On-chain data interpretation of Multichain events: There has not been a large outflow of funds after the service suspension
The Multichain event does not seem to be in a "deadlock."Original Author: Ignas, Crypto KOL
Compiled by: Felix, PANews
On May 24, multiple communities and social media users reported that there were abnormal delays in the arrival of funds across the Multichain cross-chain network. Subsequently, Multichain posted on Twitter stating that while most cross-chain routes of the Multichain protocol were operating normally, some routes were unavailable due to force majeure, and the time for service restoration was unknown. Once services are restored, pending transactions will be automatically credited. PANews learned from multiple sources that Multichain co-founder and CEO Zhao Jun is currently unreachable. Qian Dejun, founder of the Fusion Foundation and former co-founder of Multichain, also stated on Twitter that he has not been able to contact Zhao Jun.
As a result, various speculations arose, with some voices claiming that the Multichain team had been arrested. The market sentiment of fear, hesitation, and doubt led to a fivefold increase in the daily trading volume of cross-chain bridges. Some asserted that Multichain had collapsed, but crypto KOL Ignas disagreed, believing that the suspension of Multichain did not lead to a significant outflow of funds based on on-chain data indicators.
The trading volume of Multichain was $129 million, second only to Stargate. However, when narrowing the scope, the trading volume of cross-chain bridges did not show obvious signs of panic.
Thanefield Capital's research department An Ape's Prologue tweeted that the Fantom ecosystem has the largest risk exposure to Multichain:
35% of the total locked value (TVL) is locked in Multichain, and a large portion of the assets on that chain is issued by Multichain.
Multichain issued 40% of the assets on Fantom, excluding its native token FTM. These assets (mainly wrapped assets) total $650 million, indicating a serious reliance on Multichain.
In terms of stablecoins, the market value of stablecoins issued by Multichain in the Fantom ecosystem ($458 million) accounts for 81% of the total market value of stablecoins in the Fantom ecosystem ($567 million), with USDC leading at $194 million.
It is not difficult to infer that market funds should have flowed out significantly, but in fact, the amount withdrawn was only $18 million more than the amount deposited. This is just 1% of its total TVL of $1.78 billion, indicating not much panic.
Due to reliance on Multichain, Fantom should have experienced a significant outflow of TVL. Although the TVL in USD terms dropped by 9.55%, the data shows no significant outflow of funds.
The most obvious sign of panic is the Multichain LPs on Fantom. LPs withdrew a total of $33 million from Fantom, while deposits were only $1.7 million.
Multichain officially stated that "some cross-chain routes are unavailable due to force majeure," and the Kava, zkSync, and Polygon zkEVM routes have been temporarily suspended. There are 83 transactions pending for more than a day.
Perhaps the worst is yet to come, but on-chain data does not show a significant outflow of funds. However, the lack of communication among the teams is concerning.
Finally, borrowing Vitalik's view on cross-chain bridges:
"Minimize reliance on cross-chain bridges."
If you are concerned about asset security, it is best to keep tokens on their native blockchains.
Risk warning
Risk warning
