Year-end turmoil! Wonderland scandal summarized, Frog Nation's cryptocurrencies all plummet, no one wants to hold MIM

It all started with the crash of the ecosystem token wMEMO from Wonderland...

Wonderland Collapse Incident

The Wonderland protocol is a fork project of OlympusDAO on Avalanche, known for its discount bonds, high APY, and a buyback mechanism to protect token price, which has attracted a significant amount of funds since its launch.

During a week of sharp market decline, the tokens in the Wonderland ecosystem also experienced a simultaneous drop. However, what was particularly strange was the drastic drop in wMEMO, where not only did the buyback mechanism fail to trigger, but it was instead subject to massive liquidation. The token price plummeted from around $46,000 to about $20,000, a drop of over 50%.

This unusual occurrence raised suspicions, and Twitter user OlympusIntern discovered anomalies in Wonderland co-founder Daniele Sestagalli's wallet.

It was found that Daniele typically received his salary in wMEMO. Upon receiving wMEMO as his salary, Daniele would then use the highest leverage on abracadabra to collateralize and borrow MIM, convert the MIM to USDT via Curve, and finally withdraw the funds through the centralized exchange Bitfinex.

Step One:

Step Two:

Step Three:

Upon discovering this behavior, users began to question the security of the Wonderland protocol. Shortly thereafter, blockchain detective zachxbt.eth revealed on his Twitter that Wonderland's CFO, 0xsifu, is actually Michael Patryn, a co-founder of the now-defunct Canadian cryptocurrency exchange QuadrigaCX, who had served time in the U.S. for identity theft.

QuadrigaCX Exchange Incident

Michael Patryn, originally named Omar Dhanani, had a criminal record from 2005 to 2007 in the U.S. for bank fraud, burglary, and identity theft. After being deported back to Canada and changing his name, he founded the cryptocurrency exchange QuadrigaCX in 2013. Following the mysterious death of co-founder Gerald Cotten in 2018, the exchange claimed to have lost access to cold wallet private keys and maliciously shut down, resulting in user losses of up to $190 million, affecting around 115,000 victims.

Regarding these accusations, Daniele confirmed the truth on his Twitter, but he did not condemn Patryn. Instead, Daniele stated that he would not judge the present based on a person's past.

"One of the reasons why blockchain technology and DeFi are so powerful is that they do not hold biases against a person's past. I hold no bias against 0xSifu; he has become part of my friends and family," Daniele said.

Comprehensive Token Price Collapse

The day before zachxbt.eth exposed the incident, Daniele even planned to integrate the protocols he had built in the past with Wonderland to establish a Frog Nation. The Frog Nation includes Abracadabra.money, Popsicle.finance, Wonderland.money, and the newest member, Sushi.com. Daniele aims to integrate these protocols to leverage significant synergies.

However, following the exposure of these hidden facts, Daniele's Frog Nation project and Michael Patryn's role as Wonderland's CFO sound extremely ironic to users, leading to a comprehensive drop in token prices.

The declining tokens include as of the deadline:

• Wonderland ecosystem token TIME price at $350, down 32%
• Wonderland ecosystem token wMEMO price at $19,610, down 20%
• Abracadabra stablecoin MIM price at $0.9789, down 2.4%
• Abracadabra governance token SPELL price at $0.0054, down 23%
• Popsicle Finance governance token ICE price at $4, down 22%

According to Debank on-chain data, the renowned quant team Alameda Research withdrew over $500 million from the Curve's MIM - 3Crv liquidity pool this morning.

After the withdrawal, Alameda sold off some of the MIM in hand, only to buy it back a few minutes later, leaving the motives behind unclear.

AC Has Something to Say

Following the incident, Yearn founder Andre Cronje, who has a close relationship with Daniele, made comments on Twitter.

"I still believe in Daniele and am willing to continue working with him, but there are boundaries. Past scams, theft, and malicious behaviors are not mistakes but intentional. Allowing Sifu to manage funds, especially user funds, is quite negligent." Andre Cronje said.

Sifu Dismissed as of 1/29 Update

Since the Wonderland scandal, founder Daniele Sestagalli initiated a vote on Snapshot on whether "Sifu should continue as CFO." After the vote results were released, with a approval rate of 87.56%, Sifu was officially removed from the position.