Fantom Foundation Addresses Multi-Million Dollar Exploit, Offers Solutions

The Fantom Foundation has reached out to its community in response to the recent multi-million dollar exploit on Multichain. The foundation acknowledges the challenges faced by its network users, token holders, and liquidity providers (LPs) in light of this incident.

As such, they have taken steps to reduce the blockchain's reliance on any single protocol for cross-chain services and liquidity.

Eggs in One Basket

This response comes amidst the uncertainty that has surrounded the Layer-1 project following the unauthorized movement of over $100 million worth of crypto assets from Multichain's Fantom bridge. The blockchain had the highest exposure to the initial $126 million exploit, which also impacted the Dogechain and Moonriver bridges.

According to a report by trading firm Thanefield, the Fantom blockchain heavily relies on the Multichain cross-chain protocol, with nearly 40% of crypto assets on Fantom being transferred through Multichain's bridges (excluding its native FTM tokens).

While the Foundation acknowledges the impact of Multichain on the total value locked (TVL) and volume of its network, it clarifies that there are no "canonical" bridges on Fantom, indicating the absence of an official bridge or platform for asset transfers between blockchains. They emphasise that builders have always had the freedom to choose any protocol that suits their needs and projects.

Hedging

During the community address, the foundation revealed that developers on its network are increasingly gravitating towards alternative bridging protocols such as Axelar and LayerZero. This suggests that the Foundation is looking to expand and reduce its risk exposure through a potential expansion into other bridge solutions.

Additionally, the Fantom Foundation intends to leverage asset pools and bridges issued by Axelar and LayerZero to promote liquidity. This strategic move aims to instill confidence in the protocols while supporting the development of new assets on the network.