While the community of Story has been shaken by the appearance of the Wagon Box DAO, proposed recently as a kind of digital time-share for the Wagon Box Inn, it isn’t the first decentralized autonomous organization to buy property in Wyoming.
That distinction goes to CityDAO, which announced its purchase of a 40-acre parcel of land near Yellowstone Park for around $100,000 on Nov. 1, 2021.
That was meant as a proof of concept, according to subsequent tweets that day on CityDAO’s Twitter page.
“It’s not in the most convenient location nor does it have an abundance of natural resources,” the tweet said. “It does have a well for water, a flat area for building and is 45 minutes from an airport.”
CityDAO and the idea to acquire the property began with a July 2021 tweet by Scott Fitsimones — still pinned to the top of his Twitter page — that says, “Starting a DAO to buy and tokenize land in Wyoming, who’s in?”
As responses rolled in, Fitsimones expanded on the idea, writing that Wyoming’s DAO law would “help bridge the physical and crypto world by allowing DAOs to control LLCs.”
“This means for the first time, land can be put on chain, and ownership can be enforced by courts and state institutions that recognize DAOs,” he tweeted.
Immediate Response
In a later blog post in August, Fitsimone wrote that he had “accidentally” started CityDAO with that tweet in July.
By then, his half-serious proposal had driven more than 2,500 people to a Discord channel devoted to the idea, as well as sales of more than $250,000 in non-fungible tokens, or NFTs, to buy an actual parcel of land in Wyoming.
Fitsimones went on to explain why he believes the whole idea is important, even if he was half-joking at first.
“(It’s) enticing because the way (land purchase) currently works is a stark contrast to what blockchain enables,” he wrote. “Blockchain offers transparency, instant transactions and democratization through fractional ownership. Land is currently obscure, obtuse and illiquid.”
Putting land on a blockchain could help create more equitable tax mechanisms, Fitsimones suggested, and that by itself could be world-changing.
“We are starting by tokenizing one piece of land as an experiment,” he wrote. “But when 1,000 people own pieces of land next to each other, suddenly a city emerges. People need to govern themselves and agree what can be built, where to put roads, how to fund public goods.
“Land is the beginning, but a city is inevitable.”
Multiple Wyoming Locations Considered
The CityDAO group considered a number of properties across the Cowboy State in the beginning. Land in Rawlins, Medicine Bow, Sheridan, Thermopolis, Alva, Douglas, Newcastle, Dubois, Etna and Alpine were all on its list.
Kanye West’s former $11 million ranch was even briefly considered, which is just south of Cody. The group ultimately decided that the ranch would be both too famous and too expensive to manage.
Dialed back, the group’s final criteria settled on proximity to an airport, a water source and a price point of $120,000 or less.
That led them to vote on buying 40 acres off Hail Basin Road west of Clark on Sept. 27, 2021. It is close to an airport and has a well, though it is otherwise undeveloped.
A flag was planted on the chosen parcel by a handful of group members Oct. 7, though the transaction wasn’t officially complete in the real world until Oct. 29.
Once the land was officially purchased and announced on Twitter, however, that produced a rush of new CityDAO citizens, as they refer to themselves. Some had quite a bit of name recognition, if only in the cryptocurrency realm, such as Mark Cuban, Vitalik Buterin, Brian Armstrong and Balaji.
Shining Digital City On An Internet Hill
Subsequent posts and CityDAO records show the group rapidly deciding to subdivide its Parcel 0, as the land had been named, into 950 available plots. It then decided each citizen should only own one plot and implemented royalty fee on resale of citizen NFTs, aimed at disincentivizing such sales.
A grant program was created aimed at funding proposals for land uses, and a council of 20 CityDAO citizens was elected to draft both a charter and an operating agreement, ratified last year in April.
However, it appears the project also began to languish.
Every decision required a quorum of at least 500 voters for each and every tiny decision, which bogged things down tremendously.
Fitsimones writes about this both in a recently released white paper “The DAO Handbook,” and in an article at Coin Desk.
One thing DAOs face in the real world, Fitsimones said, are immense coordination and regulatory costs that “negate the benefits of using a DAO in the first place.”
But the other thing DAOs face, Fitsimones suggested, is a “vetocracy,” a term coined by Ethereal co-founder Vitalik Buterin that refers to the situation where the default outcome of proposals becomes “no.”
“In some cases, the fact that democratic process adds friction is a feature, not a bug,” Fitsimones wrote. “For financial protocols that steward millions in user deposits, it should be difficult to change settings that could impact upon tens of thousands of users.”
But in earlier stages, Fitsimones continued, a core team should have authority to take the dozens of small actions initially required, without the hindrance of coordinating hundreds of people to take a simple “baby step.”
Zoned Out
In a June 2022 blog post that suggests zoning laws are unconstitutional, Fitsimones references the CityDAO project in Wyoming.
“We were surprised to learn that many onerous zoning restrictions applied even in rural Wyoming,” he wrote. “For example, restricting each 40-acre lot to one single-family dwelling.”
That could explain why there is as yet no record on the CityDAO page of any particular proposed use for the land the digital community has bought near Yellowstone Park.
Meanwhile, the group has drafted proposals re-envisioning its governance structure, as well as proposing to explore buying a rental house in Turkey that, if successful, could provide passive income to fund the group’s further activities.
There was also a proposal to donate $9,000 for relief to Turkey after a devastating earthquake in that region.
Renee Jean can be reached at: Renee@CowboyStateDaily.com
