Layer by Layer: Fantom Ecosystem Rocked by Multichain Bridge Issues

The Fantom ecosystem has been thrust into a major existential crisis with the recent deterioration of the Multichain bridge, which long served as the primary channel through which users moved capital into and out of the ecosystem. Fantom’s outsized vulnerability to the issues at Multichain partially stems from the fact that fiat-backed, native stablecoins minted by issuers such as Circle and Tether do not exist on the Layer 1 (L1) network, as noted last month by Fantom Foundation director and core contributor, Andre Cronje. Consequently, nearly all of the stablecoins in the Fantom ecosystem, as well as other major assets like ETH and WBTC, have been backed solely by the Multichain protocol for the past several years.  

Let’s dive right in with a brief history of Multichain and its recent struggles, followed by an analysis of the broader Fantom ecosystem and its long-term outlook.