With Multichain’s 52% drop in past week, will we see another LUNA-UST-like implosion?
MULTI, the native digital currency of the Multichain cross-chain protocol, is seeing the most dominant negative price actions today after plunging as much as 23% over the past 24 hours. With the price slump, the cryptocurrency is trading at a price of $3.88, but with significant Fear, Uncertainty and Doubt (FUD) in the community.
The Multichain protocol revealed earlier this week that some of its chain transactions were inoperable due to a force majeure event. This event marked the beginning of the woes for the protocol with different theses about a likely rugpull imminent.
One self-proclaimed on-chain sleuth on Twitter TruthLabs highlighted how Multichain has accumulated a total of $1.8 billion spread across different chains other than Fantom. The sleuth shared his permutations that he suspects a potential rugpull from Multichain, and should that happen, it may be the biggest market crisis since the Terraform Labs collapse of last year.
Multichain has $1.8 Billion in locked assets under control, across several chains, not just Fantom. It will impact prices on all assets, across all chains if they did indeed rug, which I suspect is the case. pic.twitter.com/rqZPqvWlRC
— TruthLabs 💄 (@BoringSleuth) May 25, 2023
The community is notably pricing in the FUD, despite the fact that Multichain said it planned to reimburse its users who were affected by the force majeure. MULTI token is down by more than 52% in the trailing seven-day period.
Source of crypto winter trigger?
The challenges surrounding the Multichain protocol were compounded when the key founders of the platform went missing. As a result, crypto exchanges, including Binance, paused deposits of assets into the protocol until additional clarity was provided by the team.
Many entities are now taking precautions with Multichain in order not to get caught up in a bankruptcy event that can first render the MULTI token useless and then predispose users to innumerable losses.
The industry has passed through its toughest of times since the FTX implosion, and stakeholders are doing all they can to ward off a potential event that can lengthen the crypto winter.