The #Fantom Foundation, a leading cross-chain bridging protocol, recently caused a stir within the crypto community by withdrawing millions of dollars in liquidity from a trading pool for the native token of #Multichain. The move has compounded concerns over the stability of the protocol, with many investors and enthusiasts questioning the foundation’s motives.
The withdrawal was made from a liquidity pool on the decentralized exchange #SushiSwap, with nearly 450,000 of MULTI and 1,363 $ETH being removed from the pool. While Fantom Foundation has stated that it is still holding onto its $MULTI, other top holders have reportedly sent Multichain’s governance token to exchanges, including a whale with 494,200 tokens ($2.75 million) and digital asset firm, Hashkey Capital, whose position was worth $221,000 at the time.
The move by the foundation has raised concerns about the stability of the protocol, with investors worried that the withdrawal of liquidity could lead to a drop in the value of the MULTI token. Supporters of the protocol have also voiced their concern, with many questioning the foundation’s actions and motives.
The Fantom Foundation, however, has sought to reassure investors and the wider community that the withdrawal was necessary to maintain the stability of the protocol. In a statement, the foundation stated that “We confirm that the liquidity removal from SushiSwap is part of our internal management activities to optimize the protocol’s performance. We are focusing on increasing transaction throughput and reducing gas fees, as well as providing better user experiences on the platform.”
Despite the statement, many investors and supporters of the protocol remain unconvinced, with some calling for greater transparency and accountability from the foundation. The incident highlights the ongoing challenges facing the crypto industry as it seeks to establish itself as a legitimate and stable investment option. While blockchain technology and decentralized finance offers a range of exciting opportunities, the industry must work hard to build trust and ensure that protocols and platforms are secure, stable, and transparent.