Fantom price crashes by 12% in a day as Multichain users dump $110 million worth of assets

Fantom price almost fell below $0.2700 during the intra-day trading hours before recovering to trade at $0.2780.
PeckShield highlighted over $110 million worth of USDC, wBTC and wETH exiting the Multichain bridge.
Initial speculation suggested that the price drop was due to dumping, which was later clarified as potential whale transactions moving their assets from Multichain to Stargate.

Aaryamann Shrivastava FXStreet

Fantom price witnessed a rather unexpected turn of events after the network went through a couple of developments. The price plunged after investors assumed a bearish turn of events, which was actually a simple transaction moving assets from one place to another.

Fantom price dips on the back of FUD

Fantom price could be seen trading at $0.2755 at the time of writing after declining by nearly 13% in the span of 24 hours. The altcoin fell below an important support level at $0.2949, which has been tested multiple times in the past.

FTM/USD 1-day chart

The reason behind this decline was the sudden shift of assets from Multichain to Stargate.

Both Multichain and Stargate act as bringing protocols connecting one blockchain to the other to transfer assets, NFTs, etc. Stargate, however, serves as an upgrade to multichain as instead of using an intermediary, chains can use LayerZero to initiate communication and transactions directly with each other without using an intermediary.

Earlier on Thursday, security analytics company PeckShield put out a tweet highlighting a series of transactions worth millions. Per the post, a total of more than $110 million worth of USD Coin (USDC), wrapped Bitcoin (BTC) and wrapped Ethereum (wETH) could be seen moving out of the bridge.

Hi @MultichainOrg you may want to take a look: https://t.co/D4GKGpuBtw pic.twitter.com/3qURqGmes8
— PeckShield Inc. (@peckshield) July 6, 2023

Initially considered to be dumping, upon further investigation, it could be seen that these were potential whale transactions moving assets to Stargate. The bridge became of importance today following the announcement of LayerZero partnering with Fantom to introduce the aforementioned assets on the chain.

In the announcement, LayerZero also stated that initially, USDC, wBTC, wETH, as well as USDT (Tether) would be able to be bridged between Fantom and Ethereum using only the Stargate bridge. Consequently, holders of the assets jumped to bring their holdings to the latter bridge resulting in millions of dollars worth of outflows.

However, a confirmation of the same is yet to be issued by Fantom Foundation, which, in the meantime, addressed the situation with a tweet saying,

We are aware of a situation unfolding on the Multichain bridge. We are actively evaluating the circumstances and will provide an update as soon as we have more to share.
— Fantom Foundation (@FantomFDN) July 6, 2023

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Author

Aaryamann Shrivastava

FXStreet

Aaryamann Shrivastava is a Cryptocurrency journalist and market analyst with over 1,000 articles under his name. Graduated with an Honours in Journalism, he has been part of the crypto industry for more than a year now.

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