Data Interpretation: Due to force majeure, some routes of Multichain have been shut down. Is there a large outflow of funds?

Author: Ignas, Crypto KOL

Compiled by: Felix, PANews

On May 24, according to reports from multiple communities and social media users, there was an abnormal delay in the arrival of Multichain cross-chain funds. Later, Multichain tweeted that although most of the cross-chain routes of the Multichain protocol were operating normally, the Due to force majeure, some cross-link routes are unavailable, and the time for service recovery is unknown. After service is restored, pending transactions will be credited automatically. PANews learned from various sources that Multichain co-founder and CEO Zhao Jun is currently out of contact. Qian Dejun, founder of the Fusion Foundation and former co-founder of Multichain, also said on Twitter that he has not yet contacted Zhao Jun.

For a while, various speculations gradually arose, and it was even rumored that the Multichain team had been arrested. Due to the market sentiment of fear, hesitation and doubt, the single-day transaction volume of the cross-chain bridge increased by 5 times. Some people assert that Multichain has fallen, but whether this is really the case, encryption KOL Ignas disagrees, and starting from the data indicators on the chain, he believes that the suspension of Multichain did not cause a large amount of capital outflow.

Multichain’s transaction volume is $129 million, second only to Stargate. However, when zoomed out, cross-chain bridge transaction volumes do not show clear signs of panic.

An Ape's Prologue, the research department of Thanefield Capital, tweeted that Fantom is the protocol with the largest exposure to Multichain:

One is that 35% of the total lock-up volume (TVL) is locked on Multichain, and a large part of the chain's assets are issued by Multichain.

The second is that Multichain issued 40% of Fantom assets, excluding its native token FTM. These assets (mainly encapsulated assets) totaled $650 million, indicating a heavy reliance on Multichain.

The third is stable currency. In the Fantom ecosystem, the market value of the stable currency issued by Multichain ($458 million) accounts for 81% of the total market value of the Fantom ecological stable currency ($567 million), of which USDC leads the way with $194 million.

From this, it is not difficult to speculate that there should be a large outflow of market funds, but in fact, the withdrawn funds are only 18 million US dollars more than the deposited funds. That's just 1% of its $1.78 billion total TVL, and there's not much to scare here, either.

Due to the reliance on Multichain, Fantom should have experienced a large outflow of TVL. Although TVL fell 9.55% in USD terms, the data showed no significant outflows.

The clearest sign of panic is Multichain LPs on Fantom. In total, LPs withdrew $33 million from Fantom, compared to only $1.7 million in deposits.

Multichain officially stated that "some cross-chain routes cannot be used due to force majeure", and Kava, zkSync and Polygon zkEVM routes are temporarily suspended. There were 83 transactions pending for more than a day.

Maybe the worst is yet to come, but on-chain data doesn't show massive outflows. However, what is worrisome is the lack of communication between the teams.

Finally, borrow Vitalik's views on cross-chain bridges:

"Minimize reliance on cross-chain bridges."

If you are concerned about the security of your assets, it is better to keep your tokens on their native blockchain. The future direction of the event may change soon, PANews reminds users to pay attention to asset safety.

Related reading: What are the reasons behind frequent cross-chain bridge accidents?