Thread by @JackNiewold

Remember ConstitutionDAO's $PEOPLE token?

Here's the story of how crypto twitter, normies, and history buffs united to create one of the biggest supply squeezes since Gamestop:

All while making some people 50x in 4 days.

🧵👇

Let's start with the basics:

ConstitutionDAO originally raised about $45 million dollars.

Its market cap, today, is about $750 million.

HOW DID THIS HAPPEN

If you're not already up to speed:

In mid-Nov, a group of crypto nerds and VCs came up with an idea to buy the last privately held copy of the constitution. The basic strategy:

• Make a DAO (@constitutionDAO)
• Crowdfund enough $ETH to bid on it
• Buy the constitution
• ???

Long story short, it turned into a meme, went crazy on crypto twitter, a bunch of anons, history buffs, and normies who didn't even own $ETH all linked up and crowdfunded $45 million dollars.

Then they lost to the CEO of Citadel.

Before the auction, ConstitutionDAO said they would refund all the $ETH raised if they lost.

Pre-auction, their token ( $PEOPLE ) was distributed at a rate of 1M $PEOPLE to 1 ETH.

https://twitter.com/ConstitutionDAO/status/1462588705814712322?s=20

One thing that's important to note is that this whole process brought a lot of new people to crypto.

A LOT of token owners with no experience using DEXes or online wallets.

https://twitter.com/JasonYanowitz/status/1460758255056130053?s=20

After they lost, ConstitutionDAO announced a redemption at the same ratio. 1 million $PEOPLE = 1 $ETH.

And it traded on the open market for (ROUGHLY) that same ratio.

$ETH traded for about $4100, $PEOPLE for .0038

The free market in action. 1:1,000,000

Then the DAO turned on redemptions.

Minus gas fees, you got your money back.

And lots of people redeemed their $PEOPLE for $ETH.

Until somebody checked Uniswap.

$PEOPLE price was going parabolic

But why?

Supply and demand. With all those tokens getting destroyed via redemptions, supply was drying up, even though demand existed on Uniswap.

And tokens kept being destroyed by all of the people who were just going for direct redemptions.

So with no supply and a price going parabolic, people started to ape in, pushing demand up.

All the while, the no-coiners will still redeeming their $PEOPLE for $ETH, destroying supply.

In the four days following redemptions, the price for a $PEOPLE token 50xd from .004 to .016

All the while, tokens were being redeemed as the non-crypto-native crowdfunders redeemed their $ETH.

At some point, Chinese crypto investors found out about the DAO and started aping in, why and how, I have no clue.

All adding to the meme fuel.

And the DAO treasury was only worth the $ETH it contained: $45 million and dropping.

So this whole thing was powered by memes, spit, and an increasingly worsening supply shock.

And then reality hit. With the DAO disbanding and the treasury drying up, meme power was fading.

The craziest thing? Investors are still redeeming $PEOPLE for $ETH, when it's currently trading at a 28x premium, burning even more supply.

And now $PEOPLE is going viral once again.

Why? Supply, demand, and the internet. Kind of like what happened with Gamestop.

Today, we're at $0.12 and climbing, with a nearly $1 billion market cap. We'll see how it plays out this time.

So never, ever, short a meme.

Found the thread interesting? Do me a favor and drop a fav/RT on the first tweet, I've got it linked below.👇

https://twitter.com/JackNiewold/status/1468990461448572933?s=20

One more thing: if you'd like to learn more about the fundamentals and cultural movements that drive value behind smaller-cap cryptocurrencies, check out my newsletter:

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