Research Summary
The article discusses the potential risks associated with the Fantom protocol’s significant exposure to Multichain. The report reveals that 35% of Fantom’s total TVL is locked in Multichain, and 40% of all Fantom assets, excluding its native $FTM token, are issued by Multichain. These assets, primarily wrapped ones, amount to $650M, indicating a significant reliance on the bridge. The situation becomes more concerning when looking at stablecoins, as Multichain issues 81% of the total stablecoin market cap within the Fantom ecosystem, with $USDC leading at $194M out of $458M.
Actionable Insights
- Monitor Multichain’s Stability: Given the recent rumors about the Multichain team’s arrest, it’s crucial to monitor the stability of Multichain as it could potentially impact the entire Fantom ecosystem and its liquidity.
- Consider Diversification: The higher a protocol’s exposure to a specific bridge, the greater the risk to user funds, as the accessibility to those assets could be compromised. Therefore, diversification can be a good strategy when managing such risks.
