The ancestors of the Micronesians settled over four thousand years ago. A decentralized chieftain-based system eventually evolved into a more centralized economic and religious empire centered on Yap. Nan Madol, consisting of a series of small artificial islands linked by a network of canals, is often called the Venice of the Pacific. It is located near the island of Pohnpei and used to be the ceremonial and political seat of the Saudeleur dynasty that united Pohnpei's estimated 25,000 people from about AD 500 until 1500, when the centralized system collapsed. European explorers—first the Portuguese in search of the Spice Islands (Indonesia) and then the Spanish—reached the Carolines in the sixteenth century, with the Spanish establishing sovereignty. It was sold to Germany in 1899, conquered by Japan in 1914, and later by the United States during World War II and administered by the U.S. under United Nations auspices in 1947 as part of the Trust Territory of the Pacific Islands. During World War II, a significant portion of the Japanese fleet was based in Truk Lagoon. In February 1944, Operation Hailstone, one of the most important naval battles of the war, took place at Truk, in which many Japanese support vessels and aircraft were destroyed. On May 10, 1979, four of the Trust Territory districts ratified a new constitution to become the Federated States of Micronesia. Palau, the Marshall Islands, and the Northern Mariana Islands chose not to participate. The FSM signed a Compact of Free Association with the United States of America, which entered into force on November 3, 1986, marking Micronesia's emergence from trusteeship to independence. The Compact was renewed in 2004.