Fantom Ecosystem’s Unease Amid Multichain Crisis: Impact, Solutions, and Prospects

Intricate blockchain bridge, distressed Fantom ecosystem, vibrant though uncertain DeFi scene, moody twilight setting, interconnected pathways symbolizing alliances, ominous shadow of wrapped assets, hopeful artistic brushstrokes implying optimism, subtle discord undertones.

The disarray at bridge-builder Multichain (MULTI) has been causing unease within the Fantom (FTM) ecosystem, despite reassurances from the Fantom Foundation. Decentralized finance (DeFi) protocols are attempting to shield themselves from a possible bridge outage, which could lead to a decrease in value or isolation of wrapped assets, such as USDC, ETH, and numerous others, issued by Multichain.

Several DeFi projects built on the Fantom blockchain have begun transferring crypto to different networks this week, fearing that Multichain’s mounting bridge crisis might jeopardize their tokens’ worth. The Decentralized exchange (DEX) Beethoven X and protocol builder Byte Masons have executed similar transfers, demonstrating the impact of Multichain’s turbulent infrastructure and absent CEO on the Fantom network. Though the moves seem precautionary, uncertainty and skepticism are spreading quickly in the face of Multichain’s crucial role within the Fantom ecosystem.

Almost 40% of cryptocurrencies on the Fantom network (excluding FTM itself) arrived through Multichain’s Fantom bridges, as per quant trading firm Thanefield. If the connection were disrupted, wrapped assets might lose their peg and, in the worst-case scenario, become stranded. Increased concern among community members and project leaders regarding the state of Multichain can be witnessed on nine Discord servers dedicated to Fantom-based DeFi projects.

However, abandoning Fantom entirely is not on the table. Messages indicate that teams taking the most aggressive actions still publicly support the ecosystem, which is a significant hub for DeFi traders. Instead, they look to the Fantom Foundation to forge new alliances that would resolve the existing reliance on Multichain.

One surefire solution to this crisis is the introduction of a native USDC stablecoin to Fantom, eliminating the need for wrapped versions that depend on the issuing bridges. However, this concept has not yet materialized, leaving Multichain’s bridged stablecoins (which account for 80% of stablecoins on Fantom) as the predominant trading pairs within the ecosystem.

Some protocols are already distancing themselves from Multichain-linked assets. The DEX Equalizer (EQUAL) started encouraging traders to use USDC issued by bridge-builder Axelar over Multichain’s stablecoin. Meanwhile, projects like Hector (HEC) and decentralized lending protocol Tarot (TAROT

Source: Coindesk

Sponsored ad