Wonderland’s TIME Sets Low of $420 After Liquidation Cascade

The token's price has fallen 95% from its November 2021 peak.

Jan 26, 2022 at 10:04 a.m. UTC
Updated Jan 26, 2022 at 3:22 p.m. UTC

Shaurya is an analyst/editor for CoinDesk's markets team in Asia.

Wonderland’s TIME token slid to a record low on Wednesday, falling as much as 40% in 24 hours to just under $420 in Asian hours.

TIME has lost 95% of its value from its November peak of $10,000, becoming one of the worst-performing cryptocurrencies in the past few months during a broader decline that saw bitcoin, ether and other major cryptocurrencies reach prices last seen in mid-2021.

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TIME prices fell to lows of $420 in Asian morning hours on Wednesday. (CoinMarketCap)

Theories in crypto circles behind the sell-off included Wonderland developers selling part of their holdings and the unwinding of positions of overleveraged traders.

Liquidations occur when a trader has insufficient funds to keep a leveraged trade open. While these mainly happen on futures products, investors lending their cryptocurrencies on decentralized finance (DeFi) applications – in return for yields – are subject to liquidations when protocols automatically sell holdings if prices of staked assets drop below a threshold. This, in turn, causes prices to fall further, creating a ‘liquidation cascade.’

Wonderland’s TIME tokens are backed by a basket of assets issued over the Avalanche blockchain, giving the tokens an intrinsic value. TIME is what the platform calls “money” – a wholly decentralized means of value backed by liquidity provided by the platform’s users.

Wednesday’s plunge saw developers conduct a $5 million buyback during the Asian morning. “Looks like the bots and limit orders ran out of funds. I’m replenishing now and just did a $5mm buyback,” Wonderland developer Sifu wrote in a post on the project’s Discord channel.

The previous buyback occurred earlier this month, when TIME prices fell to under $830 from $1,400. Several millions of dollars worth of the tokens were bought by Wonderland developers to bring prices above their intrinsic value at the time, as reported.

Meanwhile, some blockchain sleuths pointed out that Wonderland’s chief developers took on millions of dollars in losses after the sell-off. Sifu’s wallet saw $1.6 million of losses due to liquidations, while those on Daniele Sestagalli’s wallet reached $15 million.

TIME price recovered in European morning hours, and was trading above $610 at the time of writing.


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Shaurya is an analyst/editor for CoinDesk's markets team in Asia.

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Shaurya is an analyst/editor for CoinDesk's markets team in Asia.

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