Let’s start with an anecdote: Back in November 2021, a group called ConstitutionDAO was formed online with the sole purpose of buying a rare copy of the U.S. Constitution. Can DAOs Create a More Equitable World of Horse Ownership? The DAO (Decentralized Autonomous Organization) is a kind of syndicate, with members acting democratically. Within days of forming, it raised $47 million in funds, although it was ultimately outbid for the piece of U.S. history when it was auctioned at Sotheby’s on November 21st of last year.
So what, if anything, does this have to do with the business of horse racing? Well, despite the failure of the bid, the group got mighty close to winning, and it prompted a wave of media attention covering the premise of DAOs. Many other DAOs have formed over the last couple of years, some to run companies or cryptocurrency networks, and others with individual goals and ambitions. You might see what we are getting at here – could such principles be applied to owning a horse?
A chance for everyone to own
Of course, you might say those principles have already been applied. We can cite many examples of famous horses owned by syndicates. But there is also a sense that it remains something out of reach for the ordinary fan unless they are fortunate. Racehorse owners are, more often than not, deemed as the types who are rubbing shoulders with Sheikhs in Dubai or sipping champagne at the Tattersalls Club in Australia. Even if that is more of a stereotype than what it’s like in reality, the power of the DAO can be leveraged many times greater than that of an ordinary syndicate.
To explain, we must explain further what a DAO is and what it represents. For a start, a DAO is built on the blockchain, i.e., that network that you most often see associated with Bitcoin. But for all the complications and hysteria surrounding cryptocurrency, you should remember that a blockchain is a digital list of records of transactions – unalterable records.
The keyword there is “unalterable”, as that means they cannot be removed, distorted, or disputed. Going back to that DAO that wished to buy a copy of the Constitution: the average paid by members was around $200, meaning thousands clubbed in together to give themselves a shot at owning a bit of history. These people didn’t all know each other, but they could trust each other implicitly because they knew that the blockchain protocols would stop anyone from acting improperly, i.e., running off with the cash.
The power of the blockchain could leverage millions of funds
Now, apply that same sense of economies of scale to a DAO featuring a group of horse racing fans. If they can raise close to $50 million in a few weeks for a piece of paper, could they not outbid the movers and shakers of the racing like Tony Bloom or Sheikh Mohammed, when it comes to auctions for thoroughbreds? Okay, it’s probably a stretch to say they could outbid the latter, given he is worth somewhere in the region of $18 billion, but you get the picture. Blockchains would also ensure that earnings – if any – were shared fairly among the DAO.
Can DAOs Create a More Equitable World of Horse Ownership?
There are drawbacks. For a start, DAOs are arguably too wrapped up in the idea of cryptocurrency, and that has many pitfalls. However, the technology of the blockchain is sound, and it does not always require the use of volatile crypto tokens to bring these ideas to fruition. But it does open up a world of ownership that was not possible before.
Because of the way the blockchain works, you could even just chip in a few cents for a (very small) part of the ownership of a top horse. It might seem like an outlandish idea now, but this type of thing is being pushed heavily in tech circles. Could we see such a thing in horse racing? Don’t rule it out.
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