Rumors of the arrest of the Multichain group 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 every day bridging volumes. Nonetheless, upon nearer examination of the on-chain knowledge, the bridging volumes don’t present a major 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 susceptible to any adverse impression that will consequence from the rumored arrest of the Multichain group. It is because Fantom has vital publicity to Multichain’s wrapped tokens, with 35% of its whole worth locked (TVL) depending on these wrappers.
As well as, Multichain points 40% of non-FTM property, which is equal to a large $650 million. Which means that if something had been to occur to Multichain, it may have a major impression on the general worth of those property.
Moreover, Multichain handles 81% of Fantom’s whole stablecoin market capitalization. Stablecoins are digital property which might be pegged to the worth of a real-world asset, such because the US greenback. They’re typically used as a technique to hedge in opposition to market volatility. Nonetheless, If something had been to occur to Multichain, it may have a major impression 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 major outflow of Complete Worth Locked from Fantom as a consequence of its reliance on Multichain. Nonetheless, the information reveals that the quantity withdrawn was only one% of its whole TVL of $1.78 billion, which signifies that there’s not a lot panic out there.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 reveals 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and solely signal of panic is the Multichain Liquidity Suppliers (LPs) on Fantom, with a complete of $33 million being withdrawn by LPs from Fantom, and solely $1.7 million in deposits.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 shortage of communication from the Multichain group. 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 venture.
Moreover, Multichain has reported that among the cross-chain routes are unavailable as a consequence of pressure 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
