Wonderland founder Daniele Sestagalli will launch a new leveraged stablecoin yield farming project called DeFi for the not-so-wealthy in crypto. He wants to make it available to people who aren’t already millionaires. The founder of Wonderland (TIME), Abracadabra (SPELL), and Popsicle Finance (ICE) predict up to 80% APY if they stake their stablecoin.
Can he regain trust for the scandal in TIME Wonderland?
Sestagalli, who faced criticism for trusting former convict Michael Patryn with Wonderland’s finances, said on Twitter that the new pool, or cauldron, will allow retail DeFi traders to earn high yields from their stablecoins.
“The new focus of my development is a strong direction towards the core values that brought me here: accessible finance for everyone,” said Sestagalli, in a bombastic April 9 tweet.
He promised a “new era” in stablecoin yield farming, with leverage of up to 40x. Leverage allows users to take a much bigger position in a particular cryptocurrency without the need to pay the full price.
Sestagalli said the first such cauldron will be with the Ethereum-based protocol Yearn Finance. Users could earn above 80% interest, or APY, on deposits of the DAI stablecoin, he revealed, without elaborating on the source of the yield.
The software developer also censured wealthy crypto investors often referred to as ‘whales’ for crowding out small investors from high-paying protocols.
“Key component is to allow lower available capital to be able to earn like a much bigger one: introducing the brand new cauldrons with capped capacity per address and huge 40x + leverage generating the best yields for small Frogs,” he added.
Sesta looks to regain investor faith
Sestagalli leads a community of decentralized finance (DeFi) projects that he helped found. That community, which includes Wonderland (TIME), Abracadabra (SPELL), and Popsicle Finance (ICE), is known as ‘Frog Nation’ and the participants call themselves “frogs.”
In the spirit of the frog, Sestagalli, also known as Dani Sesta, is now trying to croak his way back into DeFi, after suffering what looked like serious reputational damage with the Michael Patryn (0xSifu) scandal in February.
The DeFi founder learned of Patryn’s checkered past but remained quiet about it for a month, allowing the ex-convict to continue in his role as Wonderland treasury manager. Sesta only confessed after the matter was brought to light by pseudonymous crypto sleuth Zachxbt.
As the news hit the market, Wonderland’s TIME token crashed alongside all the other tokens linked to the developer. Many people got liquidated, and Sesta promised to refund. He never did.
Dmitry Mikhailov, CTO at gaming metaverse Farcana, told BeInCrypto that Sestagalli would likely face a hard time regaining the goodwill that he built throughout 2021.
“He [Sestagalli] will have to hope that there’s an appetite for the kind of ‘degen’ activity he spearheaded once again to see success with his latest venture,” said Mikhailov.
“Until the market shows strength across the board, it’s difficult to see his new project gaining as much traction as Wonderland and Abracadabra did.”
New DeFi project to stabilize MIM peg
Dani Sesta is hoping that his new stablecoin yield farming project will bring on what he calls “important new changes with dynamic interest rate”, to help stabilize the U.S. dollar peg of Abracadabra-based stablecoin Magic Internet Money (MIM).
He also expects the project to “generate much more fees to the protocol in a leap towards sustainable growth, strong peg, and global accessibility scaling solution to be used by everyone, everywhere.”
Continuing, Sesta stated: “This new cauldron will launch with 0% initial fees and 0% interest rate. Prepare your stables, you’re about to experience yields out of this planet.”
Curve Finance, the DeFi protocol known for its cheap stablecoin trades, responded to Sesta’s tweet with “OMG”, which in a way sums up the predominant reaction of both shock and disbelief to the developer’s new proposal.