This is the second part of the article. You can read the first part here.

Let’s continue explaining with Fantom’s TVL had such an important turnover.

Reaction from Fantom

Andre Cronje, the co-founder of Fantom, said Multichain’s recent debacle was a “big blow” to the smart contract platform. He lamented that assurances of decentralization, geolocation distribution, and access given by the Multichain team proved false.

Cronje also pointed out that Fantom Foundation is coordinating with relevant parties to retrieve the lost assets. Fantom confirmed contacting stablecoin issuers such as Circle, Tether, and TUSD and said it can confirm a total of $62 million (>$60m USDC and >$2m USDT) has been locked.

Another attempt by Fantom to gain new liquidity on the chain is a marketing campaign with Stargate. You can get an NFT after bridging $100+ on the Fantom chain.

Fantom also said it will make further announcements about various activities on the Opera Chain to help the community and builders going forward.
Ripple’s Effect on Fantom

Assets, such as Bitcoin, USDC, Ethereum, and various stablecoins bridged via Multichain on Fantom, have drastically depegged from their true values.

Fantom’s decentralized exchanges have also experienced a sharp decline in trading volume.

Data from DeFiLlama indicates that the network’s average weekly volume throughout June was less than $100 million.

Although there has been a slight increase in the first half of this month to over $200 million, this figure falls significantly short of its February 2022 peak of $5.2 billion

Geist Finance

Multichain’s issues also affected the lending protocol Geist Finance (a fork of Aave on Fantom), which was forced to shut down permanently due to losses from the exploit.

Prior to the hack, over $29 million worth of crypto assets were locked in contracts running on the Fantom network.

Geist closing had a massive impact on Fantom’s TVL.

Hector Network

On July 17, Hector Network, the Fantom blockchain–based fork of Olympus DAO, voted to liquidate its $16 million treasury and distribute the proceeds to HEC token holders.

Since July 6, Hector’s HEC token has lost 60% of its value; its TOR stablecoin is trading at 13 cents. The treasury may have suffered an $8 million loss due to Multichain-linked stablecoins losing their pegs.


Axelar, LayerZero, and Stargate launched on Fantom just the day before the hack happened and was the last way to get money out of Fantom.

Many DEXes and LP farming projects on the Fantom chain now actively integrate with LayerZero/Axelar to get part of the new liquidity in the form of commissions and total value-locked increases.

SpookySwap supports Axelar bridge and farms for both axl-wrapped and lz-wrapped tokens. BeethovenX has added pools to lz-wrapped tokens. WigoSwap has added a pool to axlUSDC.


The multichain team doesn’t even have access to their website admin panel. They are asking the domain provider to shut down the website (the irony!).

Previously known as Anyswap, Multichain was first hacked in 2021 when attackers siphoned $8 million worth of stablecoins out of the protocol.

Projects are adopting, but that’s liquidity on the bones of previous Fantom users, who lost their money on the depeg of stablecoins. Everyone who had stables on the Fantom chain became exit liquidity and would become intro liquidity for new cross-chain protocols.

To this day, we don’t actually know why Zhao Jun was arrested, what he had been charged with, or any details regarding his case. Under Chinese law, funds seized as part of a criminal investigation may be considered proceeds of crime, opening a pathway to possible seizure by the state.

Most likely, the affected users may not receive any form of a refund, as the Fantom Foundation has demonstrated its focus on supporting and incentivizing new liquidity for the chain rather than compensating old users who experienced losses.

Future of Fantom

Fantom and Multichain’s connection has had a negative impact on Fantom. So, Fantom relies on wrapped stablecoin issued by Multichain instead of having its own stablecoin. Approximately 80% of Fantom’s Wrapped stablecoins were locked in Multichain’s bridge.

The arrest of Multichain’s creator resulted in DeFi enterprises migrating from Multichain and withdrawing funds. The revelation of Fantom’s significant funds trapped on Multichain led to selling pressure on the FTM token and a decline in its price.

Fantom’s total value locked (TVL) has significantly dropped, indicating substantial fund withdrawals from FTM. Decreased network engagement has eroded people’s confidence in Fantom. Many projects initially built on Fantom have moved to other platforms.

The performance of all Fantom-related DeFi projects has been poor. Fantom’s recovery depends on resolving the FUD. FTM token’s performance is hindered until a long-term solution is found.

The current scenario poses a risk of potential failure for Fantom, but there is a slim possibility of survival. Fantom is no longer connected to Multichain and now uses other bridges like Layer Zero bridge. Fantom’s intention to introduce EVM is a promising sign, but the release date remains uncertain.

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