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The Fantom network, once viewed as a strong contender in the realm of smart contracts, is currently grappling with unforeseen challenges. Co-founder Andre Cronje provides an unvarnished account of the issues that have recently plagued the platform, as its total value locked (TVL) has experienced a significant decline.
According to reliable source DefiLlama, the numbers reveal an alarming drop, with Fantom's TVL plummeting from a peak of $7.5 billion in 2022 to a mere $70 million as of July 14. The value of the platform's native digital coin, Fantom (FTM), mirrored this trend, sliding from $0.42 to $0.27.
Cronje attributes a key factor in these troubling statistics to the recent calamity involving Multichain. In a candid discussion on the Fantom forum, Cronje acknowledges that Multichain's predicament has been a "severe setback." He shares his previous confidence in the Multichain team, which had assured him of their operational integrity, including server decentralization and access management.
However, Multichain encountered a major setback when their CEO, the sole custodian of server controls, was apprehended in May. This unforeseen event was swiftly followed by Multichain's announcement of closure on July 14. Prior to this, the protocol had fallen victim to a significant exploit on July 6, resulting in the exfiltration of $125 million in digital assets, impacting numerous platforms, including Fantom.
Furthermore, the repercussions of this exploit extended to Geist Finance, a lending protocol, which permanently shut down after incurring substantial losses. This further compounded the challenges faced by the already struggling Fantom network, causing a significant impact on its TVL.
In an effort to recover, Cronje reveals that Fantom is currently in discussions with stablecoin issuers Circle and Tether, who have frozen over $65 million in assets linked to the attack. The focus now lies on finding a solution to the current predicament and restoring the lost assets, as the Fantom network works towards regaining stability.
