Bitcoin

Wonderland co-founder throws in the towel on beleaguered DeFi project

The co-founder of the embattled Wonderland decentralized finance project is preparing to pull the plug following a deeply divided community vote.

On Jan. 30, Wonderland co-founder Daniele Sestagalli tweeted that the Avalanche-based reserve currency experiment is coming to an end. He added that the divided community “means that we failed.”

The vote to save or wind down the project came after Sestagalli asked former partner and Wonderland treasury head Michael Patryn (who goes by the pseudonym ‘0xSifu’) to step down late last week.

Patryn, who has changed his name on a number of occasions, was sensationally revealed on Jan. 27 to be the co-founder of the defunct Canadian crypto exchange QuadrigaCX. He has also been previously convicted of credit card fraud and pleaded guilty to several related offenses in the early 2000s.

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Wonderland experiment is coming to an end. It is clear from the vote that the community is divided. The core and heart of Wonderland is still the community. If we cannot find agreement on wether to continue or not, it means that we failed.

— Daniele never asks to DM (@danielesesta) January 30, 2022

There were several active votes on the Wonderland governance forum, however, the vote to wind down the project and return the treasury back to its holders had 55% voting to save it and 45% in favor of disbanding at the time of writing. Sestagalli said that the division has resulted in a single path forward:

“The duty of the Team is to enact the will of the token holders. As the vote is so close to 50/50 there is only one path forward, it is to reimburse/unwind.”

He added that he is working with the team on a new proposal. However, it was pointed out by those in favor of keeping the project going that the community was not split. They suggested that the token allocation was split, which raised other concerns among the community.

I am ready to listen to what you have in mind, so please do not take this as FUD or hate, I just want to correct a point here

The community is not split 50-50. The token allocation is. The community as individuals voted overwhelmengly No and against all odds, we eeked out a win pic.twitter.com/nBS3cCRe39

— 0x von Bismarck (@0xVonBismarck) January 30, 2022

A number of alternative proposals have been put forward to save the project from going under. These include another ongoing discussion on a potential merger with Wonderland and Abracadabra, a DeFi lending protocol and yield strategy generator.

Additionally, on Jan. 31, a lengthy proposal for Wonderland 2.0 was published by members of the community known as “Frogs” suggesting a transition of the existing protocol and treasury to a new DAO structure with a more transparent governance system.

Related: Daniele Sestagalli discusses Wonderland’s future after QuadrigaCX co-founder dox

The DeFi imbroglio has had ripple effects throughout the ecosystem with other networks such as Terra also feeling the impacts. The close ties between Wonderland and Abracadabra’s MIM (Magic Internet Money) token have also impacted Terra’s ecosystem since MIM is used for yield farming with the Terra stablecoin, UST.

The stablecoin has dipped below its peg recently on Wonderland concerns, and this has had a knock-on effect on LUNA which is used for its price-stabilization mechanism.

LUNA prices are currently down 13% over the past 24 hours as investors have been liquidating. Meanwhile, Wonderland’s native TIME token has crashed nearly 60% since the debacle began last week and is now languishing 96% down from its Nov. 7 all-time high of just over $10K.

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