- Pact’s core developer left the $10.5 million Algorand project, saying it has funding problems.
- This is the latest setback for the decentralised exchange, which was recently rocked by a scandal involving a former community manager.
- Pact’s problems threaten to spill over to other Algorand projects.
The setbacks are coming hard and fast for Pact. The largest decentralised exchange on the Algorand blockchain is reeling from a scandal involving a former community manager who was accused of rigging a giveaway, and it has lost its core contributor, who says the project faces a bleak financial outlook.
Dojo Dujoor, the pseudonymous main contributor to Pact, said via a Discord post earlier this week that he is stepping down. Dujoor expressed fears about the future of Pact and Algorand’s DeFi ecosystem, citing an inability to secure additional investment to extend the project’s runway.
“The unfortunate reality, after giving months of blood, sweat and tears, was that every single prospective party considered that anything Algorand-native was ‘currently un-investable,’” Dujoor said.
Dujoor is well known in the Pact and broader Algorand community, where others have confirmed that the developer has left. We were unable to reach Dujoor for comment.
Pact is the third-largest DeFi protocol on Algorand and is the blockchain’s biggest decentralised exchange, DefiLlama data shows.
The protocol’s total value locked — a metric for investor deposits in DeFi — has plunged by almost 50% from its $20 million peak last April to $10.5 million.
The Pact problems may cause more trouble for Algorand, which lost its biggest DeFi protocol Algofi in July. The Algofi team blamed a “confluence of events” in a blog post for its inability to continue running the project.
For Algorand proponents, Algofi’s demise means the remaining DeFi majors like Pact are now too big to fail — if they do, it could seriously damage the blockchain.
Several Algorand project teams, including Algorand-based digital asset bridge Algomint, have offered to help steady the ship. Algomint did not respond to requests for comment and clarification on what that help may entail.
Algomint has said that Pact’s tech team is still working on the protocol and that there are plans to hire a new core contributor to replace Dujoor.
“Algomint will be steering the pact ship during this transitional period,” Algomint tweeted from its official X account.
‘Getting brutal out there’
Dujoor said Pact has been working on securing additional funding since February.
The team had held out for a miracle until it learned in August that investors were not keen on backing Algorand-native projects, Dujoor said.
“I won’t comment on any other project here, as it’s not my place, but what most don’t see beneath the surface is that it’s getting very, very brutal out there,” he added.
Because of the funding issues, Dujoor said they “will be stepping down from the team” and will be supporting “a handover to keep things business as usual in here.”
Dujoor’s exit has not led to massive withdrawals from the protocol. There are, however, rumblings that Pact may have exhausted its runway.
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The farewell note attempted to assuage fears over the short-term viability of the protocol. It said there were sufficient funds to pay out rewards for existing farms during the third quarter. No assurances were provided beyond that.
Dujoor also addressed fears of a possible rug pull. Rug pulls happen in DeFi when developers suddenly pull liquidity from a project, rendering investor funds worthless.
“No one has any access to any pools or farms,” Dujoor said. “They are immutable and cannot be accessed by anyone but the depositors.”
Despite these assurances, several investors expressed unease at the situation.
Rigged giveaway
Dujoor’s exit comes as Pact still reels from the scandal involving its former community manager known simply as Choppa.
Pact organised a giveaway in August to reward two lucky winners with 51,000 ALGO tokens, currently worth about $4,800.
Choppa, despite being a core Pact team member, entered the competition and won 50,000 ALGO tokens. Choppa did not use his publicly disclosed X, formerly Twitter, account and wallet addresses to participate in the giveaway.
Pseudonymous on-chain sleuth ShaperofEntropy subsequently exposed Choppa as the mystery winner of the 50,000 ALGO token prize. Security researchers tend to be anonymous or use social media pseudonyms due to the sensitive nature of their work.
“The on-chain evidence was quite damning,” ShaperofEntropy told DL News, adding that there were “questionable coincidences” in the winner’s X account that led to Choppa.
ShaperofEntropy added that the case would have been difficult to prove conclusively without Choppa’s admission.
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Blockchain security experts can use heuristic analysis to show on-chain linkage between disparate transactions that might not be apparent to a casual observer.
While these linkages can establish relationships between different wallet addresses, there can still be room for reasonable doubt.
Without an admission of guilt by the parties involved, the only way to get absolute proof is if they transfer funds to an exchange that mandates customer identification.
However, Choppa admitted to entering and being one of the winners of the competition. He said he would return the ALGO tokens and stepped down from his post as community manager.
Choppa apologised for his actions and for putting the Pact project into disrepute.
“Harming the community that I have put so much work into building is the last thing that I ever want to do,” Choppa said in an apology shared on the Pact Discord.
The Algorand Foundation and Pact did not reply to requests for comment.
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at osato@dlnews.com.
