🌪 Questions Swirl Around Wonderland’s Fate After Frog Nation Crisis
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OUSTED 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.
VOTE 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.
RESULTS 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.
PROPOSAL 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.
PROPOSAL In a move that may be call on the top of the NFT market, the community behind Ape DAO, a group of collectors that holds 81 Bored Ape Yacht Club (BAYC) and 81 Mutant Ape tokens, is rallying behind a governance proposal to dissolve and liquidate its treasury.
GROWTH The move comes amid surging growth in the NFT markets, and one month after BAYC’s floor price surpassed CryptoPunks’ for the first time. With BAYC’s floor price sitting at 118.7 ETH ($325,000), Ape DAO may soon dump more than $26M worth of NFTs.
DISSOLUTION The proposal was submitted by a community member and is set to expire on Feb. 3. Its author wants the DAO’s treasury to be sold for Ether and then distributed and then distributed to tokenholders. Approximately 86.5% of voters support Ape DAO’s dissolution.
NEWS Curve Finance, an automated market maker and DeFi’s second-largest protocol, had a record-breaking day on Jan. 27 with $3.2B in volume, according to the project’s stats page.
VOLUME When daily volume hit $2.8B, Curve’s Twitter account teased that the mark was an all-time high for the protocol.
SIFU The MIM pool dominated volume as users looked to trade out of the stablecoin in light of the news that Sifu, as he’s known in crypto, is actually Michael Patryn, the co-founder of QuadrigaCX, a controversial crypto exchange that lost its customers over $100M.
COLLATERAL Sifu was the chief financial officer of Frog Nation, a network of projects which include Abracadabra, which issues the MIM stablecoin to users against their crypto assets pledged as collateral. He was ousted following the revelations.
CASH Crypto is inventing a new way to organize people, work and money: decentralized autonomous organizations, or DAOs. DAOs have cash – a recent Consensys report used data from Open-Orgs to estimate that DAOs have more than $14B in their collective treasuries – but they don’t have great methods for paying people in crypto-native ways.
CLOSED BETA Enter Utopia, a payroll and expense management system built to integrate directly with multisig crypto wallets, making it easier for the large DAOs to pay their chief contributors. Utopia is coming out of its closed beta today, opening up its tools to DAOs who want to get beyond Google Sheets as a way to manage who needs to get paid what, and who needs to be repaid for covering which expenses.
METRICS “Paying people regardless of the kind of DAO you are is still a pain when you hit a degree of scale,” Kaito Cunningham, Utopia’s CEO and co-founder said. “Paying and retaining core contributors is going to be one of the most important metrics.”
RISK Volatility in the capital markets has long driven financial engineers to fashion new forms of managing risk. The same is true in crypto.
ON-CHAIN With perpetual swaps and other derivative instruments long available to investors, the crypto market is now producing more sophisticated on-chain offerings such as Dopex, and Lyra, which deal in options and build on Ethereum Layer 2s,
DEMAND Now a new project called JonesDAO, which bills itself as offering one-click access to institutional grade options strategies, is jumping into the fray. It raised an astonishing $52M in 24 hours on Jan. 29, underscoring the demand for sophisticated instruments in a market that’s teetering on the edge of bear territory. (Options enable investors to preset prices for buying securities).
PLUNGE It’s time to sort out the damage from the January plunge. And take note of a silver lining. Terra (Luna), the DeFi sector’s largest asset and second-ranked network, was among the hardest hit, with its price crumbling by half while TVL dropped more than a third over the past month. The combined capitalization of DeFi assets has failed to bounce alongside leading cryptocurrencies this past week.
LOCAL LOW DeFi assets are at $109B according to CoinGecko, up just 3.3% since a four-month low of $105.3B on Jan. 28. By contrast, Ether is up 24% from its Jan. 24 bottom, while Bitcoin is up nearly 15% since its local low on the same date.
The DeFi market cap is down 37% since its all-time high of $174.7B on Nov. 12. DeFi assets currently represent 6% of the global crypto capitalization.
Leading networks’ relative share of DeFi TVL. Source: The Defiant chart
The frothy venture capital market continues to buoy the empire of billionaire trader and entrepreneur Sam Bankman-Fried.
Meta, formerly known as Facebook, has signed up to a trade body that promotes the free use of innovative technology in the crypto sector, according to an announcement.
Bitcoin (BTC) is retaking market share from altcoins after its market capitalization dominance hit its highest since November 2021 last week.
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🧑💻 ✍️ Stories in The Defiant are written by Brady Dale, Owen Fernau, Samuel Haig, DeFiDad, and yyctrader, and edited by Edward Robinson, yyctrader, and Camila Russo. Videos are produced by Robin Schmidt, Alp Gasimov and Daniel Flynn. Podcast is led by Camila, edited by Alp.
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