The ongoing situation surrounding the blockchain platform, Multichain, has been stirring up increased fear, uncertainty, and doubt within the world of digital currency. However, the recent uproar within the community results from a tweet that displays a potential basis for a rug-pull. Based on the information shared in the tweet, it has come to light that Multichain holds almost $1.8 billion in different currencies across different chains.
Multichain has $1.8 Billion in locked assets under control, across several chains, not just Fantom. It will impact prices on all assets, across all chains if they did indeed rug, which I suspect is the case. pic.twitter.com/rqZPqvWlRC
— TruthLabs 💄 (@BoringSleuth) May 25, 2023
If Multichain makes a move to cart away with the funds, similar to that in a rug pull, the overall effect on the market would be increasingly catastrophic.
Analysts suggest that the overall position of Multichain in the market, along with the uncertainty revolving around the team’s internal affairs and plans might set the stage for UST-like rug pull, which continues to impact the broader crypto market to this date.
The entire assumption of Multichain seeking to defraud its customers results from the announcement of the unavailability of some of its cross-chain routes. The protocol did mention that it was working to restore them as soon as possible but did not provide an exact timeline.
However, Multichain promised to reimburse users for all possible losses, with many believing that the promise would not be fulfilled. At the same time, considering how the firm has now landed under the radar, it would become relatively easy to keep track of funds under the control of the firm. The MULTI token, currently, has suffered a decline of an astonishing 21.98%, pushing the trading price down to approximately $3.82. At the same time, the total market cap of the token is currently $55 million.
Fantom Impacted the Most in the Multichain Fiasco
The ongoing situation with Multichain has sent shivers down the spine of the crypto market, and more than $1.8 billion in assets have been frozen. Out of the total value locked, the Fantom blockchain remains the most impacted with almost 36.7%. Currently, the total assets on the Fantom blockchain account for $1.66 billion, with more than 40% being wrapped on Multichain.
Multichain is one of the largest blockchain bridges in the crypto space and facilitates the swapping of tokens on different exchanges. Similarly, Multichain also serves as the official cross-bridge for Fantom. A total of 191 million USDC tokens and 82 million USDT tokens on the Fantom blockchain have been issued by the firm.
Fantom Foundation Director Andre Cronje said,
“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”
Following the uncertainty surrounding Multichain, the Fantom Foundation has withdrawn all funds from its liquidity pools on Sushiswap. As of now, the foundation has pulled out MULTI tokens worth $2.4 million.