Conversation with Zachxbt: Review of the 0xSifu scandal, criticism of "encrypted idolization"
Original Author: Rekt
Original compilation: Wu Zhuo, Wu said blockchain
DeFi has restarted the illusion of the origin of finance.
Earnings strengthen, but a bad trip reveals dark secrets.
Greed, deceit, and felons all have their place in the Wonderland of decentralized finance.
How did we get here?
Rekt went down the rabbit hole.
When Olympus fell, other Ponzi schemes had to turn.
Daniele Sesta, the self-proclaimed leader of the Frog Nation, has quickly "raised fame" in the DeFi community with his fusion of populist Twitter content and tokens that have made many people rich.
However, every idol relies on their lesser-known teams, who often do most of the work.
We saw $TIME's mismanagement when the fantasy faded from Sesta's Wonderland.
On-chain sleuth ZachXBT forced Sesta to admit the identity of its CFO 0xSifu.
Michael Patryn, formerly Omar Dhanani, is the co-founder of QuadrigaCX, notorious for fraud and the mysterious disappearance of founder Gerald Cotten.
In addition to his involvement in Quadriga, Patryn pleaded guilty to credit card fraud, burglary, grand larceny and computer fraud.
Sifu has already become very rich through Wonderland and his previous crimes, why continue?
Why would Sesta risk its reputation to work with this guy?
Once Sesta found out, why didn't he confess?
This story comes directly from Twitter.
As ZachXBT wrote:
The tweet garnered about 3 million likes in 24 hours. The story had a huge impact.
To find out more, we caught up with Zach:
Rekt：What sparked this investigation? What made you question 0xSifu's background?
Zachxbt：I first posted about $TIME back in October when I noticed the game's release was under fire from CT insiders and a secret seed LP.
Over the next few months, due to the lack of transparency, I became suspicious.
For example: mixing personal wallet and treasury funds, no documentation, highly centralized decision-making.
Discussed this a lot with Dani.
I got a message last week that Sifu is not who he says he is. Finally went to Dani for this matter. Sifu.eth also has some links to Quadriga.
Rekt: Have you considered the motives of those who provided the intelligence? Why do you think this is the case?
Zachxbt：Can we skip this question?
Rekt: When you confronted Daniele, he already knew the identity of 0xSifu. What happens if there is no prompt? Will Daniele keep 0xSifu's identity secret?
Zachxbt：From my information with Dani (see my post), as well as publicly released statements, it appears his identity is being kept secret.
I can't speculate too much about what will happen. You're just risking the community's money. Let them decide for themselves through governance. The history of 0xSifu is not a coincidence.
Rekt: What do we know about 0xSifu? Why did Daniele choose him for the role, why would he try to protect him? What made him worth the risk?
Zachxbt：Sifu first came to prominence after the Ruler/Cover fiasco, when he lost his coffers to Yearn. Sifu has to take a lot of responsibility for this, but it was opposed by many people at the time.
According to Dani, they met as early Abracadabra investors at Sifu DM. They exchanged ideas and slowly began to collaborate over time.
Maybe his dealings with Sifu (unknowingly Omar) made him look back on his own history.
But Dani says he believes in second chances.
A vote was then held, proving that the Frog Kingdom did not share Daniele's beliefs.
So, Sifu was out, and it wasn't just Daniele's reputation that was damaged.
Andre Cronje recently launched his new project in collaboration with Daniele. The timing is noteworthy...
Would anyone want to harm the reputation of Cronje's new venture by joining forces?
Aside from personal concerns, the incident has broad implications for the entire DeFi market.
MIM and UST panic has led to record daily trading volumes on Curve Finance as the stablecoin MIM has been under heavy selling pressure. This wallet alone has been steadily dumping around $130 million in MIM since the news broke.
what is happening now
The community is not happy.
Despite initially supporting Patryn, Daniele Sesta has now issued an apology, and it seems the fate of Wonderland is now in the hands of the community.
Is this an admirable move, or is he betting that his holders might choose to look the other way?
We will remember that Daniele Sesta was forced to admit this fact, if not for the whistleblower, who would have continued to hide the identity of this convicted liar from the community.
These dirty secrets are exactly the type of criticism DeFi often faces from regulators, TradFi, and the public. Even if most people are unhappy with the current system, how can we expect scandals like this to convince new users to give up their online security?
TradFi regulators will take advantage of this and easily win the debate against DeFi.
However, the facts are not all negative. Even under this intense stress test, MIM did not fail and the Wonderland protocol performed as expected.
While this will take a toll on the industry’s reputation, DeFi is here to stay.
Sesta is the latest example of a pernicious, if not desirable, idolization trend in DeFi since the launch of Cronje and YFI.
We create an environment where individuals can be worshiped like gods. Here, multi-million dollar crypto scams and hacks are ignored and forgotten. Anonymous DAO members can do whatever they want with vaults worth hundreds of millions of dollars.
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