In recent Defi DAO Wonderland collapsed due to 0xSifu who is the co-founder of QuadrigaCX Michael Patryn, a former expert on scamming people, while the founder Gerald Cotten died suddenly in 2018 and took investors’ $250M into his grave. How come a DAO becomes a scam and rug pull investors?
0xSifu is an ex-criminal who ran a scam business and was sentenced to 18 months in federal prison for multiple counts of fraud. The verification process will have to be extensive to exclude bad characters.
Michael Patryn's previous name is Omar Dhanani. He is an expert on the Ponzi scheme. HYIP was the type of Ponzi scam that uses social media to recruit people and ask for their investments. Once a few people receive some rewards in the early stages, they will help to recruit more people. HYIP collapse will generally blame external factors such as a hack, a theft, or even a bad investment. It is a type of typical financial fraud to scam away people’s money.
Sifu’s Rug Pull
It starts with when the community votes away Sifu’s treasury manager power, Sifu starts his money transfer to a coin mixer and then into his own wallet. It brought skepticism around such a move.
Wonderland DAO Is Not Decentralized
Somehow, Sifu got his way to withdraw funds into his own wallet without a multisig voting approval that raised a concern on how DAO can run to prevent rug-pulling from one person.
For managing treasury, one needs to decentralize one’s power to fully control treasury funds. Rather, it needs a collective decision on how such funds should be distributed. Verification may also need to be implemented to elect contributors to guard for the community.
DAO has a long way to go. To be able to become a more decentralized organization, the collective voting process is essential for the community to operate sustainability.
Photo by olieman.eth on Unsplash
Note: the post was shared on multiple platforms here.
You can refer my previous article lists here
Digital Commodities- the Unlimited Resources of Commodities Has Born
Universal Income in Crypto Way
DeFi 1.0 is Officially Dead - Welcome to DeFi 2.0
NFT Has a New Purpose
How Many Ads Are Too Much - Floki Inu Ads Got Backfire
Metaverse - Second Life Era
Bitcoin ATM Adoption and Its Potential Security Vulnerabilities
When Corporations Are Running By Everyone
The Fundamental Value Is Irrelevant
Coinbase At Huge Reputation Crisis
CBDCs' Flaw Design
Regulations Start Hitting Crypto Exchanges
From Bitcoin Standard To Zero-Knowledge Proofs - Decentralization 2.0
Shiba Hits 1 Million Users (Army) Milestone: What is Next?
How To Avoid Crypto Scammers
Shiba Game - When Meme Meets Metaverse
Twitter CEO Steps Down - A Full-Time Bitcoiner
Change of Macroeconomy Landscape
CBDC Is Losing The Game
Doge The Future
El Salvador's Bitcoin
Market Sentiment Has Changed
Brief History of Ethereum and How Ethereum 2.0 May Over Promise
Crypto Is Getting Real
Who Cares If Craig Wright Is The Real Satoshi
Institutional Investors vs. Whales
What Happened In BadgerDao
A Proposal To Move Bitcoin Mining PoW Away
IMF Keep Crying Out, Crypto Adoption Keep Accelerating
Dogecoin Is Back to Top 10 But The Moon Shot Is Looming
How to Avoid The New Wallet Scam
Defi Enters To Crypto Bond Phase
What Types of Metaverse You Want
Global Regulations Are Coming Or Can They
IMF Did Have A Plan to Run Global Regulations
Doge Starts Moving
A New Malware Will Steal From Telegram
Smart Money Is Out, Institutional Money Is In
Wait, Web3 or Web 3.0 or web3
Airdrop?! Not So Lucky Anymore!
2022 Prediction #1: L1 Scalability
2022 Prediction #2: L2 Bridges
2022 Prediction #3: Zero-Knowledge Proofs or ZKPs
2022 Prediction #4: Regulated Defi On-Chain KYC
2022 Prediction #5: Institutional Crypto Adoption
2022 Prediction #6: Defi Insurance
2022 Prediction #7: NFTs-Based Communities - DAO 1.5
2022 Prediction #8: Metaverse and NFTs
2022 Prediction #9: Web2 Companies’ FOMO
2022 Prediction #10: Time for DAO 2.0
Craig vs People
Polygon Enters ZKPs - Plonky2
Crypto.com Backfire - When Centralized Crypto Service Panic
Coinbase NFT Marketplace
Coinbase Customer Service Alive
When Meta Patented Metaverse
When You Want Someone Forget About What You Did, Just Change You Name
When YouTube Enters Into NFTs
Facebook Just Did the Rug Pull
Bridging Between Web2 to Web3 Through NFTs
DAO The Way Part 1
DAO The Way Part 2
Who Is The Winner of The Crypto Adoption
DAO The Way Part 3
What You May Expect NFTs After 6 Months and Beyond
DAO The Way Part 4
Licensed NFT vs. IP Law
Wormhole Hack - It May Not Be a Bad Thing
Preventing Rug Pulls
DAO The Way Part 5
Disclosure: The article was written by a delusional author who is possibly a nut job without any questions whatsoever about expertise in the subject matters. You should not believe any words this author wrote or you may experience similar symptoms or even possibly become a nut job.