# Dani and the Cheshire Cat By [doc](https://paragraph.com/@rcjh) · 2022-01-27 --- THIS ARTICLE IS NOT INVESTMENT ADVICE. OPINIONS ARE MY OWN. TRADE AT YOUR OWN RISK. Since the inception of Wonderland, I (as well as most of CT) have been amazed at how quickly a community can form around an individual. Wonderland, a DAO driven by the (3,3) prisoner dilemma, offers an insanely high yield, a doxxed founder, and a clear message: “FUCK THE SUITS”. Their fearless leader? [Dani](https://twitter.com/danielesesta), the only doxxed member of the team, leads an ever-growing tribe of frogs looking to overthrow a ‘corrupt’ oligarchy of VC backed crypto and tradfi projects. Dani is the founder of multiple defi related projects including [Abracadabra](https://abracadabra.money/), [Popsicle Finance](https://popsicle.finance/), as well as [Wonderland](https://www.wonderland.money/). Dani also, based on community vote, is now the project lead for [Sushiswap](https://sushi.com/). All of these projects have been cleverly woven together to provide a one-stop-shop ecosystem that allows users to stake their tokens on multiple L1s, as well as borrow against their interest bearing tokens (with significant leverage) to mint Abracadabra’s stable token $MIM (magic internet money). This allows users to hold their ib tokens, while also remaining liquid. It also offers users the ability to take their newly minted $MIM and invest in other projects. Before breaking down recent events, I would like to say that I am a supporter of Dani. I’ve been following him for months; listening to most of his AMAs and most of his guest appearances on any crypto centric podcast. I believe Dani is well intentioned and genuinely believes in each of his projects. He is incredibly knowledgable about the crypto space, specifically defi, and has formed the largest crypto community to date. I own a very small amount of $WMEMO. However, recent events have brought his reputation into question. Let’s start from the beginning. Wonderland $TIME is an $OHM fork based off the (3,3) prisoner’s dilemma. These projects debase their supply every 8 hours or so to share revenue with token stakers. They use a bonding mechanism to offer users the opportunity to bond specific assets to the protocol at a discount and receive $TIME back in exchange. These bonded assets are housed in the Wonderland treasury. Users can then stake their $TIME and in return receive $MEMO, which is where the rebasing occurs. This is meant to reward long time holders/stakers over short term traders and encourage users not to sell, even when price is moving to the downside. They even offered a handy little calculator on the website that allowed users to enter any price for $MEMO and any time frame up to one year to show, even with significant downward price movement, you would still wagmi as long as you held. So, what happened? Crypto has been in a major slump since the bitcoin ATH back in early November and $OHM and any of it’s forks were not immune to those sell offs. As quickly as $TIME went parabolic, it retraced with equal velocity. Coupled with the sell off, many $MEMO holders borrowed/minted $MIM and reinvested, raising their liquidation levels. Users thought “well as long as i’m significantly below the backing price (price at which Wonderland buys back your $TIME/MEMO with treasury assets), then I’ll be safe from liquidation!” Narrator: They were not safe from liquidation. “OH NO. WHAT’S GOING ON. WE ARE BELOW BACKING. THEY DIDN’T IMMEDIATELY BUY BACK. WHAT THE FK DO WE DO”, they said. ![](https://storage.googleapis.com/papyrus_images/781aed30244c8d7a8113976a9aaffece985ab71fe7c9c0be8953b638cadf3218.jpg) With $TIME/MEMO price being significantly below backing price, we saw a cascade of liquidations similar to ones we would see on a typical bitmex style stop loss run. Wonderland eventually bought back and brought price up to backing level, but not before a series of liquidations occurred. Dani and the Wonderland team, as a sign of good faith, paid back liquidations below the backing price. Dani warned that this might occur the day prior with a twitter spaces AMA. He said they were in the middle of moving liquidity away from Trader Joe to their new community exchange, Sushiswap. This liquidity move would likely trigger significant price movements where liquidations could occur. ![](https://storage.googleapis.com/papyrus_images/00727c89a2f622176e297f258878d00da27f9c89fca05f2cb2535979f7e1d4d5.png) So, why didn’t they immediately buy back? Well, it’s tricky. They can’t code an automatic buy back at the protocol level because that would inevitably lead to bad actors manipulating the protocol itself and eventually draining the treasury. The buybacks had to be done manually and not scheduled. This had previously been communicated to the community, but could have been much more transparent. Also, due lagging buybacks, some token holders were concerned the buyback would never occur, meaning the backing price was a complete facade. Panic sellers caused the price to drop even further and with no certainty if the backing price was real, there were no buyers willing to create a support level until the buyback occurred. ![](https://storage.googleapis.com/papyrus_images/ea7f012d11f7bdfff4f8493bd93ef0db200caefbac9acdc4cd5b63e8773ddf88.png) ENTER [SIFU](https://twitter.com/0xSifu). Sifu is the anonymous CFO of Wonderland and controls the Wonderland Treasury. At this time, very few were aware of who Sifu actually was, but with Dani being his biggest advocate and no bad actions recorded to his name to date.. the community grew to trust Sifu in a similar way they trusted Dani. Once the community saw the buyback occurred, the seas seemed to calm. The storm was over. However, price continued to dribble down to inevitably retest the liquidation support. This leads us to the events over the last couple of days. Two days ago, another liquidation below backing occurred. This one with no buyback for hours… Sifu and Dani? both silent. Wonderland’s discord was a total shit show. Apparently, they were both asleep and allege that this event was, essentially, a coordinated attack and was planned to occur when they were both asleep. Once Dani woke up, he immediately said he would payback liquidations himself as they worked to bring the current price back to EQ. ![](https://storage.googleapis.com/papyrus_images/74cede22a6b874bd332440349ec6f62f7ed5a4154ba9bae973f956ccc5ae0b8d.png) Now, I can’t confirm this, but I imagine the second panic sell was triggered by someone leaking who Sifu really is before it hit CT. This triggered another the liquidation god candle as rumors began to circulate that Sifu is actually one of the co-founders of the failed Canadian crypto exchange QuadrigaCX, who goes by the name of Michael Patryn. I’m not going to spend more time breaking down QuadrigaCX or Michael Patryn, but more can be found in this thread by [zachxbt](https://twitter.com/zachxbt). [https://twitter.com/zachxbt/status/1486591682728673282](https://twitter.com/zachxbt/status/1486591682728673282) In an attempt to put out the flames, Dani has since posted a twitter thread and an article himself, both of which I’m linking here. [https://twitter.com/danielesesta/status/1486591436233404421](https://twitter.com/danielesesta/status/1486591436233404421) [https://mirror.xyz/0x8A7f7C5b556B1298a74c0e89df46Eba117A2F6c1/Laraxx5dW-07hvHS-ff8TgnS4etd67SbM05Li1Am1ag](https://mirror.xyz/0x8A7f7C5b556B1298a74c0e89df46Eba117A2F6c1/Laraxx5dW-07hvHS-ff8TgnS4etd67SbM05Li1Am1ag) There is also a community vote occurring right now to remove Sifu as TM. [https://twitter.com/danielesesta/status/1486711002221539329?s=20](https://twitter.com/danielesesta/status/1486711002221539329?s=20) ![Sifu's comments based on current allegations. ](https://storage.googleapis.com/papyrus_images/247b42d218d58002819f954978781974209eac09805864c46a74cf5d1f155381.png) Sifu's comments based on current allegations. [https://twitter.com/danielesesta/status/1486759008895524865?s=20](https://twitter.com/danielesesta/status/1486759008895524865?s=20) [https://twitter.com/danielesesta/status/1486772056922333192?s=20](https://twitter.com/danielesesta/status/1486772056922333192?s=20) Whew… That was a lot. Congratulations, you’re all caught up. For now, the future of France remains in question. --- *Originally published on [doc](https://paragraph.com/@rcjh/dani-and-the-cheshire-cat)*