SPELL - Where has the magic gone?

Assets covered: SPELL

Metrics used: Price, MVRV 7D, Supply on Exchanges, Daily Active Addresses, Age Consumed, Active Deposits,

Charts: https://app.santiment.net/s/1jd6xI5_

Looks like there's really no shortage of drama coming from the Defi 2.0 darlings or as some of you know it best as the Frog Nation.

For the uninitiated, Frog Nation is a collective of projects which work together to push Defi and the overall crypto industry forward. Currently consisting of Abracadabra.money , Popsicle.finance, Wonderland.money and the most recent member, Sushi.com.

The bombshell news by zachxbt revealed that 0xSifu , the CFO of Frog Nation (handling 9 figs treasury) is actually the Co-founder of QuadrigaCX, Michael Patryn - A convicted felon, serial scammer, and all-round fraudster.

Funds are SIFU

For those unfamiliar with the QuadrigaCX story, here's a nice recap.

CT user MidasTheFool has a nice summary of Michael here.

So yeah, not exactly someone you would want to handle 9 figs worth of treasury.

But since the news broke, Daniele Sesta (the brainchild behind Frog Nation), was pretty chill about things (He even knew about Sifu's past but did not care. As long as no one found out) and that didn't sit too well with the community at all.

Sifu's all cool guys - Twitter

Eventually, community pressure forced Dani to put up a proposal to remove Sifu.

Sifu as Treasury Manager - Snapshot

Currently, 85% are saying to replace Sifu and almost 15% are saying to keep Sifu.

Sifu's own personal wallet has been rather busy since the news broke, going from 9 figs to 8 figs now.

With all the negativity around the Frog Nation, it's no surprise that all associated projects have been in the red (it's made worst when we are in a crypto bear trend). But for today, we will be focusing on SPELL and let's take a look at how things are.


TIME price action - Sanbase

Given the huge amount of volume we are seeing, it sure looks like every SPELL holder is trying to drop it like it's hot.

Daily Active Addresses (DAA)

Daily Active Addresses - Sanbase

It seems that signs were there all along, the last top saw a divergence in Price vs Daily Active Addresses (Growing price, falling DAA), which usually isn't a healthy sign at all.

There's just no one else coming to prop up the price.

Fast forward to today, we are seeing huge spikes of DAA but the price action is quite different now. Did we hit a capitulation level?

Supply on Exchanges & Active Deposits

SPELL Supply on Exchanges - Sanbase

The start of the year hasn't been a good one for SPELL holders as Supply on Exchanges trended up for the most part of the year, indicating significant sell pressure was present.

There also appears that some might have accumulated following the initial sell off that lasted till 24th Jan.

But no one could've prepared them for the 0xSifu news, which saw a huge spike in Supply on Exchanges that overshadowed whatever it was for the past month.

The panic is real. The trading volume as seen in the price section earlier pretty much confirms the panic sell off. However, someone did absorb most of it though, given that the price didn't tank as much as it should with sure huge volume and sell pressure.

Active Deposits - Sanbase

Perhaps indeed, we just witness the weak hands offloading to the strong ones. Which is a good sign for creating bottoms.


MVRV 7D - Sanbase

SPELL's MVRV 7D which measures the short-term profit/loss of holders is showing that we are still safe from the the danger zone, as all short-term holders are at a loss at the moment, which may leave us some room to go before risk is increased significantly.

That said, if BTC continues to dump, it's highly unlikely SPELL will hold its ground.

Age Consumed

Age Consumed - Sanbase

How are early holders of SPELL doing?

Based on Age Consumed, which shows the amount of tokens changing addresses on a certain date, multiplied by the time since they last moved, we are seeing spike clusters forming, suggesting that large holders that have held the coin for some time are now spooked as well.

MIM is not spared

With all the negativity surrounding SPELL, it's only due time that MIM (algo stablecoin of SPELL) is in focus.

There's a real fear of MIM depegging and a contagion that'll see a good part of Defi crumble as MIM is used in quite a number of protocols and UST (another large algo stablecoin).

Here's a nice summary on MIM's depeg risk and here's another regarding the impact on UST.

MIM depeg - Sanbase

And depeg it really did. MIM is now $0.9797 USD instead of $1. Trading volume and price still hovering at these levels are suggesting that the arbitragers aren't exactly bringing things back to peg.

Instead, it suggests that people are rushing to exchange MIM for any other stablecoin.

Once the depegging possibility started to spread, large players in the space have began to exit from MIM to avoid any risks.

Here's Alameda exiting the MIM-3CRV pool.

Alameda exiting MIM-3CRV pool - Etherscan

To get a sense of how massive the exit was, below is how the MIM-3CRV pool looked

MIM-3CRV pool - Curve.fi

No one really wants MIM at the moment. The entire pool's value has dropped by -65% and the pool ratio is just out of whack. It now consists of mostly MIM (93.90%) and 3CRV at 6.10%

We also observe another whale exiting 3CRV and started to convert his MIM stash to USDC.

Historical balance of 69secrets.eth - Sanbase

The wallet has been selling in chunks

MIM whale offloading in chunks - Etherscan

This large MIM holder is finding himself/herself in a tricky spot, as there's still more than $100M of MIM, should the wallet crush the price further or wait?

You can track the whale here.


As if the bear trend wasn't enough, the suddenly revelations have put SPELL and associated protocols in a bad light.

Short-term holders are in the red, and long term large holders are showing signs of being spooked. Capitulation is observed not just from SPELL but also MIM (fear of depeg).

If there's a bottom forming ideal scenario, this might just be it as there are serious amounts of fear and uncertainty surrounding it.

Now the question is, whether will the Frog Nation survive? What do you think?

Disclaimer: The opinions expressed in the post are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.

Thanks for reading!

If you enjoyed this insight please leave a like, join discussion in the comments and share it with your friends!


Conversations (0)

No comments yet
Be the first to comment