- ConstitutionDAO’s native token, PEOPLE, jumped 130% on the day.
- Hype seems to be the only fundamental behind the DAO token’s rise.
NEW DELHI (CoinChapter.com) — ConstitutionDAO, the decentralized crowdfunded organization created to buy (unsuccessfully) a rare copy of the U.S. constitution, saw its prices nearly double on Dec 9.
The DAO’s PEOPLE token jumped 130% in less than 12 hours, going from the day’s low ($0.0824) to the high ($0.19). However, prices soon pared, and the DAO token pulled back from the high. At present, it is still unclear what led to today’s sudden bull run.
The token has gained tremendously over the last month. For example, People is trading more than 18,000% above its all-time low of $0.007099, as per data from coinmarketcap. Yet, what fuels the price action remains a mystery, given that the People token has little to no use cases.
People’s prices are likely reacting to a social media frenzy, which means the uptrend might continue for a while before crashing due to a lack of any fundamentals.
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People is the token that investors, who contributed to fund the DAO’s failed bid for a rare copy of the constitution, receive. As such, investors contributed $47 million for deciding where to display the constitution copy if they won and similar non-consequential decisions.
However, the group did not prevail at the auction, leaving the DAO wondering what to do next. At first, DAO leaders thought of going after another item with similar historical significance.
Later, organizers decided to refund everyone’s money. But, with Ethereum’s high gas fees, people who contributed small amounts would essentially receive nothing. Investors had the option to either ask for a refund or deposit their People tokens into a wallet.
A New, Hyped Memecoin
In essence, the investors made their donations to receive a governance token that currently governs nothing, has no monetary value, and any refund would involve less-than-profitable transaction fees. (Thanks to Ethereum). As a result, many donors started wondering if Constitution DAO was nothing more than a scam.
However, some donors seem to be accumulating the People token, believing they can turn the DAO token into a community-owned cryptocurrency. This group of investors would like People to follow Shiba Inu (SHIB) or Dogecoin (DOGE), memecoins with no real fundamentals.
Despite the recent gains, 1 ETH would still buy 1 million PEOPLE tokens, indicating the DAO token’s value on exchanges has no impact on its fundamental value. However, the frenzy attracted some big names in the crypto market, with the crypto exchange OKEx listing the token for trading.
Moreover, OKEx holds roughly 27% (about 1.3 billion PEOPLE) of the tokens created on its platform.
People is gradually becoming a community-owned token. OKEx has always been at the forefront of listing tokens that are owned 100% by the community, like SHIB and many others.Lennix Lai, director of financial markets at OKEx, said.
People’s current meteoric rise is a purely speculative one. Thus, it’s likely to suffer a 95% – 99% pullback when the profit-taking starts. Token holders who chose a refund helped destroy more than 55% of the total digital coins raised by donations.
While Shiba Inu is a memecoin, it also claims to have built an entire ecosystem with SHIB in the center. Unless Constitution DAO leaders decide to reinvigorate the community and fund something new, the People token would be nothing but a flash in the pan crypto.