Fantom-based SpiritSwap heads for shutdown after Multichain hack drains treasury Fantom-based SpiritSwap heads for shutdown after Multichain hack drains treasury
The Multichain hack has disrupted Fantom's DeFi ecosystem, with the blockchain network's TVL declining by more than 80%.
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Updated: Aug. 9, 2023 at 12:58 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
SpiritSwap, a Fantom-based decentralized exchange (DEX), is winding down its operation after Multichain’s (MULTI) hack drained its treasury of all funds, according to an Aug. 9 message on its Telegram channel.
On July 14, the Multichain team closed the cross-chain protocol following their inability to reach CEO Zhaojun and effectively maintain its operation. Before then, the protocol was exploited for $126 million, with most funds stolen from its Fantom Bridge.
SpiritSwap said:
“The unfortunate Multichain hack has left our treasury drained, and without the means to finance essential aspects of our operation – from regular development costs to operational salaries, from monthly costs to marketing.”
The DEX intends to seek a fresh team to assume project control. Failing this transition, the protocol will shutter operation by Sept. 1. This strategic move aims to prevent disruption for users who may withdraw their liquidity from the protocol before the impending shutdown.
SpiritSwap is among the top 10 DeFi protocols on Fantom (FTM). At its Jan. 2022 peak, the total value of assets locked (TVL) on the protocol was more than $340 million. However, it has since dropped to $2.92 million, according to DeFillama data.
Fantom DeFi activities decline.
Meanwhile, the Multichain incidence has significantly disrupted Fantom’s DeFi ecosystem, with the blockchain network’s TVL declining by more than 80% to $71.55 million from its May high of $364 million, according to DeFillama data.
Per the data aggregator’s dashboard, most of the top 10 protocols within Fantom’s ecosystem have lost an average of 40% of their values since the Multichain exploit, with some projects shutting operations because of the impact on their operations.
In July, Geist Finance, an Aave fork on Fantom, ceased operations because the Multichain exploit caused it irreversible losses as assets were trading at a 22% discount from their real value.
Besides that, the average DEX volume on the blockchain plummeted to less than $20 million daily, with the network recording around $7.1 million in the last 24 hours, as per DeFillama data.
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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