Rumors of the arrest of the Multichain staff 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 improve in day by day bridging volumes. Nonetheless, upon nearer examination of the on-chain knowledge, the bridging volumes don’t present a big signal of panic.
Fantom’s Dangerous-Wrapped Token Publicity
Based on a Twitter thread by the crypto researcher DeFi Ignas, Fantom (FTM) is essentially the most uncovered to Multichain’s wrapped tokens. This means that Fantom is especially weak to any unfavourable affect which will outcome from the rumored arrest of the Multichain staff. It’s 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 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 might be pegged to the worth of a real-world asset, such because the US greenback. They’re typically used as a approach to hedge in opposition to market volatility. Nonetheless, 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
Based on Ignas, there ought to have been a big outflow of Whole Worth Locked from Fantom as a consequence of its reliance on Multichain. Nonetheless, the info exhibits that the quantity withdrawn was only one% of its complete TVL of $1.78 billion, which signifies that there’s not a lot panic out there.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 worth 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and solely signal of panic is the Multichain Liquidity Suppliers (LPs) on Fantom, with a complete of $33 million being withdrawn by LPs from Fantom, and solely $1.7 million in deposits.
Nonetheless, what’s most worrying is the dearth of communication from the Multichain staff. It has been reported that the present Multichain CEO Zhaojun hasn’t been on-line in every week. This has left many buyers and merchants within the cryptocurrency market feeling unsure about the way forward for the mission.
Moreover, Multichain has reported that a number of the cross-chain routes are unavailable as a consequence of drive majeure and that Kava, zkSync, and Polygon zkEVM routes had been quickly suspended. There have been additionally 83 transactions pending for greater than a day, which has raised additional considerations amongst buyers and merchants.
Featured picture from Unsplash, chart from TradingView.com