FUD Or Truth? Multichain Group Arrested, On-Chain Information Uncovers Fantom Publicity To Wrapped Tokens

Rumors of the arrest of the Multichain workforce 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

In accordance with a Twitter thread by the crypto researcher DeFi Ignas, Fantom (FTM) is probably the most uncovered to Multichain’s wrapped tokens. This means that Fantom is especially weak to any adverse impression which will end result from the rumored arrest of the Multichain workforce. It’s because Fantom has important 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. Because of this if something have been to occur to Multichain, it might 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 usually used as a method to hedge towards market volatility. Nonetheless, If something have been to occur to Multichain, it might have a major impression on the worth of those stablecoins and trigger instability within the Fantom ecosystem.

Fantom Buyers Keep Calm Amid Multichain Arrest Rumors

In accordance with Ignas, there ought to have been a major outflow of Complete Worth Locked from Fantom resulting from its reliance on Multichain. Nonetheless, the info reveals that the quantity withdrawn was only one% of its whole TVL of $1.78 billion, which signifies that there’s not a lot panic available in the market.

Moreover, whereas the TVL has dropped by 9.55% in USD, adjusting for the value of FTM reveals no important 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and solely signal of panic is the Multichain Liquidity Suppliers (LPs) on Fantom, with a complete of $33 million being withdrawn by LPs from Fantom, and solely $1.7 million in deposits.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 workforce. 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 among the cross-chain routes are unavailable resulting from drive majeure and that Kava, zkSync, and Polygon zkEVM routes have been briefly 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