Wonderland Becomes The DAO Of Dystopia

When DAO’s (distributed autonomous organizations) sprung onto the DeFi space at the end of Q3 and beginning of Q4 of 2021, DeGens got excited: frogs were born, and visions of APYs (annual percentage yields) of 80,000% and more caused a lot of buzz, as investors did not think twice about jumping in.

One of the more popular DAOs with swift growth was called Wonderland Time.

The frontman of Wonderland, Mr. Daniele Sesta, was quoted as saying:

“…when we are all together, we are much much stronger, and we can defend ourselves from those powers that want to avoid us to be free in the financial markets.”

With a passion for the project expressed so publicly, it is no wonder the project snowballed.

The DAO boasted a 72,000% APY. Many investors jumped on board. Their treasury grew to over $400 million in a matter of months. From there, the project went from strong to stronger. It appeared to be a project dreamed up with the best intentions and visions of grandeur.

In three short months, The project imploded.

What happened, and why?

At a recent public event in October of 2021, when asked about his vision for the Wonderland project and DeFi in general, Mr. Sesta stated that “…we are transitioning towards a new concept where tribalism is the past and unity is what brings really (sic) blockchain into the new world.”

With such utopian ideals and a brazen personality, Wonderland grew. At first, investors were making insane returns, and everyone was happy.

Then it all went horribly wrong.

With changes mid-way–and new rules created seemingly on the fly–investors soon became confused: how to continue getting fat returns, what was the vision of the DAO going to be once it built up a significant enough treasury? It did not take long for investors to become distressed and disheartened.

Then the impossible happened.

A Tale of Greed, Death, Stolen Identities, Fraud Prison

Although Mr. Sesta was a public figure, tweeting often, other members of the Wonderland team were not doxxed. The CFO of the project (who was never doxxed), it turns out, had a sordid past. That information was revealed to Mr. Sesta a few months into the project–about a month before it became public. Mr. Sesta chose not to get in front of the story, and the project fell apart virtually overnight.

The problem was: this was not just any story. It turns out that the CFO, who goes by the moniker of Sifu, is a convicted felon. He served time in prison for fraud.

Sifu, aka Omhar Dahani, aka Michael Patryn, was the co-founder of QuadrigaCX, a Canadian exchange that collapsed in 2019 after Gerald Cotten mysteriously died while visiting India. With his death, $169 million of the exchange’s holdings became unrecoverable by the investors. Soon after his partner’s death, Sifu changed his name from Omhar Dahani to Michael Patryn and moved to the US.

Omar Dhanani, aka Michael Patryn, was one of 6 men arrested for internet ID theft and credit card conspiracy fraud back in 2005. They were operating Shadowcrew.com, a web mob of highly organized criminals who stole countless identity credit cards and sold the information.

According to a Bloomberg article from January 2006 citing a United States Secret Service affidavit, Omar: “boasted in a chat room that he moved between $40,000 and $100,000 a week.”

He pled guilty to the charges of conspiracy to commit fraud and was sentenced to several years in prison.

Once confronted with the truth from an internet sleuth, Mr. Sesta went public. He admitted that he had known for approximately a month. He chose not to disclose to the public that his CFO, in charge of close to a billion-dollar Wonderland treasury, was managed by a felon imprisoned for money laundering a secret.

Mr. Sesta stated that he pays attention to what one is doing in the present, not what they did in the past. But was that the right move?

From Bad to Ugly

To Mr. Sesta’s credit, as the crisis unfolded, he did his best to get in front of the story and salvage what was left of the reputations of the project and himself. Meanwhile, his frogs are angry and shocked, and many don’t know what to do. Most have lost money they couldn’t afford to lose. A token that was once as high as $9,000 now has a value of $323.

The frogs may not be so quick to forgive. Some say that this was a long, slow rug pull for maximum gain. Others choose to believe Mr. Sesta had the best intentions, but he simply managed the entire ordeal poorly. Either way, the damage is done, and there may not be a second chance for this DAO.

Leave a Reply

Your email address will not be published.

Related Articles
Read More

What Is Balancer? A Complete Guide To Balancer (BAL)

Balancer is an automated portfolio manager and trading platform built on the Ethereum blockchain. Its official launch came in March 2020, yet the protocol started development in September 2019 led by Fernando Martinelli, Nikolai Mushegian, and Mike McDonald, who funded the project with $3 million....
Read More

Justin Sun Unveils $1Million NFT Fund

Not only did crypto prices skyrocket to entirely new heights, but the DeFi boom continued, and let’s not forget the fact that crypto got another massive, parallel trend in the NFT sector. In fact, NFTs continued to explode even over the past several weeks while...
Read More

Can DeFi Supplant the Traditional Financial System?

Whether or not decentralized finance (Defi) will supplant the traditional financial system recently has been a conversation on the lips of a good number of people. As the decentralized finance (DeFi) industry grows steadily, the total value locked in DeFi platforms has exceeded $ 50...
Read More

What Is Crypto Rugpull? How To Protect Yourself

The crypto sector has experienced its own share of positives and negatives in the past decade. New concepts like DeFi, Staking, Yield farming have been introduced that have brought about improved financial products for investors to increase their earnings. With new innovations comes dangers and...
Total
0
Share