Fantom (FTM), a blazingly fast and scalable blockchain network, finds itself at the edge of uncertainty as it grapples with a perilous situation tied to its reliance on Multichain, its official cross-chain bridge. The daunting truth emerges as a significant portion of the colossal total value locked (TVL) on the Multichain network originates from Fantom, causing apprehension to surge regarding the potential repercussions of recent developments.
Evaluating the Fallout
According to the latest reports, the Multichain network boasts an eye-watering TVL of around $1.76 billion, and remarkably, Fantom makes up a staggering 36.7% of this sum. With Fantom’s assets soaring to approximately $1.66 billion, it becomes apparent that a substantial chunk of these assets comprises wrapped assets of Multichain, constituting nearly 40% of the total.
As for stablecoins, the heavyweight on Fantom is none other than USDC, with a jaw-dropping 191 million USDC and an additional 82 million USDT assets predominantly issued by Multichain. These numbers unmistakably reveal Fantom’s immense exposure to Multichain, further intensifying concerns over any potential disruptions that may arise within the latter’s platform.
1/ Rumors are spreading that the Multichain team has been arrested.
— Ignas | DeFi Research (@DefiIgnas) May 25, 2023
The FUD resulted in a 5x increase in daily bridging volume.
What does other on-chain data reveal? pic.twitter.com/kqmuAOUxtp
Fortunately, as of now, most chains within Multichain continue to function without disruptions, and there are no indications of a depeg of USDC and USDT on Fantom. However, the mere existence of these rumors has already cast a shadow over Fantom’s market performance. In the wake of the news regarding potential issues at Multichain, the network witnessed an alarming 8% plunge in its price, reflecting the immediate impact of these uncertain circumstances.
The Fantom network is currently facing a challenging predicament as a significant portion of its assets are intricately linked to Multichain. This interdependence raises concerns about potential adverse developments that could have severe repercussions for the network. It is still too early to accurately forecast the outcomes of this situation, but it is crucial for investors and stakeholders to closely monitor the developments in the days ahead.
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