The cross-chain router protocol, Multichain (MULTI), experienced a significant price drop on May 24, plunging 30% within a 24-hour window to settle at $4.97 per token at the point of reporting.
This drastic decline occurred after user complaints regarding unprocessed multichain fund transfers attributed to an unexpectedly prolonged backend node upgrade.
Rumors and Smart Money Outflows
Simultaneously, a cryptocurrency wallet associated with the layer-1 blockchain developer Fantom Foundation reportedly extracted 449,740 MULTI (equivalent to $2.4 million) from the decentralized exchange SushiSwap’s liquidity. This action and unverified claims circulating on social media exacerbated the market’s response, leading to a steep sell-off. A tweet from a user that has since been seen over 300,000 times suggested:
On the same day, Lookonchain, a blockchain analytics firm, observed $3 million worth of MULTI outflows related to savvy investors or “smart money” accounts.
Multichain’s Evolution and Future Plans
Established in July 2020 in Singapore to facilitate communication between different blockchains, Multichain protocol has exceeded $1.59 billion in total value locked (TVL), peaking at $10.5 billion TVL in early 2022 before the advent of the cryptocurrency bear market.
In December 2021, Multichain secured $60 million in a seed funding round steered by Binance Labs, the investment division of the cryptocurrency exchange giant, Binance. In a recent move this month, Multichain has committed to a $100-million ecosystem fund to boost the development of native multichain initiatives.