Multichain, the cross-chain router protocol, experienced a significant setback as its token price plummeted 30% in 24 hours. The trading price stood at $4.97, raising investor concerns due to a backend upgrade delay. This led to a series of sell-offs, causing market instability.
Despite the turbulence, the Multichain protocol maintained its total value locked (TVL). The TVL remained relatively unchanged at $1.6 billion during this period. Thus, the protocol demonstrated resilience in the face of market challenges.
Users of the Multichain protocol were frustrated as their funds failed to arrive due to an unexpected delay in the backend node upgrade. The prolonged upgrade process affected transactions involving popular routes such as Kava, zkSync, and Polygon zkEVM. This caused the temporary suspension.
The admin of the Multichain Discord channel started to address the concerns. They assured users that the upgrade’s conclusion would ensure the completion of affected transactions. They extended apologies to users for any inconvenience caused by the delay.
Adding to the panic, rumors circulated regarding the Multichain team’s alleged arrest by Chinese authorities. They were rumored to have seized control of $1.5 billion in contract funds. While these rumors lacked substantial evidence, they managed to fuel the sell-off further.
Additionally, a wallet address associated with Fantom Foundation, a layer-1 blockchain developer, withdrew 449,740 MULTI tokens from liquidity on the decentralized exchange SushiSwap. The sell-off seems to have been influenced by rumors as well.
One user noted in a tweet that has been seen over 300,000 times since publication, “It’s rumored that the multichain team has been arrested by Chinese police, with 1.5 billion dollars of contract funds under control.”
It's rumored that the multichain team has been arrested by the Chinese police, with 1.5 billion dollars of contract funds under control, and some team members transferred 494200 multi tokens from the team address to gate today. Please be aware of the risks.$multi #MultiChain pic.twitter.com/KpB9ehl5ls
— 0xfleet (@0xfleet) May 24, 2023
Multichain Protocol’s Remarkable Journey Amidst Market Volatility
The Multichain protocol, founded in July 2020 in Singapore, aimed to address the growing need for inter-blockchain communications. Since its inception, the protocol has reached remarkable milestones, surpassing $1.59 billion in total value locked (TVL).
In early 2022, Multichain achieved a peak TVL of $10.5 billion, demonstrating its potential and market demand. However, the cryptocurrency bear market that followed impacted the protocol’s growth.
Multichain made headlines in December 2021. The company successfully raised $60 million in a seed round led by Binance Labs, the venture capital arm of the popular cryptocurrency exchange Binance.
The protocol allocated $100 million to expedite native multichain projects, demonstrating a strong commitment to ecosystem growth. These initiatives underscore Multichain’s commitment to fostering innovation. Furthermore, the company aims to expand its reach within the blockchain industry.
Multichain is working to overcome the challenges posed by the backend upgrade delay and restore investor confidence. Market observers eagerly await further updates on the protocol’s progress.
With its strong backing and ambitious plans, Multichain remains poised to play a significant role in shaping the future of cross-chain communication. It also aims to revolutionize decentralized finance.