Multichain is the ultimate Router for web3. It is an infrastructure developed for arbitrary cross-chain interactions. But The rug-pull event in this protocol created shockwaves in the cryptocurrency market as an astounding amount of $1.8 billion funds locked up in Multichain wallets. Rumors circulate that Chinese authorities have arrested Multichain team members, and law enforcement has seized control of the project wallets. The altcoin project most affected by the Multichain crisis is "Fantom (FTM)".
Introduction
Multichain was born as Anyswap on the 20th July 2020 to service the clear needs of different and diverse blockchains to communicate with each other. Each blockchain has its own unique services that it provides, its own community and its own development ecosystem. For our industry to reach the next level for consumers, we need a fast, secure, inexpensive and reliable way to exchange value, data and exercise control between the chains. The solutions developed by Multichain allow almost all blockchains to inter-operate.
Multichain supports more than 90 chains, including Ethereum, BNB Smart Chain, Arbitrum, Fantom, Harmony and etc. Users can transfer their assets seamlessly across blockchains through its Cross-Chain Bridges and Cross-Chain Routers. Multichain also has a governance token, MULTI, to let holders participate in the project's upcoming governance mechanism.
How does Multichain work?
At a basic level, Multichain uses two methods to bridge tokens. First, it uses smart contracts to lock tokens on one blockchain and mint wrapped tokens on another blockchain. When this isn't possible, it uses a network of liquidity pools across chains to trade bridged tokens. Usually, all this can be done in under 30 minutes without slippage.
Multichain supports Ethereum Virtual Machine (EVM) networks and a selection of blockchain networks using different technology like Cosmos and Terra. Multichain also offers a similar bridging service for NFTs (Non-Fungible Tokens). Projects that want to bridge their tokens can work with Multichain on issuing them to new blockchains. This service is free and can be completed in under a week.To facilitate all this work, Multichain has a network of Secure Multi Party Computation (SMPC) nodes run by various parties. Let's look at all of these a little bit deeper.
Bridging
When transferring across chains, Multichain uses a standard crypto pegging mechanism for some coins and tokens. Imagine you want to bridge BNB from BNB Smart Chain to Ethereum. Multichain will lock your BNB in a smart contract on BNB Smart Chain and then mint a pegged BNB token on Ethereum. This will be done in a 1:1 ratio. This option was the original service offered by Multichain when operating as Anyswap.
Cross-Chain Routers
The Multichain Router takes a user's request and uses the appropriate method from the two outlined above. This feature streamlines the bridging user experience. Any supported assets are transferable between multiple chains, whether they are native tokens or bridged by Multichain. Some projects with native tokens on a few chains, but not others, can bridge using Multichain with a hybrid approach.
What is the MULTI token?
MULTI is Multichain's governance token. Previously, under the name Anyswap, Multichain released the ANY governance token. Users can now convert ANY to MULTI 1:1 via the Multichain website. This mechanism means that MULTI will have a total supply of 100 million if all ANY holders convert their tokens. Multichain also has the veMULTI, which allows token holders to stake MULTI for Multichain bridge fees rewards. Holders can also vote on governance proposals through the veMULTI framework.
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