Andre Cronje has quit “contributing” to the DeFi and cryptocurrency sectors, days after his new project faced criticism over a security flaw that allegedly caused user funds to disappear from liquidity pools.
Announcing the decision, Nell said that around 25 decentralized finance (DeFi) applications will be “terminated” starting from April 3.
These include popular protocols Yearn Finance and Keep3r Network, Bribe Finance, Solidly (a new project that went live on Feb. 24 hitting $2.24 billion in total value locked in three days), and others.
Analysts warned that Cronje’s sudden departure could put billions of dollars of investor funds at risk.
“Andre and I have decided that we are closing the chapter of contibuting to the DeFi/crypto space. There are around 25 apps and services that we are terminating on 03 April 2022.”
Nell said the decision has been coming for some time. He pointed to a blog post published by Cronje in January last year, “Building in DeFi Sucks”, as more than an isolated rant.
“Unlike previous ‘building in DeFi sucks’ rage quits, this is not a knee jerk reaction to the hate received from releasing a project, but a decision that has been coming for a while now.”
DeFi tokens crash
Andre Cronje did not respond to a request for comment from BeInCrypto.
SOLID, the native token of Cronje’s new protocol, Solidly Exchange, plunged 66% to $1.14, as at the time of writing. Fantom (FTM) tanked 16% to $1.40.
The total sum of assets managed under the Fantom protocol has fallen by more than $4.4 billion since March 3, the time of Cronje’s supposed exit.
Over the previous 24 hours, Fantom’s total value locked has dropped 15% to $6.93 billion, per data compiled by DefiLlama.
Cronje quitting could cost billions, worse than Dani Sesta debacle
Rumors about Cronje’s departure started circulating on Twitter on March 5 after updates to his LinkedIn page showed the prolific coder had left Fantom Foundation, Yearn Finance, and the Ethereum local community.
Earlier in the week, Cronje deleted his Twitter account without explanation. Michael Kong, the CEO of Fantom, confirmed that the developer was stepping back from public life “for the time being” because he was “getting too much hate.”
The situation has led some analysts to warn that billions of dollars of investor funds may be at risk.
“What are the implications of ‘terminating’ active projects that people are using and have invested in?,” crypto analyst, Shivasak Huja, quipped rhetorically.
“If it means these projects are shutting down, then Andre just publicly rugged several multi-billion-dollar projects. Projects don’t need to die when the lead devs quit. This is a mess, even worse than Daniele Sestagalli’s debacle. Decentralized projects led by cult figures with inflated egos have similar risks as centralized projects.”
While projects may continue to exist on-chain even after the founders leave, Cronje’s sudden departure could have unexpected outcomes.
It may lead to investors “dumping” assets en masse, causing prices to fall. Some projects may even collapse, say, analysts.
Larry Cermak, vice president of research at The Block, called the decision by Cronje and Nell “pretty insane”.
“Unless just some regulatory psyops and coming back as anons, this is pretty insane. The decision has been coming for a while now but Solidly just launched a few weeks ago…lol,” he mocked in a tweet.
“I get the contracts are not upgradable and no admin necessary but that still doesn’t matter much in DeFi. Attention spans are short.”
Solidly security issues
The decision by Cronje to quit DeFi comes hardly a week after some users alleged that a bug in the Solidly Exchange smart contracts allowed funds to disappear from liquidity pools.
Users may have lost hundreds of thousands of dollars swapping between assets on the platform. Cronje refuted the claims as false, stressing that no funds had been lost from the protocol.
“There have been no smart contract bugs identified in any of the live contracts,” he said at the time, blaming users for “trading via pairs that don’t have liquidity.”