Rumors of the Multichain team’s arrest have caused a stir in the Fantom ecosystem. Despite $129 million in trading volumes, fear, uncertainty, and doubt (FUD) have resulted in a 5x increase in daily bridging volumes. However, on-chain data analysis shows that bridging volumes do not exhibit significant signs of panic.
Fantom (FTM), according to crypto researcher DeFi Ignas on Twitter, is the most exposed to Multichain’s wrapped tokens. Therefore, Fantom is vulnerable to any potential negative impact that may come about as a result of Multichain’s rumored arrest. The fact that 35% of total value locked (TVL) for Fantom is dependent on these wrappers suggests this. Furthermore, Multichain issues 40% of non-FTM assets, a substantial $650 million sum. This implies that if anything unfortunate were to happen to Multichain, there could be a considerable impact on the overall value of these assets.
Multichain also handles 81% of Fantom’s total stablecoin market capitalization. Stablecoins are digital assets that mirror the value of a real-world asset, such as the US dollar. They serve as a way to hedge against market volatility. However, if anything were to happen to Multichain, the value of these stablecoins can suffer a significant impact, thereby causing instability in the Fantom ecosystem.
Despite this bleak outlook, there is evidence of relative calm among Fantom investors amid the speculation surrounding Multichain’s arrest. DeFi Ignas believes that there should have been a more significant outflow of Total Value Locked from Fantom due to its reliance on Multichain. However, data reveals that only 1% of its total TVL of $1.78 billion was withdrawn, indicating little market panic. Moreover, while TVL has decreased by 9.55% in USD, adjusting for the price of FTM does not show any significant outflow of capital.
The Multichain team’s lack of communication is also cause for concern. Reports indicate that Multichain CEO, Zhaojun, has not been online for a week, leaving many investors and traders feeling uncertain about the project’s future. Furthermore, Multichain has reported that some cross-chain routes are currently unavailable due to unforeseeable circumstances, and Kava, zkSync, and Polygon zkEVM routes were temporarily suspended. Additionally, 83 transactions have been pending for more than a day, raising further concerns among traders and investors.
It is worth noting that the article cites Unsplash and TradingView.com as its sources. In summary, despite the uncertainty surrounding Multichain’s arrest rumors and the risks faced by Fantom, current evidence indicates that the panic in the market is not widespread. However, the lack of communication from the Multichain team has caused apprehension in the crypto market, and traders and investors alike wait on the sidelines, observing the ongoing developments.