Extraordinary Rise and Spectacular Fall of Wonderland and Dani Sesta
We take an in-depth look at the recent controversies surrounding Wonderland, Popsicle Finance, Abracadabra, and the man behind it all — Daniele Sesta.
The Extraordinary Rise
The early work
Dani Sesta, full name Daniele Sestagalli is a founder and spokesperson of the popular OlympusDAO fork Wonderland (TIME).
Daniele Sestagalli has been in the blockchain industry for a long time. He has expressed in several interviews that he started with Bitcoin already in 2011. Not a lot is known about Daniele, but he probably started working in the industry in 2018 with his project Zulu Republic. According to his LinkedIn profile, he speaks Italian, Spanish and English, but the average consensus tells us that Daniele himself comes from Italy. [1]
Zulu Republic was thought of as an ecosystem of digital platforms built on the Ethereum blockchain. [2]
The project failed sometime during the prolonged bear market of 2018–2020. Dani, however, moved on and established a series of OlymupusDAO forks that promised its users incredible returns.
As a closing statement for the introductory part of the article, let’s observe the message that Daniele is sending to the viewers of his LinkedIn account.
The image of a crypto wizard
Dani Sesta positioned himself as a spokesperson and founder of not one, but three different blockchain projects: Wonderland, Popsicle Finance and Abracadabra. This is the first major red flag surrounding Daniele Sesta.
Let’s for instance assume that a single person is running a chain of bakeries for a living. How many bakeries could a single person run efficiently and indefinitely before things get out of control? We argue that a single person could probably run two bakeries at the same time. If the person is extremely capable and energetic, maybe three bakeries could be managed by a single person. Anything more than that would simply be too much.
Now think of differences in complexity and uncertainty between running an average bakery and an average blockchain project. There is no way that a single person would be capable of managing more than just a fraction of a single blockchain project, no matter how organized, vigilant and enthusiastic the person is.
Dani, however, tried to manage at least three different blockchain projects at the same time. As crazy as it may sound, this didn’t seem to bother Dani’s followers and investors.
Let’s take a closer look at some of Dani’s projects.
Wonderland (TIME)
We will let the project speak for itself:
Each unit of TIME is backed by different reserve assets like Magic Internet Money and liquidity tokens. This mechanism, which was copied from OHM, ensures that TIME has an intrinsic value it cannot fall below.
Two things to focus on here:
- “Magic Internet Money” — there is no such thing as magic. Never was, never will be.
- “TIME has an intrinsic value it cannot fall below.” — this is theoretically true, but not in a good way. The threshold intrinsic value of an asset from which it cannot fall any further is actually zero. So yes, TIME cannot fall below zero.
However, while things were good they were really good.
TIME rose from $570 in September 2021 to an astonishing $9600 just two months later. At its peak, TIME’s daily volume was over $100M.
Popsicle Finance (ICE)
In Popsicle’s own words:
Popsicle Finance is a multichain yield optimization platform for Liquidity Providers. Turn on our auto-pilot, relax, and boost your yield.
Let’s analyze these two sentences:
- The first sentence consists of eleven words, of which a whopping six words (over 50% of the sentence) are the current-era buzzwords. “multichain yield optimization platform for Liquidity Providers”. In common language, this translates to “hype for hype and more hype”.
- “Turn on our auto-pilot, relax, and boost your yield.” — translated to “Don’t ask too many questions and don’t DYOR.”
But simmilar to Wonderland, things were great for a while.
$ICE rose from $4.2 in April 2021 to $61.5 in November 2021. At its peak, the daily volume was over $70M.
Abracadabra (SPELL)
Finally, the last of Deni’s projects, in its own words:
Abracadabra.Money is a spell book that allows users to produce magic internet money.
Just wow…
Same as Dani’s other projects, SPELL crated some ridiculous short-term returns.
Starting from $0.00065 in August 2021, the price of SPELL went to $0.033 in November.
There is a clear pattern here: all the projects were started around the same time and all the projects had their ATH in the same month. This is a second red flag. If a newly started crypto project is progressing so well, why would you start another two projects around the same time? Isn’t there enough work already?
The Frog Nation
You may have heard that Daniele Sesta is also a leader of the Frog Nation. In essence, Daniele used his public image and the short-term gains from his projects to organize a large audience similar to the likes of Reddit’s r/wallstreetbets, known for last year’s pumping of meme stocks and referring to themselves as “retards” and “apes”. [7]
What apes are in r/wallstreetbets, frogs are in Dani’s ecosystem. The community also calls themselves “the degens”.
Makes you wonder.
The Spectacular Fall
First public red flag
Before we dig into the second half of the article, let’s take a moment to watch Dani Sesta’s response to the question of Wonderland being a Ponzi. Skip to 00:40 to see his response. [8]
When asked if Wonderland is a Ponzi, Sesta’s reply was simply “Yeah. I guess.”.
While it may seem funny at the time, there was nothing in his answer worth celebrating. As a public person, Sesta was supposed to be a bit… brighter.
A Ponzi scheme is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors.
U.S. Securities and Exchange Commission [9]
Read the definition given by SEC again: fraud. Remember that word, for it will appear again near the end of the article. If the earlier red flags weren’t enough, this one had to make a difference. Right?
Apparently not. Or at least not at the time, which was in the second half of November 2021 while Dani’s projects were at an ATH. Again, the typical investor didn’t bother much, and Sesta was largely celebrated for his “devil-may-care” attitude.
Beginning of the end
Things moved rather quickly from November 2021 onwards. Let’s take a look at the same three charts for TIME, ICE and SPELL, but this time completely zoomed-out.
Wonderland (TIME) lost all of its gains from November 2021 until today. The token is currently trading at the price lower than the starting price.
ICE also lost all of its gains. The current price of the token is also lower than the opening price from April 2021.
SPELL is the only token currently trading above its opening price from August 2021. The value, however, has plummeted from $0.033 to $0.0052.
The drop that spilled the glass
Now let’s move on to the main reason you are probably reading this article. We are about to enter a much darker territory here. The one in which the frog gets eaten.
On January 27th, 2022 all hell broke loose when the true identity of Dani’s partner and Wonderland’s treasury manager 0xsifu was revealed to be Michael Patryn — the co-founder of a notorious Canadian crypto exchange that defrauded investors of $190 million.
Michael Patryn co-founded defunct Canadian crypto exchange QuadrigaCX with the late Gerald Cotten in 2013, but left three years later over disagreements about the company’s plans to go public. The exchange collapsed in 2019 with $169 million of investor funds lost. [13]
Michael Patryn’s police record speaks for itself:
- Patryn served time in the US for his role in an online identity theft ring.
- He changed his name twice. First time from Omar Dhanani to Omar Patryn in March 2003. Second time from Omar Patryn to Michael Patryn in 2008.
- In the US he was charged with several crimes, including a conspiracy to commit credit and bank card fraud.
- Patryn confessed to numerous unrelated crimes that include burglary, grand larceny and computer fraud in 2007. He served 18 months in prison for some of his criminal cases and was later deported to Canada
The story was first shared by zachxbt.eth, a self-proclaimed crypto detective. Daniele Sesta confirmed the story to be true in a series of tweets that followed.
1/ This needs to be shared. @0xSifu is the Co-founder of QuadrigaCX, Michael Patryn. If you are unfamiliar that is the Canadian exchange that collapsed in 2019 after the founder Gerald Cotten disappeared with $169m I have confirmed this with Daniele over messages.
zachxbt.eth
2/ Prior to Quadriga, Michael helped run a identity theft ring called shadowcrew in which he later plead guilty to While Dani insists it is fine he puts both his rep on the line along with most importantly all the money people have deposited in his protocols at risk
zachxbt.eth
The wallet ownership has also been established. [11]
Dani confined the story to be true in a separate series of tweets. [12]
1/ Today allegations about our team member @0xSifu will circulate. I want everyone to know that I was aware of this and decided that the past of an individual doesn’t determine their future. I choose to value the time we spent together without knowing his past more than anything.
@danielesesta2/ Many people in the world are judged by their early mistakes, this comes prevalent into the life of ex inmates that can’t get access to financial services after being felons.
@danielesesta3/ One of the reasons why blockchain technology and DeFi is so powerful is that has no bias about your past. I have no bias about @0xSifu he has became a friend and part of my family and if my reputation of judgment will be hit by his dox, than be it. All frogs for me are equal.
@danielesesta4/ As I fight for him I will fight for anyone else that has proven to me to be a good actor despite the past. I keep looking forward into the future rather than crystallise back. Hope you do it too.
@danielesesta
Now that the evidence is laid out, we will provide commentary on the situation. But before we do, let us ask one question:
Are Dani’s comments about fraud (Ponzi) still funny?
Probably not funny if you have your money in any of the projects. On the other hand, his comments are probably hilarious if you don’t.
But there is one thing here that cannot be overstated — Dani knew about it!
He knew about it and he decided to do nothing. If the whole case didn’t surface, Dani would never acknowledge the true identity of his partner. This has nothing to do with Dani being a “good guy” and providing an ex-convict with a second chance. Michael Patryn is not some petty thief who messed up once and now needs a second chance. Michael Patryn is a professional criminal, highly skilled computer user, and likely an extremely intelligent person with zero morals. He is also extremely rich.
To summarise:
- If Dani didn’t know about it — then he is uninformed and therefore unfit to manage a multi-million dollar operation.
- If Dani knew about it but decided to do nothing — then he has no morals and therefore cannot be trusted to run a multi-million dollar operation.
In days and weeks ahead, it will be up to the frogs to decide where this story goes next.
For more articles, analysis and news, follow Ground Zero on Telegram and Twitter.
Cheers,
- The Ground Zero team
References:
- Who is Daniele Sesta (Daniele Sestagalli), the man behind Wonderland ($Time), Popsicle Finance ($ICE), and Abracadabra ($MIM)?, THOMAS STEIN, IPAddressGuide.org, November 2021. Available at: https://www.ipaddressguide.org/who-is-daniele-sesta-daniele-sestagalli-the-man-behind-wonderland-time-popsicle-finance-ice-and-abracadabra-mim/
- What Is Zulu Republic?, Zulu Republic Team, Medium.com, March 2018. Available at: https://medium.com/zulurepublic/what-is-the-zulu-republic-a-quick-introduction-8530d7d82c82
- Daniele Sestagalli, LinkedIn.com, January 2022. Available at: https://www.linkedin.com/in/daniele-sestagalli-aa293487/?originalSubdomain=ch
- Wonderland, CoinmarketCap.com, January 2022. Available at: https://coinmarketcap.com/currencies/wonderland/
- Popsicle Finance, CoinMarketCap.com, January 2022. Available at: https://coinmarketcap.com/currencies/popsicle-finance/
- Spell, CoinMarketCap.com, January 2022. Available at:https://coinmarketcap.com/currencies/spell-token/
- r/wallstreetbets, Wikipedia, January 2022. Avilable at: https://en.wikipedia.org/wiki/R/wallstreetbets
- Founder of $TIME Wonderland Explains Insane APY & How It’s Calculated, YouTube.com, November 2021. Available at: https://www.youtube.com/watch?v=xlgMqsCEJfc
- “Ponzi Scheme”. Investor.gov. U.S. Securities and Exchange Commission. Retrieved 9 June 2021.
- zachxbt.eth, Twitter.com, January 2022. Available at: https://twitter.com/zachxbt/status/1486591682728673282
- Tay, Twitter.com, January 2022. Available at: https://twitter.com/tayvano_/status/1486629672280485891/photo/1
- Daniele never asks to DM, Twitter.com, January 2022. Available at: https://twitter.com/danielesesta/status/1486591436233404421
- Wonderland CFO Outed as Ex-convict and QuadrigaCX Co-founder Michael Patryn, Jeffrey Gogo, BeinCrypto.com, January 2022. Available at: https://beincrypto.com/wonderland-cfo-outed-as-ex-convict-and-quadrigacx-co-founder-michael-patryn-steps-down/
- Quadrigacx Co-Founder a Convicted Fraudster, Jeffrey Gogo, Bitcoin.com, January 2022. Available at: https://news.bitcoin.com/quadrigacx-co-founder-michael-patryn-is-actually-convicted-fraudster-omar-dhanani/
