Rumors of the arrest of the Multichain crew have despatched shockwaves all through the Fantom ecosystem. Regardless of buying and selling volumes of $129 million, the worry, uncertainty, and doubt (FUD) have resulted in a 5x enhance in each day bridging volumes. Nevertheless, upon nearer examination of the on-chain information, the bridging volumes don’t present a big signal of panic.
Fantom’s Dangerous-Wrapped Token Publicity
In line with a Twitter thread by the crypto researcher DeFi Ignas, Fantom (FTM) is probably the most uncovered to Multichain’s wrapped tokens. This implies that Fantom is especially weak to any adverse affect which will end result from the rumored arrest of the Multichain crew. It is because Fantom has vital publicity to Multichain’s wrapped tokens, with 35% of its complete worth locked (TVL) depending on these wrappers.
As well as, Multichain points 40% of non-FTM belongings, which is equal to a large $650 million. Which means that if something had been to occur to Multichain, it may have a big affect on the general worth of those belongings.
Moreover, Multichain handles 81% of Fantom’s complete stablecoin market capitalization. Stablecoins are digital belongings which are pegged to the worth of a real-world asset, such because the US greenback. They’re usually used as a option to hedge towards market volatility. Nevertheless, If something had been to occur to Multichain, it may have a big affect on the worth of those stablecoins and trigger instability within the Fantom ecosystem.
Fantom Traders Keep Calm Amid Multichain Arrest Rumors
In line with Ignas, there ought to have been a big outflow of Whole Worth Locked from Fantom as a consequence of its reliance on Multichain. Nevertheless, the info exhibits that the quantity withdrawn was only one% of its complete TVL of $1.78 billion, which signifies that there’s not a lot panic out there.
Moreover, whereas the TVL has dropped by 9.55% in USD, adjusting for the value of FTM exhibits no vital outflow of capital. The clearest and solely signal of panic is the Multichain Liquidity Suppliers (LPs) on Fantom, with a complete of $33 million being withdrawn by LPs from Fantom, and solely $1.7 million in deposits.
Nevertheless, what’s most worrying is the shortage of communication from the Multichain crew. It has been reported that the present Multichain CEO Zhaojun hasn’t been on-line in per week. This has left many buyers and merchants within the cryptocurrency market feeling unsure about the way forward for the undertaking.
Moreover, Multichain has reported that among the cross-chain routes are unavailable as a consequence of power majeure and that Kava, zkSync, and Polygon zkEVM routes had been briefly suspended. There have been additionally 83 transactions pending for greater than a day, which has raised additional issues amongst buyers and merchants.
Featured picture from Unsplash, chart from TradingView.com