21 April, 2024

Crypto Analyst Ponders Over Fantom’s Fate Post-Multichain Hack

22 Jul, 2023

21 Nov, 2023

  • Multichain`s hack has caused significant disruptions in the Fantom ecosystem.
  • Analysts questioned the fate of Fantom Foundation and its native token, FTM.
  • The Multichain hack reportedly prompted Binance to suspend deposits and withdrawals.

Crypto analyst Miles Deutscher has recently expressed concern over the future of the Fantom blockchain ($FTM) following a severe devaluation of its assets in the wake of the recent Multichain hack. The outflow of funds, reaching up to $125 million, from the cross-chain router protocol Multichain played a crucial role in this debacle, leading to an unforeseen depreciation in crypto assets value, primarily on the Fantom blockchain.

The recent disturbances within Multichain have significantly affected the Fantom network, disrupting the regular trading values. This, in turn, has crafted an optimal atmosphere for arbitrage trading, an opportunity for traders to profit from price discrepancies of the same asset in different markets. 

One stark example of this is the USD Coin (USDC), a cryptocurrency tethered to the value of the US dollar. In the aftermath of the Multichain complications, the value of USDC on Fantom reportedly took a significant hit, dropping to as low as $0.50 — a considerable divergence from its usual dollar-pegged price.

According to Wu Blockchain, a news outlet on Twitter, an unidentified trader took advantage of this discrepancy, buying USDC at a 50% discount using Fantom’s native tokens, pumping the price back up to $0.90. Binance CEO Changpeng Zhao (CZ) has sought to reassure users, stating their funds are safe despite the disturbances.

However, this incident has prompted Binance, a leading cryptocurrency exchange, to suspend deposits and withdrawals for several tokens bridged by Multichain as of July 7, 2023. This list includes tokens such as Polkastarter, Alchemy Pay, SuperVerse, Harvest Finance, Beefy Finance, Alpaca Finance, Travala.com, and Spell Token, all of which are bridged on various networks, including BNB Smart Chain, Fantom, Ethereum, and Avalanche.

The hack has brought the Fantom blockchain to a precarious juncture, leading Deutscher to question if it’s another “dead chain.” Nevertheless, only time would tell if Fantom can recover from the current crisis and regain the trust of its users.


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