The End of Multichain (Formerly Anyswap). So, What's Next? | 2024 Edition

So, the promise of a universal multichain solution by Multichain has ended. What's next to come for the future of universal smart contracts?

The End of Multichain (Formerly Anyswap). So, What's Next? | 2024 Edition

Multichain (formerly Anyswap) is an open-source blockchain infrastructure that enables users to easily connect and exchange assets across different blockchains.

It began as Anyswap in July 2020 and was rebranded to Multichain in October 2021. Unfortunately, its operations were disrupted on May 21, 2023, following the arrest of Multichain CEO Zhaojun. The situation worsened after his sister's arrest on July 13, 2023, ultimately leading to the cessation of the project.

However, the story did not end there.

In late 2023, the Multichain đť•Ź(formerly Twitter) account tweeted that former engineers had taken over and launched Value Router. As of 2024, it appears that the developers have most likely abandoned the project and have remained silent since then.

Key takeaway:

  • Learn about the timeline of the rise and fall of the Multichain project.
  • Get more details about the financiers of Multichain and also the amount lost due to Multichain's exploits.
  • Learn about the Creditcoin approach in filling the demand gap for multichain solutions through Creditcoin 3.0—currently operating as Creditcoin 2.0+.

The initial goal of Multichain is to make cross-chain DeFi and NFT trading seamless and cost-efficient, a.k.a. the ultimate router for Web3.

Multichain banner

The Multichain project enables inter-blockchain communication (IBC), faster transaction speeds, lower gas fees compared to bridging, and support for building bridges between chains.

Not only that, but at its peak, Multichain supported over ten major blockchains, including Ethereum, BNB Chain, Polygon, Avalanche, Fantom, and Arbitrum. It has over $7 billion in total value locked across its ecosystem.

Is the Arrest the Worst Thing that Happened to Multichain?

Image by: DL News (Arrest of CEO Zhao Jun)

No, there's more.

Before re-branding to Multichain, Anyswap was hacked for $8M almost two years ago.

Then, in early 2022, six multi-token contracts were found to be vulnerable to an approvals-draining attack, estimated to have led to $3M in user losses.

Then, $125M was drained again in the post-arrest of CEO Zhao Jun.

Multichain's exploits are considered one of the hardest exploits to trace and explain.

Timeline of the Multichain(Formerly Anyswap) Project

metamask warning for multichain users
If you are a Metamask user, you will be greeted with this warning each time you access the Multichain Website.

July 20, 2020: Anyswap is founded.

July 11, 2021: AnySwap V3 was attacked and lost a total of 2,398,496.02 USDC and 5,509,222.73 MIM

Early 2021: Anyswap removed its DEX functionality and switched its core service to a cross-chain bridge platform. Renaming it from Anyswap to Multichain.

December 21, 2021: Multichain announced the completion of a $60 million financing round. The funding was led by Binance Labs, with additional participation from several notable blockchain investors, including:

  • Sequoia China
  • IDG Capital
  • Three Arrows Capital
  • DeFiance Capital
  • Circle Ventures
  • Tron Foundation
  • Hypersphere Ventures
  • Primitive Ventures
  • Magic Ventures
  • HashKey

Investment Data: Crunchbase Investment Data for Multichain (formerly Anyswap) is available here.

December 23, 2021: In the same month, a dispute emerged over equity ownership of Multichain shortly after the project completed a major financing round. Multichain co-founder and CEO Zhao Jun fought with FUSION Foundation founder Qian Dejun over who owned more of Multichain's equity. The disagreement highlighted potential governance issues despite Multichain's continued technological progress.

January 18, 2022: Multichain disclosed a major vulnerability impacting six tokens: WETH, PERI, OMT, WBNB, MATIC, and AVAX—Approximately $3 million in assets were lost due to this security incident. The team initially claimed the vulnerability was successfully patched, user assets were secure, and cross-chain transactions would be unaffected, but this turned out to be untrue.

January 13, 2023: Multichain launched zkRouter, and published the zkRouter white paper.

March 15, 2023: Multichain announced that its total transaction volume had exceeded $100 billion. 

May 21, 2023: Multichain CEO Zhaojun was arrested from his home by Chinese authorities and has been unreachable by Multichain's global team since then. The team discovered their operational access keys to the MPC node servers had been revoked.

Without access to this account, team members cannot log into the MPC servers facilitating Multichain's cross-chain operations. His arrest severed the team's ability to manage servers and bridge transactions, showcasing centralization risks despite Multichain's decentralized technical architecture.

May 24, 2023: The tower has begun unfolding into a thousand pieces as users reported abnormal delays in cross-chain funds arriving on Multichain.

May 25, 2023: Binance announced the suspension of bridged token deposits. And Andre Cronje (AC) stated that the Fantom Foundation stopped providing liquidity for the MULTI token on SushiSwap.

May 27, 2023: the LayerZero cross-chain bridge protocol Stargate proposed emergency measures to isolate and protect assets on its Fantom platform. These proposed steps included:

  • Disabling the Fantom Pool and associated cross-chain paths
  • Setting STG releases in the Fantom Pool to zero
  • Disconnecting the Fantom Pool from other liquidity pools
  • Removing and unlocking any USDC POL routed through Multichain
  • Depositing the unlocked POL into the Ethereum USDC Pool
  • Whitelisting existing Fantom LPs

June 4, 2023: Zhaojun's family regained access to the cloud server platform hosting Multichain's infrastructure using saved login credentials from Zhaojun's personal computer. However, they only granted Multichain engineers restricted physical access to the computer itself to fix specific issues related to Router2 and Router5.

July 6, 2023: Approximately $125 million worth of assets bridged across multiple chains were anomalously drained into unknown wallets from the Multichain cross-chain protocol.

This included around $122 million taken from the Multichain Fantom Bridge, comprised of:

  • 57.8M USDC
  • 1,024 WBTC
  • 7,214 WETH
  • 4.178M DAI
  • 491,657 LINK
  • 910,654 UNIDX
  • 1.493M USDT
  • 9.674M WOO
  • 1.297M ICE
  • 1.362M CRV
  • 134.48 TFI
  • 502.4K TUSD

Additionally, $6.835 million was drained from the Multichain Moonriver Bridge, including:

  • 4.83m USDC
  • 1.042m USDT
  • 780k DAI
  • 6.122 WBTC
  • 666.47k USDC was taken from the Multichain Dogechain Bridge

Following this exploit, Multichain suspended activity on its asset bridges.

July 7, 2023: Multichain announced on Twitter that its services had halted, with all bridge transactions stuck on their source chains. Multichain asked users to avoid using its bridging services after detecting a large amount of tokens being moved from its bridges to an unknown address.

Just hours prior, blockchain security firm PeckShield had alerted Multichain to suspicious activity on its Fantom bridge, indicating major token outflows of around $102 million. Impacted tokens included wrapped Bitcoin (WBTC), USDC, DAI, Ether (ETH), and Chainlink (LINK), with total losses from the suspected exploit exceeding $130 million.

July 7, 2023: Abnormal transfers moved user assets from MPC addresses to unknown wallets. Per Zhaojun's sister, login information from Kunming was found on the cloud platform alongside fund transfers from MPC addresses.

July 9, 2023: Zhaojun's sister transferred the remaining user assets in the router pool to two Ethereum addresses she controlled, identified as 0x1eed63efba5f81d95bfe37d82c8e736b974f477b and 0x6b6314f4f07c974600d872182dcde092c480e57b.

July 13, 2023: Police detained Zhaojun's sister based on family information, leaving the status of her preserved assets uncertain.

September 29, 2023: Out of the blue, the former engineer of Multichain announced Value Router. However, the public didn't like what they saw and most of the comments were negative and showed distrust of anything related to the Multichain project.

November 19, 2023: This marks the final post from Value Router, since then, there were no longer anymore new communication from any known ex-Multichain employees.

Late November, 2023: All traces of Value Router linked from the original post from the Multichain account has been removed.

As of January 2024, there has been no new information regarding Multichain, leading us to believe that this marks the end of the project. But, if you are feeling like a detective, you can start by constantly watching this Multichain portfolio.

However, the future remains uncertain, and there may still be developments yet to come and once that happens, we will update this article again.

The Creditcoin Approach to Multichain

Creditcoin Multichain Proposal

In 2024, it is becoming increasingly evident that the future of Web3 will be multi-chain.

Without any multichain solutions out there, it is clear that a massive void is here if no one can create a true frictionless multichain solution for the Web3 space.

Just as no single platform achieved full domination on Web2, we expect multiple interconnected blockchains to compose Web3, each serving distinct roles based on their unique capabilities.

Creditcoin was designed from the outset for cross-chain interoperability, verifying and recording credit transactions across networks.

It currently utilizes a one-way oracle to read data from external chains, register wallets, validate loans, and aggregate credit histories. However, this method only enabled basic loan verification.

As Creditcoin evolves, its native interoperability will allow more advanced cross-chain functionality.

Creditcoin aims to become a core component of the emerging multi-chain landscape, seamlessly communicating with other protocols to provide a unified credit infrastructure.

How Would the Creditcoin Multichain Future Look Like

  • Multi-Chain Smart Contract Coordination: EVM unlocks developer creativity for advanced financial products while enabling multi-chain asset transfers not confined to origination chains. For example, borrowers are not confined to repaying on the origin chain in real-world asset bridging. For example, one could borrow USDT on Tron but repay the loan on BNB Chain instead of Tron.
  • Multi-Chain Marketplaces: Interoperable smart contracts enable multi-chain marketplaces without having to peg your asset to bridges. For example, users can list their NFT on Ethereum and trade for ETH and BNB. The master contract on CC3 can accept the NFT listing on Ethereum, verify payment happened on BNB, and release the NFT to the buyer’s address on Ethereum.

This cross-chain flexibility allows tapping liquidity where it exists while repaying where optimal.

Users aren't limited to single-chain markets and can access broader capital sources.

Final Thoughts

The rise and fall of Multichain offers several key takeaways for the crypto industry. First, it highlights the risks of centralization, where dependence on a single point of failure, like access keys held by one individual, can disrupt entire systems.

Second, the repeated exploits and losses associated with Multichain underscore the need to change how EVM chains communicate with other EVM chains.

Finally, Multichain's collapse leaves a gap in the market for seamless, secure cross-chain interoperability.

One thing is sure: the future is multi-chain, but only time can tell when this future will be fulfilled.

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