Prior to its fall from grace earlier this year, Wonderland Money was pivoting to operation as a DeFi hedge fund. On the advice of treasury manager Sifu, the DAO invested $18,337,000 USD into Betswap.gg, a crypto-native betting platform, in exchange for $BSGG tokens. On February 12th, a $BSGG airdrop went live to all snapshotted $wMEMO, $TIME, and $MEMO holders – for the whopping sum of $17.64.
The community reaction was strongly negative, despite it still being economically viable to claim such a small airdrop due to low fees on the Avalanche Network. Why is that? Free money is still free money, right?
A Power Vacuum in The Rabbit Hole
Critically, the $BSGG airdrop comes in a time of nearly complete radio silence from the Wonderland leadership team. Founder Daniele Sestagalli has made exactly 6 tweets or replies since Feb 1st – a number he would previously hit in a few hours. The Wonderland twitter handle has tweeted once since Jan 28th, and that tweet was about the $BSGG airdrop.
Discussion on the governance forum is currently centered around a proposal to implement a rage quit mechanic before discussing any paths forward for the DAO. The logic behind this is that some fraction of users want nothing more at this point than to be done with Wonderland. These disaffected users should be allowed to offboard, in order to smooth out the governance process for the remainder.
Notably, the core team is not involved in these governance discussions. The snapshot votes are full of (sometimes amusing) trash. The governance forum is swamped with “I got banned from Discord please help” and about three actual serious discussions. The team members have largely gone radio silent.
Who is steering the ship? Where are the promised buybacks below backing? Where is the promised mechanism for severance? Where is the payback to users liquidated below Dani?
The Long, Slow, Rug?
Emotions are high surrounding Wonderland. How high? A meme painting by DegenFren commemorating the events of Sifu-gate recently sold for 64.05 ETH in public auction. This moment is so historical to DeFi that someone was willing to pay $193k USD to commemorate it.
Many, many eyes are on this protocol. Despite the high stakes, it’s possible that Wonderland will end with a whimper, not with a bang. The Paladin Security audit of Wonderland’s protocol is currently marked as “halted”, stating that the client has not been responding to the auditors.
Smart contract audits are not cheap. Even an audit from Paladin, a smaller shop that typically audits younger protocols, will still run 5-6 figures USD minimum. Would you buy a new Mercedes and then not pick it up from the dealership? For months?
Cost aside, ignoring an audit of a security-critical application is a huge red flag. Either the protocol is in such turmoil that the developer team is no longer able to work, or the core team is intentionally ignoring the audit findings. Neither bodes well for the future.
Is it possible that Dani and his team intend to let Wonderland slowly wither on the vine?
It would be highly unusual to abandon a protocol that still has millions of dollars in its treasury, especially when there are exit routes that would preserve your social capital. Dani still operates two functional protocols, Abracadabra Money and Popsicle Finance, and rugging Wonderland would be the death knell for the other projects.
The bare minimum, easy-way-out solution is just to divvy up the treasury proportionally to wMEMO holders. This has some inherent issues, but allows Dani to wash his hands of the whole thing and move on. However, we have not seen any moves taken to implement even this simple measure.
Red flags continue to rise over the smoldering ruin of Wonderland Money. Is the power vacuum due to malevolent inaction, or simply a burnt-out, overstressed founder struggling to find the best path for everyone? Regardless of intent, the current state of the leaderless Wonderland governance system is a warning sign.
If the core team does not step up and deliver some solutions, the DAO will continue to descend deeper into chaos. The $BSGG airdrop is not even a finger in the leaking dam. If $TIME price drops and further users go underwater, the userbase will grow increasingly desperate. Without leadership, the protocol is doomed to at best treasury winddown and disbanding, and at worst a governance attack or other tragic ending to the saga.
As $TIME drags on, the question grows louder. Where is Daniele Sestagalli?