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Multichain Hack: Fantom Foundation Reveals Next Steps

Wed, 07/12/2023 - 16:10
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Godfrey Benjamin
Fantom looks to diversify its bridge providers in wake of Multichain woes
Multichain Hack: Fantom Foundation Reveals Next Steps
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The ongoing disruption of the Multichain protocol through hacks and forces majeure is pushing the Fantom Foundation to explore alternative chains to power its operations. Taking to its official Twitter handle, Fantom Foundation said it acknowledges the difficult position that the current hack on Multichain has put Liquidity Providers (LPs), token holders and general users of the protocol in.

Fantom Foundation said it still awaits Multichain's official statement and guidance on its next steps. Recall that the latest hack uncovered by Arkham Intelligence saw about $125 million worth of different tokens stolen from the Multichain Bridge. The firm promptly halted activities to limit the carnage of this exploit.

Fantom Hints at probable solution

Fantom Foundation acknowledged that Multichain has a larger share as the dominant bridge that serves users within its ecosystem. This situation is becoming unbearable, and the protocol has affirmed it will be seeking alternative solutions.

Per the announcement, the Fantom Foundation said it will be bootstrapping both Axelar Network and LayerZero Labs to help create more sustainable bridges to serve the Fantom community.

"In light of the current events, the Fantom Foundation is taking a hands-on approach toward reducing the network's reliance on any one particular solution for bridging and liquidity," the announcement reads, adding that "the Foundation will look to seed both Axelar and LayerZero issued asset pools directly with the bridges themselves to encourage protocol liquidity and confidence."

While more details on the modalities and the timelines remain unknown, users still need a speedy revival of the Multichain protocol to continue operating as usual.

Scam Alert: Multichain Hack Victims Targeted by Fantom (FTM) Impersonators

Fantom's outlook

Ideally, the challenges being faced by the Multichain protocol will have a downside impact on Fantom based on their interconnectedness. The hack is presumed to have generally reduced the demand for FTM, as showcased by the 25% slump in the token’s trading volume over the past 24 hours.

Nonetheless, FTM has maintained resilience, with 1.28% growth to $0.2767, a trend that was stirred by the general market outlook.

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About the author

Godfrey Benjamin is an experienced crypto journalist whose main goal is to educate everyone around him about the prospects of Web 3.0. His love for crypto was birthed when, as a former banker, he discovered the obvious advantages of decentralized money over traditional payments. With his vast experience covering various aspects of Web3, Godfrey's articles has been featured on, Cryptonews and Coingape, among others.