Source: Wit Oszweski – Shutterstock
- Participants of the ConsitutionDAO crowdfunding effort reported high gas fee charges during refunds.
- Some users reported that the gas fee on Ethereum was higher than their actual ETH donation amount.
A crypto-funded effort initiated by ConstitutionDAO to bid for a rare copy of the U.S. Constitution fell out last week with the top bidder outbidding them after paying $47 million. Since, the people who participated in decentralized crowdfunding efforts have started receiving refunds from ConstitutionDAO as promised.
The refunds are to the tune of $40 million for 17,000 donors. However, it turns out that the refund process is consuming large sums of fees thereby reducing the refund amount. When reached out by BBC, ConstitutionDAO said that issuing refunds was its prime objective.
Interestingly, it later announced on its website that the project shall be closing down despite its initial promise of continuing. ConstitutionDAO noted:
We know that everyone is eager to hear what the next steps for ConstitutionDAO are – and we’ve been deeply exploring several options. While we would very much like to have been able to do so, we have determined that building and maintaining on ongoing project is not something that we as a core team are able to support, given the technical and administrative requirements of doing it properly.
The decentralized autonomous organization (DAO) ConstitutionDAO, raised massive sums of money in Ethereum (ETH) to bid for one of the 13 last available physical copies of the U.S. constitution. The group had promised to maintain this historic document “for the people”. However, they were outbid at the last moment by a private investor.
Fees taking up to half the refund
As we know, one of the biggest issues with the Ethereum blockchain has been the high gas fee. Thus, computer systems that facilitate the transactions consume a high amount of gas as per the demand/supply equation.
Related: Ethereum founder Vitalik Buterin strongly supports Layer 2 solutions for scaling
Thus, depending on how busy the Ethereum network is, at times it can be more expensive to make transactions on the Ethereum blockchain. On its official Discord channel, ConstitutionDAO has reported that the group had 17,437 donors with a median donation of $206.
Thus, a high gas fee on Ethereum means that small donors have been severely hit by transaction charges. One user on Discord said that in order to get a $400 refund, they were asked to pay $168 in the gas fee. Others complained that the gas fee was actually high than the refund amount. “Wow, lessons learned, [Ethereum] is no good. Gas too high,” wrote one donor in the support channel.
“Almost a third of people that contributed are new to [Ethereum] and their first experience is this. Not only that, they’ll have to know the pain of paying $200+ in gas for literally nothing,” they said.
Some delegates and senior people on the Discord channel said that there was no direct solution to resolve this. “We looked at and did everything in our power to come up with a gas-free refund option. However there was nothing that could be set up in a timely manner,” wrote one. “Providing a safe refund process as soon as possible was the primary goal.”
The admin of the Discord server told users: “This was a very, very hard call and we’ve all been at our computers for the last several days for every waking hour trying to find the least bad option. There was no solution that was going to please everyone.”
Credit: Source link
