Multichain has announced its ceasing operations. The news comes just days after the protocol saw an attacker drain $125 million from the protocol’s wallets.
Cross-chain bridge protocols are designed to enable interoperability between different blockchains, allowing users to transfer assets and execute smart contract methods across chains. Multichain was one of the pioneers in this field, supporting over 90 chains and 2,500 tokens.
Multiple Attacks on the Protocol Led to Its Demise
However, on July 6, 2023, Multichain experienced a major security breach that compromised its secure multi-party computation (SMPC) nodes, which are responsible for managing the decentralized management accounts that hold the assets to be bridged.
The attacker was able to exploit a vulnerability in the SMPC nodes and withdraw large amounts of assets from various chains, including Ethereum, Binance Smart Chain, Polygon, and Fantom.
The attack resulted in losses of more than $125 million, making it one of the biggest crypto hacks on record. The Multichain team claimed that they were not involved in the attack and that they were working with law enforcement agencies to track down the hacker.
However, many users and projects that relied on Multichain’s services expressed their frustration and disbelief at the lack of transparency and accountability from the protocol.
In a statement posted on its website, Multichain announced that it was shutting down its operations due to the irreparable damage caused by the hack. The protocol also apologized to its users and partners and said that it would cooperate with any investigations or legal actions related to the incident.
The Multichain exploit has raised serious questions about the security and trustworthiness of cross-chain bridge protocols, which are becoming increasingly popular in the decentralized finance (DeFi) space. Users and projects that use such protocols should exercise caution and due diligence before entrusting their assets to third-party services.
