Multichain crisis reappears as over $130 million in token liquidity is withdrawn

Multichain crisis as over $130M in token liquidity withdrawn.

It is unclear whether this is related to Binance’s suspension of deposits and withdrawals of Multichain bridge tokens. Earlier, Binance announced that it would suspend all deposits and withdrawals of ten Multichain bridge tokens, which were bridged to Binance Smart Chain, Ethereum, Avalanche, and Fantom, including Polkastarter (POLS), Alchemy Blockingy (ACH), Beefy.Finance (BIFI), and Harvest Finance (FARM), and Travala (AVA), which is a token minted on the Ethereum bridge. However, users can still withdraw them through other networks supported by the exchange.

The problem with cross-chain bridges is ongoing

Cross-chain bridges are a common target for cryptocurrency hackers, and Multichain Bridge, formerly known as Anyswap, suffered an $8 million hack in 2021. In early 2022, several hackers stole $3 million from Multichain. A white-hat hacker later returned $900,000 of it.

This year, Multichain has experienced several technical glitches, and its potential crisis has raised investors’ concerns.

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• Multiple bridge contracts operated by Multichain have experienced large-scale abnormal outflows of various tokens, with a total value exceeding 130 million US dollars.
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In May, the Multichain project had difficulty processing bridged transfers, causing a large number of transactions to be stuck. Multiple paths of the Multichain cross-chain bridge, including Kava, zkSync, and Polygon zkEVM, were unable to function. The team also confirmed that they were unable to contact CEO Zhaojun, and there were rumors in the community that Zhao was detained in China, and the team did not update any follow-up news.

Ethereum co-founder Vitalik Buterin has warned users not to rely on cross-chain bridges. In a blog post earlier this year, he suggested that people “minimize their reliance on bridges” and that users should “keep assets on their source chains.”

According to data from DeFi Llama, the Multichain Bridge currently manages approximately $1.28 billion in assets minted through its cross-chain platform. This includes $693 million minted on Ethereum, $337 million minted on BSC, and $91 million minted on Fantom.

Blocking Terminal data shows that Multichain’s native token, MULTI, fell 22.15% last month. At the time of writing, the trading price of MULTI is $2.84, with a 24-hour decline of nearly 10%.

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