the end. “, Piedrafita said.
Takeaway? Don’t underestimate the underdogs in the crypto world.
The BuyTheBroncos group also has a pretty solid Plan B. Organizers tell CNBC that a more realistic goal is to raise about 25% of the money needed to place a winning bid and then join forces with a consortium of more traditional buyers to catch up. difference.
Even if BuyTheBroncosDAO fails, O’Brien hopes the effort will still spread the word.
“While having a fan-owned Denver Broncos in a DAO-based system would be awesome, that’s not our end goal,” O’Brien said.
“We want these efforts to essentially open people’s eyes to what the DAO can do in the real world and make a tangible connection between that web life and the real world. We believe this will speed up the adoption of DAO to solve real world problems. such as food shortages or homeless people.”
But as Governor Polis points out, it would be nice if these crypto enthusiasts could make a deal.
“I can’t play favorites. Obviously, whoever buys the team, we totally as a state want to have a good owner, but it would be really remarkable for Colorado if they could pull it off,” Polis said. .