Stargate DAO voting to reduce exposure to Multichain-issued stablecoin
Quick Take
- Stargate DAO is moving to reduce exposure to a stablecoin created using the Multichain protocol.
- The Multichain protocol still has technical issues, caused by “force majeure” — amid a heavy silence by the project’s leadership team.
The Stargate DAO is voting on a proposal to lower its exposure to a stablecoin created by the Multichain protocol — in light of its ongoing situation — and to isolate pools containing the asset from its other pools.
The Stargate DAO is the governance system for the Stargate bridge, a means of transferring assets from one blockchain to another using the LayerZero protocol. The bridge operates through pools of funds stored on each chain.
The Stargate bridge connects the Fantom blockchain to seven other blockchains. On each of these chains are pools of funds containing the anyUSDC stablecoin, which was issued by Multichain and is a commonly used stablecoin on Fantom. The proposal seeks to disconnect the Fantom pools from Stargate's other pools and lower exposure to the stablecoin.
Currently, the proposal has 1.1 million vested stargate tokens in favor, with just 16,000 votes against. It is still yet to reach the 2 million quorum necessary for it to be carried out.
Silence from Multichain
The reasoning behind the proposal is to reduce exposure to any tokens connected with Multichain, another cross-chain protocol. Multichain has had ongoing issues for a week, with delayed transactions and three cross-chain routes still offline. The team initially said this was due to an upgrade that was getting fixed, but the explanation was changed on May 24 to an ambiguous "force majeure."
On Twitter, unverified rumors have surfaced that the team was arrested in China. In a group Telegram message with the Multichain team, Multichain's VP of Strategic Partnerships, who goes by Mog, replied that he didn't know whether the leadership team had been detained by Chinese authorities.
While the Fantom blockchain has a lot of exposure to Multichain, as many tokens on its network were issued through the protocol, Fantom Foundation Director Andre Cronje said he was not particularly concerned about this type of exposure. That said, the foundation removed liquidity — in the form of Multichain's native MULTI token — it had been providing on the decentralized exchange SushiSwap due to the uncertainty.
Other crypto entities have also taken action to reduce exposure to Multichain, including Binance, Conflux, HashKey Group and Tron founder Justin Sun.
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