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Multichain Review 2024: It Is a SAFE Cross-Chain Bridge?
Swen Keller
- URL: https://multichain.xyz/
- Year Founded: 2020 (rebranded as Multichain in 2021)
- Native Token: Yes (Multichain Token)
- Supported Assets: 1100+
- Supported Networks: Ethereum mainnet, Arbitrium mainnet, Avalanche mainnet, BNB Chain mainnet, Polygon mainnet, Fantom mainnet, Moonbeam mainnet, Bota mainnet, Harmony Mainnet, Optimism mainnet, Aurora mainnet, Moonriver mainnet, Cronos mainnet, OKC mainnet, Gnosis mainnet, Heco mainnet, Celo mainnet, KCC mainnet, Bitcoin mainnet, Solana mainnet and much more
- Fees: $0.9 to $1.9 per transaction
Multichain Review: Our Take
Multichain Bridge solution enables users to take advantage of the perks of all supported blockchains without giving up on one to use another.
The cross-chain bridge stands out for its large selection of crypto assets (over 1,000), which is quite rare with bridging solutions.
That said, cross-chain bridges like Multichain have struggled to guarantee security, which has proven to be the major problem of the solution.
What is Multichain Bridge and How Does it Work?
Multichain is an infrastructure built by blockchain developers in the Multichain team for arbitrary cross-chain interactions.
The solutions built by Multichain enable almost all blockchain networks to interoperate.
Concerning its working, our detailed research and testing of the Multichain Bridge indicate that an asset is locked up in an MPC smart contract on the origin chain and then a corresponding wrapped asset is minted on the destination chain.
The process is reversed for redemption, which involves the wrapped asset getting burned and the asset in the smart contract being released to the blockchain it originally was sent from.
However, with the launch of the Multichain router V3 beta mainnet in 2021, crypto assets can be transferred between 2 or more blockchains.
Multichain is also able to work with pre-existing crypto assets on blockchains by utilizing liquidity for such assets.
Pros
- Large selection of crypto assets
- A large selection of networks supported
- Average trading fees
Cons
- Poor security history
Unique Features
VeMulti
VeMulti stands for vote escrow MULTI and it is the governing scheme for the MultiDAO.
Multi-users can lock up their Multi token and gain vote powers on the Multichain protocol.
Users who stake MULTI are rewarded with veMULTI NFT which gives the holder the power to initiate and vote for governance proposals.
VeMulti is supported on the Ethereum blockchain, BNB Chain, and Fantom Chain.
Cryptocurrencies Available on Multichain
Multichain supports over 1,100 tokens across 25 different blockchains.
Supported cryptocurrencies include Aptos, USDC, Avalanche, BNB, Polygon Fantom, Cronos, Arbitrum, Ethereum Classic, OkC, Solana, Optimism, Gnosis, Celo, Fusion, Telos, Aave, AceToken, Baby Dogecoin, Balancer, Tether, Dai, Ethereum, etc.
Networks Available on Multichain
Our practical experience with this bridge has shown us that The Multichain cross-chain router protocol supports cross-chain transfers between all EVM networks.
Supported networks include Ethereum, Litecoin, BSC, Fantom, Arbitrum, Polygon, Avax, Moonbeam, and Non-EVM networks: Bitcoin, Polkadot, Cosmos, Terra, and Solana.
Multichain Bridge Fees
Multichain users are charged the following fees. Users are charged different fees depending on the type of token being transferred:
Altcoins Bridge Cost
- Multichain charges users a cross-chain fee of 0.1%
- The minimum Multichain cross-chain fee is equal to tokens valued at $5 (to ETH is around $80) and the maximum cross-chain fee is equal to coins worth $1,000
- The minimum cross-chain amount is equal to coins valued at $10 (to ETH is $90) and the maximum cross-chain amount is equal to tokens valued at $5M
Mainstream Tokens(including stablecoins) Bridge Fee
- The multichain mainstream cross-chain fee to non-ETH chains is $0.9-$1.9 per transaction.
- Cross-chain fee charged by Multichain to ETH is 0.1%; the minimum fee is $40; and the maximum fee is $1,000.
- The minimum cross-chain amount is equal to tokens valued at $12 (to ETH is $50);
Is Multichain Safe?
Multichain has several measures in place to ensure the security of its system but has a troubled security history.
Multichain is a non-custodial bridge, which means it does not keep custody of users’ assets.
It also guarantees the security of crypto assets using the MPC model.
It has been audited by 3 external auditors: PeckShield, SlowMist, and TrailOfBits. The security reports from the audit are publicly published for everyone to see.
That said, the cross-chain solution uses a threshold-distributed signature algorithm based on the secure multi-party computation.
With the algorithm a set of private keys that are generated independently run nodes with a corresponding public key being produced using distributed computation.
Since no complete private keys are shown during the process it is impossible to access or reveal the keys which means the funds or assets remain safe.
Multichain runs a bug bounty scheme that incentivizes valid bug reporting from communities. The bug bounty enables the security team to easily tackle any problem in the system before it is exploited by a malicious party.
From our team’s trials with this bridge, we have learned that on 7th July 2023, the Multichain Bridge was hacked with a loss of $126m. Fantom Foundation was affected by this hack as its total value locked was affected and Fantom (FTM) trading volume went down 20% within 24 hours. The value of the FTM token was also affected.
Before the hack, Multichain CEO Zhaojun was arrested by the Chinese government from his home in China on 21 May 2023. CEO Zhaojun has remained unreachable to the Multichain global team since then.
Upon his arrest, the team stated that their operational access keys to the MPC node servers had been revoked which made it impossible for the developers to log in and facilitate Multichain’s cross-chain operations. Hence the crypto bridge ceased operations due to a lack of operational funds.
This resulted in abnormal delays in cross-chain funds arriving on Multichain and the suspension of liquidity provision to the bridge by some networks.
By June 4 the family of the CEO was able to access the cloud server platform hosting Multichain’s infrastructure using the saved login credentials on his personal computer but restricted access was granted to Multichain developers.
On June 6, assets worth about $125 million in total value bridged across multiple chains were anonymously moved into the hacker’s wallet address from the Multichain cross-chain protocol.
On June 7, 2023, Multichain announced on its official X (formerly Twitter) channel that its services had been halted and users were asked to avoid using its bridging services.
By July 9, 2023, Zhaojun’s sister transferred the remaining users’ assets in the router pool to 2 Ethereum wallet addresses she controlled.
On the 13th of the same month, the sister of the CEO was detained by the Police. This has left the status of the preserved assets in her wallet address unknown.
Since the incident, Multichain bridging services have been on hold but recently resumed confirming transactions. It is still not certain if Multichain will recover from the incident.
Multichain Staking Rewards
Multichain users can stake MULTI, the native token of the protocol, to receive veMULTI NFT in rewards.
veMULTI is a locked state of MULTI in the form of a tradable NFT that allows holders to participate in Multichain governance and receive Multichain bridge fees.
Multichain distributes 45% of the quarterly bridge fees as rewards.
Rewards are calculated based on the number of multi that you’re holding.
Multichain Native Token (MULTI)
MULTI is the native token of the Multichain Bridge and its utility is the governance of the Multichain Bridge ecosystem.
Multi token is an ERC-20 token issued on the Ethereum blockchain and secured through the Proof of Stake consensus mechanism.
The total supply of MULTI tokens is 100 million. At the time of writing, about 15% of the total supply of the token (14,541,094) is in circulation. And the market capitalization of Multichain (MULTI) is $41,136,135.
MULTI token is traded on centralized exchanges like Binance, Kraken, Huobi, Coinbase, etc. It is also traded on decentralized exchanges like Spooky Swap, PancakeSwap, and Uniswap.
Things We Do Not Like about Multichain Bridge
Through our extensive hands-on analysis, we found that the primary problem with the Multichain Bridge solution is its poor security. In 2023, for example, Multichain Bridges were exploited for almost $130M across Fantom, Moonriver, and Dogechain.
The Multichain team stated that they were looking into it but not much happened to recover the funds.
Final Thoughts
Multichain offers a solution for cross-chain transaction constraints. However, it isn’t there yet in security and requires a lot of effort to reach a secure state.
Multichain is feature-rich, but there’s more out there. Our Synapse Protocol Review gives you another perspective.
FAQ
Most frequent questions and answers
Yes, Multichain still works again after the solution was shut down due to the hack. There is news that the platform developers are also working on a new project. This new project has however not been well received by users in the crypto community.
Multichain cross-bridges were hacked and nearly $130 million was stolen.
Cross-chain is the ability to transfer assets between blockchain networks but multichain is the use of several blockchains within an ecosystem.
Bitcoin is a blockchain network and cryptocurrency while Multichain is a cross-chain bridge solution that allows users to interact with multiple previously incompatible blockchains via transfers.
We always try to provide the most accurate information available, and make sure our team follow through.
If you want to know more about our Crypto Exchanges Review Methodology follow the link below
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