Rumours of the arrest of the Multichain team have led to shockwaves across the Fantom ecosystem, with fear, uncertainty and doubt causing a 5x increase in daily bridging volumes, despite trading volumes of $129m. However, while Fantom is considered the most exposed to Multichain’s wrapped tokens, with 35% of its total value locked dependent on these wrappers and 81% of its capitalisation coming from Multichain, and with no communication from the Multichain team for over a week, data shows that the amount withdrawn from Fantom was only 1% of its total TVL of $1.78bn, indicating little panic in the market.
This article originally appeared on www.newsbtc.com
Recently, there have been rumors circulating on social media about the alleged arrest of the Multichain team – the team behind the popular blockchain platform, Fantom. Along with this news, there have also been claims that on-chain data has uncovered a significant exposure of Fantom to wrapped tokens.
Firstly, let’s address the claim about the arrest of the Multichain team. There is no concrete evidence to support this rumor, and at this point, it should be considered as FUD (Fear, Uncertainty, and Doubt) until proven otherwise. It is essential to note that spreading false information, especially about individuals or organizations, can have severe consequences and should be avoided.
Moving on to the second claim, on-chain data uncovering Fantom’s exposure to wrapped tokens. This claim appears to be based on a report released by CipherTrace, a blockchain analytics firm. The report highlights various vulnerabilities in smart contracts, which can potentially be exploited by bad actors to drain funds from a blockchain network. One of the vulnerabilities highlighted in the report is related to Fantom’s ERC-20 token bridge.
An ERC-20 token bridge allows users to move tokens between different blockchain networks, such as Ethereum and Fantom. However, these bridges can also potentially expose a network to security risks, as they rely on trust in a smart contract that is not necessarily audited regularly.
The CipherTrace report suggests that there is a theoretical possibility that an attacker could exploit this vulnerability to mint more wrapped tokens than the underlying collateral, resulting in an inflation of the total token supply and a decrease in the value of tokens on the network.
It is important to note that the report does not provide any evidence that this vulnerability has been exploited in practice, nor does it claim that there has been any loss of funds on the Fantom network due to this issue. It is merely a theoretical concern that the Fantom team could address and mitigate through regular audits and security assessments.
In conclusion, while there may be concerns about possible vulnerabilities in Fantom’s ERC-20 token bridge, claims about the Multichain team being arrested should be treated as FUD until proven otherwise. As with any emerging technology, it is vital to remain vigilant and keep an eye out for potential risks and vulnerabilities while recognizing the value and potential of blockchain technology.
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