The Defiant

Questions Swirl Around Wonderland’s Fate After Frog Nation Crisis

There's mounting concern about the sustainability of Wonderland in the wake of the Frog Nation fiasco last week.

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Questions Swirl Around Wonderland’s Fate After Frog Nation Crisis

It’s been a tumultuous week for the Frog Nation, the collective of DeFi projects led by Daniele Sesta.

Sifu, the group’s CFO, was ousted after it came to light that he was a co-founder of QuadrigaCX, a Canadian crypto exchange that went under in 2019 with over $150M of client funds lost.

Subsequently, a vote was called to determine the future of the Wonderland project. Token holders were asked if they would want the project to continue under new management, with the alternative being to dissolve the treasury and distribute the proceeds pro-rata.

Over 22,000 votes were cast, representing the largest turnout in the protocol’s history.

The results show that a slim majority wish to continue with the Wonderland experiment.

Prior to the conclusion of the vote regarding dissolution, a new proposal outlining ‘Wonderland 2.0’ was posted on Medium. It includes an option for holders to redeem their portion of the DAO treasury if they so choose. Those who choose to remain would become members of a remodeled investment DAO looking to make VC-style investments in the crypto space.

Given the results of the earlier vote to continue with the project, many community members voiced their concerns in the project’s Discord, alleging that some large investors attempted to manipulate the vote for a quick profit.

Twitter user 0xVonBismarck posted this chart showing the influence of the five largest wallets.

But why would these whales want to dissolve the protocol?

Wonderland’s TIME token is currently trading below the value of its treasury assets.

By purchasing tokens prior to the snapshot and voting to dissolve the protocol, opportunistic investors stand to make a healthy profit if allowed to claim their share of the treasury at current prices.

This looks similar to a corporate raid in traditional finance, in which investors buy a controlling interest in a business purely to liquidate its assets. Carl Icahn’s asset stripping of Trans World Airlines in the 1980s is a prime example.

In response to these concerns, Sesta posted that no further action would be taken without consulting the community, acknowledging that “communication has been sporadic, confusing, and imprecise.”


His latest post indicates that he will manage the project personally until a satisfactory path forward is found.


It also looks like the exit option is off the table, at least for now.


The Wonderland scandal saw many investors exit their leveraged positions on Abracadabra, the Frog Nation’s flagship project. Curve recorded its highest volume day ever as investors rushed to trade out of MIM, Abracadabra’s stablecoin.

However, fears of a MIM depeg seem to have subsided. Though the Curve pool remains unbalanced, MIM is trading closer to its peg.


Hungry as ever for yield, degens have once again piled into the leveraged UST Degenbox strategy on Abracadabra and utilized all the available MIM.


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