The LayerZero cross-chain bridge protocol, Stargate, has reacted promptly to the recent force majeure incident affecting Multichain and concerns surrounding the stability of anyUSDC, Fantom’s primary USDC asset. To address the potential dangers and protect the ecosystem, Stargate has proposed a comprehensive proposal and initiated a single-choice voting system for risk mitigation and ecosystem integrity. The voting period began on May 27, 2023, and concluded on May 30, 2023.
As part of the proposal, the initial step involves halting STG emissions on the Fantom pools. Suspending emissions is intended to temporarily curb possible disruptions arising from uncertainties associated with Multichain. So far, about 1.7 million verified members of the Stargate community voted in favor of the proposal, equating to 96.55% of the community.
To ensure prevention of possible contamination or adverse effects on the broader Stargate ecosystem, Stargate plans to isolate the Fantom pools from all other pools in the network. Currently, the deposited liquidity provider (LP) in this pool is approximately $11.4 million, which has been effectively segregated from other pools within the Stargate network.
The proposal recommends the removal and unwinding of anyUSDC POL via Multichain to address potential concerns related to anyUSDC on Fantom. Furthermore, Stargate proposes considering alternative bridging options for Fantom users, such as potentially using Hydra.
Binance announced a temporary suspension of deposits for bridged tokens associated with Multichain on May 25. In conjunction with technical measures, Stargate underscores the importance of facilitating a smooth transition for liquidity providers. Whitelisting current LPs is highlighted as crucial, allowing them to redeem their LP on alternative chains.
Taking a skeptical view, one might question whether the proposal’s benefits outweigh the disruption and inconvenience caused by ceasing STG emissions and isolating pools. However, the overwhelming community support for the proposal demonstrates that the majority believe these actions are essential for the ecosystem’s long-term health and integrity.