After a bullish April, May brought a wave of exploits, rug pulls, and hacks, casting uncertainty over the decentralized finance (DeFi) sector. One of the most prominent developments in the past week was the protocol saga. The cross-chain DeFi protocol’s delayed node upgrade created a domino effect, tanking its token price by 30%.
The Multichain protocol saga impacted multiple DeFi protocols, forcing Binance to suspend deposits for ten bridged tokens on May 25 after days of stuck transactions. Alongside the Multichain issues, the week saw numerous hacks, exploits, and rug pulls. A crypto project allegedly took off with $32 million of customers’ funds, DeFi protocol WDZD Swap was exploited for $1.1 million, and a bug in Aave v2 on Polygon led to the freezing of some assets in the contract. The top 100 DeFi tokens had another bearish week, with most DeFi tokens experiencing reduced trade on the weekly charts.
On May 24, the price of Multichain’s native MULTI token fell by 30% in 24 hours. Several concerning events took place in line with this significant price plummet. Days of stuck transactions prompted Binance to suspend deposits for 10 bridged tokens. Effects were felt across multiple Ethereum, BNB Smart Chain, Fantom, and Avalanche blockchain networks.
The MULTICHAIN protocol faced various issues such as a delayed backend node upgrade and rumors of the multichain team’s arrest by Chinese police, further inciting uncertainty. Despite these setbacks, the DeFi market saw a minor increase this past week. The total market value for DeFi protocols dipped below the $50 billion mark, and the top 100 tokens by market capitalization remained bearish.
The DeFi sector has experienced considerable skepticism, with volatility fueling concerns. However, proponents argue that the technology behind DeFi is sound, and potential issues, such as hacks and exploits, will be resolved as the sector matures. As new developments unravel in the DeFi space, and despite recent setbacks, the community remains hopeful for a brighter future.
Source: Cointelegraph
