The Multichain system had an episode akin to a rug-pull, which rocked the cryptocurrency market. Rumors suggest that the Chinese government have detained members of the Multichain team and taken possession of the wallets, which include an astonishing $1.8 billion in multichain wallets.
The Fantom blockchain continues to be the most affected, accounting for 36.7% of Multichain's total $1.8 billion in total-value-locked (TVL) transactions. Nearly 40% of the $1.66 billion in total assets on the Fantom blockchain as of this writing have been wrapped on Multichain.
Multichain is one of the biggest blockchain bridges in the cryptocurrency industry, as we all know. As a result, it makes it easier to exchange tokens between different blockchains. The Multichain bridge has been used by well-known platforms like Ethereum, Binance Chain, Polygon, and Avalanche.
A blockchain that supports smart contracts and is powered by native FTM tokens, Fantom, is another blockchain that uses Multichain as its official cross-chain bridge. The major stablecoin on Fantom is 191 million USDC and 82 million USDT assets, which are mostly issued by Multichain, according to cryptocurrency journalist Colin Wu.
Fantom Running Normally
Fantom posted on Twitter that its Multchain Bridge is running normally as worries over the Multichain issue spread throughout the cryptocurrency market.
This guarantee has stopped the native FTM token, which is now trading 0.75% lower at $0.33 and has a $925 million market cap, from experiencing a significant price correction.
The Fantom Foundation has removed its money from the liquidity pools on Sushiswap out of an abundance of caution in the wake of the Multichain incident. As of May 24, the foundation had sold $2.4 million worth of MULTI, the Multichain protocol's native token.
Director of the Fantom Foundation Andre Cronje commented to The Block:
“No point to LP at times of uncertainty. You can see in the wallet the funds haven’t been sold, as soon as Multichain is able to release a statement around this and clear it up we will LP again.”