The Bribes • Wonderland x Abracadabra
In anticipation of bribes from Abracadabra, Wonderland distributed a portion of its $SPELL holdings through its Farm in order to mitigate exposure. However, the bribes issue has been raised in both communities numerous times, and we would like to shed light on the situation.
This article is intended to raise awareness around the situation and will be updated when new information becomes available.
Summary
Negotiations between the two protocols were conducted in December 2021, resulting in an agreement. The parties involved in the negotiation process were Daniele Sestagalli, Wonderland’s cofounder and Abracadabra’s de facto leader, and Sifu, Wonderland’s elected Treasury Manager and Abracadabra’s Chief Financial Officer.
At that time, it was not necessary for the DAOs to require a vote in order to approve this business deal as it fell under Sifu’s authority as Treasury Manager and because both protocols were part of the Frog Nation ecosystem. No previous or subsequent business deals between the two protocols have ever been voted by the DAOs as they were viewed as an internal transaction.
In his most recent AMA, Daniele publicly set a deadline of 20th September 2022 for providing detailed calculations of the amount of Bribes owed from Abracadabra to Wonderland.
Since his resignation, Wonderland has made repeated attempts to contact Daniele using the medium of his choice. These attempts were made to clarify the miscommunication, negotiate the terms of the Bribes payment, reach an agreement and restore the relationship between the two protocols, which has been badly damaged. However, these attempts have gone unanswered.
The Timeline
As a DAO we feel the responsibility to inform our community about all details of the deal and provide a complete timeline breakdown. It is our belief that no secrets should be kept which could further exacerbate the situation.
14th of December, 2021
The following was announced in the Wonderland Discord server:
Wonderland purchased 1,183,522 $CVX OTC at an average price of $25.11. These tokens will be locked for voting power, so that we can receive over 100% APR worth of rewards between direct bribes and Convex rewards. We will be voting for the pools supporting our partners at Abracadabra, who have provided over $200mm worth of loans to our protocol and users.
30th of April, 2022
Daniele Sestagalli made public that he instructed the then-sitting Treasury Manager, SkyHopper, not to sell the CVX position and continue to vote for the MIM pool.
27th of May, 2022
SkyHopper, Treasury Manager at the time, explained that Convex holders used to receive 50% returns on CVX by being “bribed” for their votes. Since early April, Convex votes held by Wonderland have voted towards the Curve MIM-3Pool, which is an integral part of the MIM/Abracadabra ecosystem. It is pertinent to note that no bribe payment had been made to Wonderland for those votes.
28th of June, 2022
A shared wallet of Daniele and three of his team members, which was previously part of the multisig but had since been removed, was used to circumvent governance by re-allocating the Treasury Manager’s designated vote from Votium to MIM. This was done shortly before the voting window closed without his knowledge or consent.
July to September, 2022
Having been unable to sell the position at break even, a DAO vote was conducted (WIP 14.1), which concluded on the 15th of July and passed with 92.43% of votes in favor. This resulted in the sale of 829,000 CVX, and an OTC trade with Sifu.Vision was executed at a price of $7.20 for 5,971,948.73 DAI. This was made under SkyHopper’s term as Treasury Manager; however, the remaining CVX did not unlock until after his term had already concluded.
The second batch of CVX unlocked on the 4th of August. Daniele delayed the selling of the second position of 295,265 CVX, which was finally sold four weeks later than prescribed in WIP 14.1. Bastion facilitated via a two week TWAP at a price of $5.30. This delay resulted in an additional loss of around $428,134 than if Wonderland had sold when the second batch unlocked.
In total, Wonderland suffered a loss of around $23,591,000 by holding the CVX, not including the unreceived bribes.
24th of August, 2022
During an AMA held in Wonderland’s Discord, Daniele Sestagalli pledged to follow the announcement and the deal to the letter and pay Wonderland the owed amount plus a 10% fee for delay. Having assured the community that the amount owed is available, he also requested the Wonderland team to reach out for his completed calculations by the 20th of September.
7th of September, 2022
A spreadsheet was provided by the Wonderland Team including daily prices for CVX and SPELL as well as a calculation based on the announcement (100% on CVX assets for the time period, plus 10%). This calculation results in an estimation of over $10,000,000 debt of Abracadabra to Wonderland in the form of Bribes.
20th of September, 2022
Daniele Sestagalli responded via Telegram. According to him, he will provide the calculation for fact-checking once the team has completed its work.
30th of September, 2022
Following a ping from Romy, an Abracadabra team member, Daniele Sestagalli responded without providing a definitive timeline. Despite multiple attempts for communication with Daniele, all messages have been ignored. This is the last response Wonderland has received from Daniele.
19th of October, 2022
Abracadabra’s official position, according to Romy, is that this is an external matter not related to Abracadabra and to be handled by Daniele personally.
Wonderland’s official position is aligned with the agreement struck and announced in January. The announcement from the protocol leaders clearly defines the terms and conditions of the agreement between the protocols. This was later publicly re-confirmed to be accurate by Daniele himself with no changes or additions in terms.
The Aftermath
In the present state of affairs, the problem has not been resolved, and it remains pending. No bribes have ever been paid to Wonderland.
Daniele has not responded to the Wonderland Team nor the Abracadabra Team on the matter, so both protocols are left waiting for an official statement.
References
Note: Screenshots have been taken of all discussions and stored safely so that no edits or deletions can be made to alter or conceal the truth.
