[DAO Discussion] Defining Dani’s Role at Wonderland

[0xFry]

Background

Daniele Sesta’s role at Wonderland has never been clearly defined. As a protocol claiming to be a DAO, having clear and defined responsibilities for team members is critical.

This has never been clearer with the recent questionable usage of Wonderland’s treasury during the UST/LUNA collapse. The lack of coordination and communication has caused the community to question Daniele’s scope of power at Wonderland. Various community members pointed out that Daniele’s role and vested interest in other protocols, namely Abracadabra, have been highlighted as a conflict of interest. Therefore, they believe Daniele should not have the power over Wonderland’s treasury as he appears to do so at this time given that he is no longer interim treasury manager.

Hopefully, this DAO Discussion will lead to a clearly defined role and responsibilities for Daniele Sesta.

Conflict of Interest

Personal Stake
There is an obvious conflict of interest that needs to be addressed. As of this writing, Daniele owns no amount of WMemo and about 4B ~ Spell Tokens worth apx. $5mm is currently being used as collateral on Abracadabra:

Source: Apeboard.finance; Dani’s Personal Wallet

However, it is worth noting that Daniele sent his wMEMO to the treasury before the Rage Quit period. This may not mean that Daniele has no interest in Wonderland succeeding. However, it helps create the perception that he does not.

Biases
There have also been various instances where Daniele has shown clear bias towards improving and focusing on Abracadabra, including when asked how he plans to help Wonderland recover:

This indicates that Daniele’s priority lies in increasing Spell token price and making Abracadabra a success. The events that happened this past week seem to reinforce this bias.

The Collapse of UST & Terra + Wonderland Treasury Usage

From May 5 to May 13, LUNA lost 99.9% of its value, leaving UST to be worth 0.17 cents as of this writing. This complete collapse of a stablecoin and entire ecosystem left Abracadabra with the potential to be stranded with millions of bad debt as UST lost its peg.

Daniele, with the help of an unknown mutisigner, used Wonderland’s treasury to save Abracadabra from potentially devastating debt to liquidate and purchase millions of UST tokens that were now being bag held by Wonderland instead of Abracadabra.

Skyhopper, our elected Treasury Manager, was not informed of Dani’s unilateral usage of Wonderland’s treasury (he was asleep) and had to arbitrage the trade.

Overall, the liquidation and arbitrage of UST resulted in a loss of 9 million USD for Wonderland.

To be fair, although this could have turned out profitable for Wonderland, it seems to have been a secondary motive as it was done without informing the Treasury Manager. Profiting off the UST / LUNA collapse was not a priority for Wonderland. However, reducing the debt for Abracadabra most likely was.

The use of Wonderland’s treasury funds was a GAMBLE that placed 25% of the treasury at risk without the Treasury Manager’s consent—showing that Daniele makes unilateral decisions to do what he wants with Wonderland’s funds.

Wonderland was used by Dani to bail Abracadabra without permission and took a hit of $9mm that could’ve been a lot worse if it weren’t for the active management of our elected Treasury Manager, Skyhopper.

Merger
The topic of a merger is one that left a sour taste in the mouth of a lot of frogs. Daniele has indicated multiple times that he believes a merger under Abracadabra is what’s best for everyone.

While there are currently no details on this merger and anything we could say would be speculation, his vision of merging under Abracadabra re-enforces the sentiments of biases and conflict of interest against Wonderland.

Proposed Role, Limitations, and Responsibilities for Daniele Sesta

Daniele’s primary motivation and vested interest seems to be with Abracadabra. This presents a massive conflict of interest with Daniele’s current powers at Wonderland, as we have witnessed with the recent improper treasury usage during the Terra Luna collapse.

Since Daniele is one of Wonderland’s founders, acting on our behalf makes total sense. However, the treasury is a core component of Wonderland and playing with it needs higher accountability.

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Daniele Sesta; Co-Founder & Chief Strategist of Wonderland

As co-founder and Chief Strategist of Wonderland, Daniele plays an important part in the protocol. Many members of the community look for his guidance. Daniele has indicated that his vision of the ecosystem would be to merge under one protocol, but until we cross that bridge, each protocol should do what is beneficial to them.

That being said, in the spirit of becoming more organized and act like a real corporation, the following responsibilities are proposed:

Proposed Duties:

• Seek out investment opportunities for Wonderland and present them to the community and/or Treasury Manager.

• Continue as a member of Wonderland’s multisig.

• Be meaningfully involved in the Wonderland community as the face of the project.

• Promote and coordinate potential collaborations within the Frog Nation ecosystem beneficial to Wonderland.

• Ensure/delegate to an elected official the responsibility the implementation of passed Wonderland Improvement Proposal

• Ensure/delegate to an elected official the responsibility to ensure plans and strategies are communicated to the community.

• Properly disclose and communicate potential conflicts of interest to the team and community to ensure that decisions are not made at Wonderland’s expense.

• [Other potential duties as discussed by the community]

While it is reasonable to believe Daniele may need to make certain use of the treasury, these should not be made without the Treasury Manager’s consent.

In case of a disagreement from the Treasury Manager, if no compromise can be reached, further consultation should be done with the rest of the team members (if required) to ensure that the involved parties are not being unreasonable.

When judged necessary, the situation may be brought in front of the DAO for final decision. However, any use of funds overruling the Treasury Manager’s objection should be reported to the DAO as soon as possible to implement corrective measures if required.

• Yes, implement these roles, limitations, and responsibilities for Daniele Sesta as Co-Founder & Chief Strategist
• No, Don’t implelment these roles, limitations and responsibilities for Daniele Sesta

[Manuel]

The main propose of the deals should be to benefit wonderland.

[Deal]

Perhaps we need more clarification in regard to the multisig here as well. Having clearly delegated roles and limitations is great, but will it be followed if the multisig can override it anyways “for the benefit of the collective”? This proposal, as written, would indicate a verbal agreement of SkyH having the end say, but would not revoke the multisig rights of anyone. You can see the issue here…

[kyle]

as well as what has been proposed here we really do need to look into the multisig issues.

[Patchy319]

@0xFry

GAMBLE

Whoever is on the multi-sig should be public tbh.

And yea ive talked a lot in the wonderland discord about how im grrrr over the UST thing, abra merge, etc.

I think if Dani is no longer interested in Wonderland, he should pass it on to the people who are still dedicated to it and interested in it surviving. Instead of trying to dissolve and abandon his most successful product.

[MattMacGyver]

This is a good point to bring up. I believe we should get the whole multisig situation sorted out with or without this proposal moving forward. Who is the other party that signed off on the multisig? I’m honestly surprised there is a party on the multisig that we aren’t aware of at least their alias.

The community might benefit from an entire discussion around the multisig, the involvement and necessity of each signer, and each signer’s level of commitment to maintain their respective responsibilities. Let’s say Maki is just a fail-safe, extra person with the keys in case everyone perished (god forbid). That’s a responsible contingency plan. It may be helpful to the community to hear from Maki in some way that reaffirms their commitment to fulfill that duty (and only that duty) if the need were ever necessary. As for the rest of the signers.

The community lacks a solid grasp on who all is responsible for signing transactions and who can’t be counted as an “accountable check and balance”. The multisig process, imo, is especially useful for ensuring the transactions are sound and reasonable trades resulting in benefit for the protocol. Multisigs are Not just “hey you aren’t stealing this right?”. There should be discourse between them, a bit of due diligence by All signers on the transaction, and each should accept that in the event of failure they are all taking on some of the accountability in the trade.

[ns2808]

This is a good initiative @0xFry and something most DAOs have to go through I guess once the project gets to a certain size.

I’d just like to point out a few things here: we don’t just want Wonderland’s token price to get back to backing. What we want is for it to trade ABOVE backing, as people put a price on what they think future revenue share will look like.

In my opinion, currently the ONLY person in the Wonderland team that can make that happen is Dani.

So of course we want visibility, safeguards in place and an informed discussed about the merits of a merger with Abracadabra but we also very much want Dani as involved as possible in Wonderland.

Just my 2 cents on it.

[The_Ferengi]

With Abracadabras intent of merger I think there is too much conflict of interest for Daniele to remain even on the multi-sig.

[xlx]

uh oh, somebody wants the founder pacified…

Why we’re talking about kicking out danielesesta right after $wMEMO exhibits perhaps the best price performance in the entire market during the Luna crash is what I don’t understand. This here is like the only cryptocurrency that didn’t get entirely fucked out there last week.

It looks like OP thinks Dani is fucking WL merely because Dani happens to say “don’t know how to 20x” for $Spell after stating some amount of x lower than 20 for $wMemo, and similar confusions. I think the difference in numbers here is structural since securitization does not give you the same payment structure just because you have a collateralized asset in the equation…

/
Personal Stake: Dani basically loses his once-in-a-lifetime opportunity to seize everything he’s ever wanted if WL collapses; therefore I’m personally of the opinion to let him lose himself.

@0xFry

Daniele, with the help of an unknown mutisigner, used Wonderland’s treasury to save Abracadabra from potentially devastating debt to liquidate and purchase millions of UST tokens that were now being bag held by Wonderland instead of Abracadabra.

Do you not realize that if Abra went negative last week, WL would also automatically collapse. Instead, $wMemo is, what, still around $27k a piece?
Are you not aware that meanwhile $Avax went -%300 or something?
Are you not aware that meanwhile $Joe went from above $1.00 to below $0.50? Same with BenQi, and these are basically tokens with lending-based volumes…

After all that’s happened last week, I don’t understand this tbqh.
I think you’re underestimating how integrated Abra & WL to one another.

/

@0xFry

Daniele, with the help of an unknown mutisigner, used Wonderland

Most the OP post kinda sounds like how the Professor framed some normal stuff that he found on SkyH’s resume right before Sky took the seat, and made him look really suspicious and incompetent at once. Cut down on the true crime genre in your daily routine imo.

@0xFry

a GAMBLE that placed 25% of the treasury at risk without the Treasury Manager’s consent

The TM was elected with rushed, almost non-existent, non-discursive governance. Obviously it’s a kid, and the only reason a random kid was elected without much care in selection is that Dani is your de-facto TM. So why do you cry now? Did you really short the market more than Dani did in the past 4 weeks? He was even actively vocal about this with WL people all the time.

Merger: Do you sell your $SOL today at $120, for example? Most likely not. Then why are we talking about some cherry-picked discourses and events from at least 3-5 months ago as if they’re the current situation with the mentioned proposals, or even the ideas surrounding it, when it comes to the Abra merger? Move on. Even any further merger proposal from now on will have to be entirely different in all terms.

/

tl;dr:

• the first half of the OP above says Dani is all bullshit and should be out.
• and then at the end of the post it lists a giant list of top-level functional responsibilities as the proposed list of responsibilities for Dani.

I don’t understand: do you want the guy out, or do you want to make him do everything by himself? Too much confusion here imho… Maybe it’s only because you held wMemo last week and therefore made some real gains in a market crashing down like crazy so the dollar signs cha-chinging in your eyes are preventing you from seeing clearly…

[NalX]

Tbh I don’t read this as a get rid of Dani at all. Dani himself said we should look at being more legit. Having more defined positions/structure is part of it. I think we need it for Wonderland. That was part of my main criticism when we first elected a TM.

The conflict of interest stuff has been brought up since as long as I can remember. When Sifu was in charge, people were asking where was Dani. Saying how he didn’t care about Wonderland. That narrative is still on going. That is one of the reason why he believes a merger is the ultimate solution. That way he focuses on one protocol, not three.

However, until then, Wonderland money should be used to help Wonderland. You bring a good point with the MIM depeg. The issue here isn’t that he used Wonderland money. It’s the way he did. It was done without consulting the person in charge of the money ™ and gave the perception that he bailed out Abracadabra and Wonderland took the hit. Hence, the perception of a conflict of interest.

In this case it was Dani, but this also brings the question of, should members of the multisig be able to take out 25% of the treasury without consulting the TM ? I’d say no. Having better communication across the team is a win win. Some agreements can be made for emergency cases, but it shouldn’t be a 57 million surprise in risk.

We also potentially have an unknown person on the multisig. That is a security risk. Dani most likely trust them, but why are the other person disclosed and not that one ? We keep creating our own FUD. I made a twitter thread on January 17 about some of the issues we had, including creating our own FUD. Somehow, we’re pretty much still at the same place.

Also, you’ve got to do better research on our TM. You are also crediting Dani for price stability, when the stability comes from the buy backs being executed by the TM.

As for the duties described, that is pretty much what he is already doing as far as I can tell. This project has always needed more people to increase efficiency, and it is still the case today. Being reliant on one person makes no sense. We need more people in charge/Dani to delegate, but we don’t have any. So let’s start by solidifying those we have and let Dani focus on building.

[endelcardoso]

I never saw this idea of merger good. Wonderland is a DAO, Abracadabra is a whole different thing. Makes no sense.

This episode of UST/LUNA and the 57mm isn’t good for holders and for other people that think about investing here. We need a good environment to attract more money to the DAO, frens. This kind of thing can bring the shadow of a “FUD wave” (all over again).

TM should be the main guy to say yes or no of this big transactions.

Just voted “yes”

[kyle]

I completely disagree with all your viewpoints. I suggest you read it all again tbh. also maybe go back and look a the entire governance process for the appointment of sky.

[Deal]

There’s a difference between giving someone a defined role, and getting rid of them completely. I’m not sure if you fully read the proposal, but it’s meant only to outline and define his role—nothing more and nothing less. There needs to be some delineation between roles and job descriptions otherwise there will be “power struggles” and unnecessary disagreements between holders, the TM, Dani, and others. By defining roles and responsibilities it prevents a lot of confusion, disagreement, and distrust that may otherwise fester.

[diaryofmatt]

Great initiative. Let’s move this to WIP!

[hypermassiv]

We’d have to go through RFC stage first before it can be moved to WIP with a proper proposal.

[hypermassiv]

Rules are only as effective as their enforcement. I think what’s lacking in this discussion, is what are the checks/balances and consequences if said roles and duties are being overstepped.

Of course, in real life there are laws and legal avenues but these are mostly non-existent in crypto. I’d like to bring up a discussion on having perhaps a three-strikes policy, where whoever that have a defined role in this project should be put to a mandatory vote of stay/remove after 3 infractions of their duties and responsibilities.

I can foresee of course that there are going to be certain instances that fall within a grey area so we’d have to consider who’s going to be judge and jury should such instances occur.

[jclemons]

I’d say the jury be all Mods or community but not core team because of conflict of interest.
But there needs to be some teeth to violations I think 3 strikes is too many. I say 2.

[NalX]

Edited your post to be more civil.
I think I captured the essence of it.

[0xFry]

No one is fighting the merge in this proposal. We have yet to receive any details of said merger. This proposal is to have safeguards and responsibilities in place for our elected officials in the ‘meantime’.

A merger could be as great as you’re saying but we’ll cross that road when it comes.

[Deal]

For those that have informally voted no, what are your concerns regarding the proposal?