Network of DeFi crypto protocols Frog Nation in chaos
Crypto
February 1, 2022
It’s anarchy in Frog Nation. A group of crypto projects, including Abracadabra ($SPELL), Popsicle Finance ($ICE) and Wonderland ($TIME), worth a combined $5B at their peaks is falling apart — showing just how risky crypto can be without proper due diligence…
Grab some popcorn and sit back…
The unraveling of the great Frog Nation
Frog Nation is a collective network of decentralized crypto projects designed to grow together with the aim of recreating the financial system on the blockchain.
- Last week, news broke that the group’s CFO — with the pseudonym SiFu — is actually Michael Patryn, co-founder of failed Canadian crypto exchange QuadrigaCX.
- In 2019, QuadrigaCX turned out to be a ponzi-scheme — with $169M in crypto lost after its other co-founder, Gerald Cotten, was reportedly found dead in India (60% think he’s still alive).
The community was not happy to discover an ex-felon who spent 18 months in federal prison and pleaded guilty to credit-and-bank fraud was the one managing billions in treasury… With SiFu now voted out, the fate of the projects remains uncertain.
Anon CEO — what could possibly go wrong?
In the stock market, no one is investing in companies with an anonymous management team. But it’s different in crypto — where anon culture is popular.
In some cases, founders remain anon for fear of being targets of scams, hacks and even threats. But other times, there may be more nefarious reasons…
- Popular: Satoshi Nakamoto — the creator of Bitcoin — remains anonymous after 12 years.
- Unpopular: OlympusDao ($OHM) —another crypto project under heat for being operated like a ponzi scheme — is run by anon founder, Zeus.
With anon crypto founders, there’s always the risk they could run off with the project’s money.
The scary part: The projects had billion$ valuations at their peaks. Wonderland — the group’s biggest project — was once a top 100 token with a market cap of $2.6B in November. Since then, its token value has fallen 97% — most of which happened before the news.
Investors: Crypto is wildin’
We’re still early in crypto — so many of the guardrails that protect retail investors aren’t in place. Those chasing returns through decentralized exchanges are more prone to scams.
- Playing it safe: Popular crypto exchanges like Coinbase avoid this by only listing tokens vetted by their team.
- Be smart: Invest in crypto projects where the founders are “doxxed” — meaning they’ve revealed their identity.
Crypto moves fast — even a billion$ crypto project can unravel in days.
