MultichainPrice

(MULTI)

Multichain, previously Anyswap, was an open-source cross-chain router protocol designed for transferring fungible and non-fungible tokens across various blockchains. It aimed to achieve interoperability through two main methods: a "lock and mint" approach, where assets were locked on one chain and wrapped equivalents minted on another, or by utilizing liquidity pools. The protocol employed a network of Secure Multi-Party Computation (SMPC) nodes, intended to decentralize the transaction signing process. Its native token, MULTI, primarily served governance purposes, enabling holders to participate in protocol decision-making.

Multichain encountered severe problems in mid-2023, following the disappearance and subsequent arrest of its CEO, Zhaojun, by Chinese authorities. This critical event led to the loss of access to essential MPC keys and resulted in unauthorized withdrawals exceeding $125 million from the protocol. Services quickly came to a halt, with many cross-chain bridge transactions becoming stuck indefinitely. The team officially announced that the company had ceased all operations, rendering the protocol non-functional.

The incidents in 2023 sparked debate over whether Multichain's collapse was an external hack or an inside job/rug pull. While administrator keys were indeed compromised, many security experts leaned towards an internal cause. This suspicion arose primarily from the CEO's unexplained disappearance and the team's subsequent inability to establish contact or retrieve crucial MPC keys. The lack of access to these fundamental keys, combined with the CEO's arrest, strongly suggested a scenario beyond a typical external breach.

Beyond its 2023 crisis, Multichain (formerly Anyswap) had a history of security issues. Early on, it experienced an $8 million exploit. In early 2022, a major vulnerability was exposed that put over $1 billion in assets at risk across multiple tokens, resulting in approximately $3 million in actual losses. Users were urgently advised to revoke token permissions to mitigate further risk, but many failed to do so promptly, leading to additional exploits and asset compromises.

Following the cessation of Multichain's operations and significant security incidents, the MULTI token's utility and viability have been severely compromised. Its primary function was governance, allowing holders to participate in decision-making. However, with the protocol no longer operational and no clear path for recovery, the token has lost its intended utility. Its future prospects are highly uncertain due to the complete collapse of the underlying project it represented.

Multichain's downfall starkly illustrated the dangers of centralization, even in projects aiming for decentralization. A single point of failure emerged with its CEO controlling critical Secure Multi-Party Computation (SMPC) keys. His disappearance and arrest meant the core infrastructure was inaccessible, rendering the entire protocol inoperable. This incident underscored how concentrated control over essential keys or governance mechanisms, despite claims of decentralization, can lead to catastrophic project failure, leaving users with frozen assets and no recourse.