The decentralized finance (DeFi) debacle has caused a lot of ripples throughout the ecosystem as the project head seems ready to wind everything up. The co-founder of the embattled Wonderland DeFi project is now ready to pull the plug after a deeply divided community vote on the matter.
On January 30, Wonderland co-founder Daniele Sestagalli tweeted that the Avalanche-based reserve currency test is coming to an end. He also mentioned that the divided community means that the company has failed.
In that context, the vote to save or pull down the project came after Sestagalli asked the former partner and Wonderland treasury head Michael Patryn, known by pseudonym ‘0xSifu’, to step down in the past week.
Patryn, who changed his name many times, was sensationally revealed on January 27 to be the co-founder of the collapsed Canadian crypto exchange QuadrigaCX. Notably, he has also been in the past convicted of credit card fraud and he pleaded guilty to many related offenses in the early 2000s.
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 many active votes on the Wonderland governance forum. But, the vote to wind down the project and refund the holders had 55% voting to save it and 45% in favor of abandoning the project at the time of this publication.
Sestagalli stated that the division has resulted in the decision to take a single path forward:
“The Team has 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 also mentioned that he is working closely with the team on a new proposal. Nonetheless, it was discovered by the people in favor of keeping the project running that the community was not split. They said that the token allocation was split, which caused many other concerns among the community.
Buy Bitcoin Now
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
Wonderland Looks For Alternatives
Several alternative proposals have already been put forward to save the project from going under. They include another continuing discussion on a possible merger with Wonderland and Abracadabra, a decentralized finance lending protocol and yield strategy generator.
Furthermore, on January 31, 2022, a long proposal for Wonderland 2.0 was launched and published by the members of the community called ‘Frogs’ indicating the possibility of a transition of the existing protocol and treasury to a new DAO network with a highly transparent governance system.
The Decentralized Finance imbroglio has had a major impact on the entire ecosystem with many other networks like Terra also feeling the impacts. These close ties between Wonderland and Abracadabra’s MIM (Magic Internet Money) token seem to have also affected Terra’s ecosystem since MIM is used for yield farming with the Terra stablecoin (UST).
The stablecoin has plunged below its peg recently on Wonderland worries, and that has had a knock-on effect on LUNA that is used for its price-stabilization mechanism. Prices of LUNA are now down 13% in the last 24 hours as the investors have been continuously liquidating.
In the meantime, Wonderland’s native TIME token has lost 60% of its value since the debacle started in the past week and is now 96% down from its November 7 all-time high of over $10,000.