Frog Nation, a network of DeFi projects was recently hit by a shocking revelation when popular on-chain analyst zachxbt revealed in a Twitter thread that 0xSifu, the CFO of Frog Nation is in fact the co-founder of QuadrigaCX, Michael Patryn that defrauded investors to the tune of $190 million.
The news sent the Frog Nation-related assets like SPELL, ICE, TIME, and SUSHI, to plunge by more than 30%, and observers are now worried that Abracadabra’s MIM – one of the largest algorithmic stablecoins with a circulating supply in excess of $4.6 billion, as per CoinGecko may lose its peg.
With the current negativity surrounding the community of Frog Nation, leading data provider Santiment took a deep dive into the behavior of some key on-chain metrics primarily focusing on the SPELL token.
Firstly on the Daily Active Addresses [DAA] count, the last top in the chart above depicted a formation of divergence in Price vs Daily Active Addresses [Growing price, falling DAA], which the report observes as not a healthy indicator.
Based on the Age Consumed metric, which shows the number of tokens changing addresses on a certain date, multiplied by the time since they last moved, Santiment mentions forming of spike clusters, suggesting that large holders that have held the asset for some time are now spooked as well.
Investors of Frog nation are rattled by this
One of the crucial projects of Frog nation- Abracadabra’s MIM token stands to lose its peg following the negativity surrounding SPELL, as panic grip investors.
MIM at the time of the report was trading at $0.9797 instead of $1. Trading volume and price that are hovering at these levels show that people are rushing to swap MIM for any other stablecoin.
Once the possibility of de-pegging started to spread, large players in the space have begun to exit from MIM to avoid any risks, the report added. Ending on a cautionary note, Santiment stated,
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.
