Fantom’s TVL hit a two-year low. FTM saw wider distribution as key momentum indicators trended downwards.
Total value of assets locked (TVL) across DeFi protocols housed in Layer 1 blockchain Fantom [FTM] has plummeted 67% in recent weeks due to the failure of the Multichain bridge, data from TheBlock revealed.
The recent failure of the Multichain bridge had a serious impact on the Fantom ecosystem. As a result, TVL in Fantom’s DeFi protocols dropped by 67% in just a few weeks. pic.twitter.com/qYXxdo4mSb
— The Block Pro (@TheBlockPro__) July 21, 2023
Read Fantoms [FTM] Price Forecast 2023-24
On July 7, 2023, the Fantom Multichain bridge was hacked, resulting in the loss of $126 million in cryptocurrency. The attacker exploited a vulnerability in the bridge’s code to withdraw funds from the bridge’s Fantom network.
The hack was discovered by Multichain, who immediately stopped bridge and advised users to withdraw all contract approvals related to Multichain.
The Multichain service is currently stopped and all bridging transactions are stuck in the source chains.
There is no confirmed resume time.
Don’t use the Multichain bridging service now.
— Multichain (formerly Anyswap) (@MultichainOrg) July 7, 2023
Fantom calls for help
Information from DeFi data provider DefiLlama revealed that Fantom’s pre-launch TVL was $201.4 million. As users sought safety by removing their funds from the on-chain protocols, the TVL plummeted and was pegged at $81.84 million at the time of writing.
The last time Fantom’s TVL was this low was in May 2021.
For context, seven of the top 10 leading DeFi protocols on Fantom have experienced double-digit TVL declines over the past month. With a current TVL of $9.55 million, Beefy Finance suffered the biggest drop in TVL, dropping 65% in the past 30 days.
As for network activity on Fantom, data from Artemis revealed an increase in daily active addresses since the hack. It grew 60% as of July 7 and sat at 40,970 active addresses on Fantom as of July 20.
During that period, significant fluctuations in the number of daily transactions indicated that the increase in active addresses may have been caused by previously inactive users rallying behind the protocols in the chain after the hack and trying to withdraw their funds.
FTM gets the brunt, but…
At the time of going to press, Fantom’s native coin FTM was trading at $0.2582, down 15% in value last month, according to data from CoinMarketCap.
Judging the price movement on a D1 chart revealed a significant decrease in accumulation. At the time of writing, the main momentum indicators were trending downwards, suggesting that many traders have started distributing their FTM coins to hedge against further losses.
For example, the Relative Strength Index (RSI) was 41.01. The Money Flow Index (MFI) remained in oversold territory at 27.47. The Chaikin Money Flow (CMF) indicator was below the zero midline, indicating increased liquidity output from the FTM market.
Realistic or not, here is the market cap of FTM in terms of BTC
A CMF reading below zero is a sign of weakness in the market.
Despite the fall in FTM accumulation, funding rates on the exchanges remained positive. This meant that demand for long positions was relatively high compared to short positions as traders placed bets in favor of a price rally.
This post Fantom: After the Multichain Bridge hack, TVL drops to its lowest point in 2 years
was published first on https://ambcrypto.com/fantom-following-multichain-bridge-hack-tvl-falls-to-a-two-year-low/