Multichain. Anatomy of a Collapse

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⭐️Today's selection:

• 🔗Multichain - Summary
• 💰Venture Mondays
• 👌Selected Meme of The Day
• 📰Bite-Sized News

MULTICHAIN. A SUMMARY

Recently, an event of great significance rocked the crypto-sphere - the concluding act in the life of the Multichain cross-chain protocol.

In a candid recounting, the project team unveiled the factors that led to the downfall of their innovation…

So, let's unravel the mystery behind the termination of this major project.

The dramatic collapse of the Multichain cross-chain protocol began with the sudden arrest of its CEO, Zhaojun, on May 21, 2023. Cut off from the global team, he left them without access to the vital servers, all tied to Zhaojun's personal cloud account.

They later discovered that Zhaojun's digital arsenal - from his computers to hardware wallets - had all been confiscated by the authorities. To compound the problem, all project funds and investments had been under his control.

With little information at their disposal, the team managed to keep the project afloat, running on what was left of their access to servers in the protocol that perform other functions apart from the Multi-Party Computation (MPC). They heeded legal advice, refraining from public disclosures about the case.

By May 30, they took the hard step of informing the community about Zhaojun's disappearance and the technical issues they were facing.

Things appeared to be looking better on June 4, when Zhaojun's family managed to log into the cloud server. They allowed Multichain engineers to address technical issues, albeit in a limited capacity.

While the family and their lawyer stayed in touch with the police, the team was kept in the dark about case details. They clung to hope with the promise of Zhaojun's eventual release.

Even amidst the turmoil, the Multichain protocol held on. The team, under immense pressure, did their best to keep the system operational.

However, on July 7, a new problem arose: user assets started moving to unknown destinations.

In an act of preservation, Zhaojun's sister transferred the remaining user assets to the router pool on July 9. The team, along with several project stakeholders, were promptly notified. You can imagine the continuation, right?

Zhaojun's sister was detained by the police on July 13…

Faced with a wall of challenges - the shortage of alternative sources of information, and drained operational funds - the team found itself cornered, with no choice but to hit pause on operations.

In the midst of this upheaval, the project has lost an astounding $220 million. Was the team randomly targeted by the authorities, or is there more to the story? It remains an enigma.

One should also consider that the remaining free team members may have deliberately omitted other "interesting" details. It's possible that this might be the last update on the project, or perhaps not.

The conclusion is clear — diversification is key! Not just in investments, but also in the dApps that we use!

TL;DR: On May 21, Multichain's CEO was taken into custody by the police, and there has been no contact with him since. All equipment has been seized. All the project funds were under the CEO's control. Later, fund withdrawals from the protocol were detected, and the CEO's sister transferred the remaining money to other wallets, and she got also detained. The team neither has access to $220M in funds…nor multichain's domain name and key servers.

VENTURE MONDAYS

NFT Lending Protocol Gondi raised $5.35M in a Seed funding round led by Hack VC, Foundation Capital, with participation from Dragonfly Capital, Pantera Capital, Archetype, FirstMark, Proof, 6th Man Ventures (6MV), Distributed Global, FJ Labs, Afore Capital, Third Kind Venture Capital (3kvc), FundersClub, 17Sigma, Myelin VC, ANIMO Ventures.

The competition within this specific market segment is escalating substantially, with well-funded entities making their entrance. It's astounding to consider that, even as recently as 2017, we could hardly envision a future where JPEGs would play a part in such intricate financial frameworks.

NFT ticketing company GET Protocol raised $4.5M in a Seed funding round led by Flow Ventures, with participation from Animoca Brands, Tezos Foundation, Red Beard Ventures, FunFair Ventures, and Sebastian Borget.

In 2021, for those who were new to the concept of Non-Fungible Tokens (NFTs), the first key feature shared was its remarkable potential in ticketing systems.

NFTs, characterized by their authenticity and non-interchangeability, introduced an innovative way to manage tickets for events.

Also, NFTs offer an incredible opportunity in royalties as tickets for big events, when resold on NFT marketplaces, could lead to significant revenue. This marks a stark contrast to the traditional paper-ticket trades, which were often vulnerable to counterfeiting and didn't offer the same possibility of earning shares from reselling.

Example from the world as it is today:

According to Nansen data, 342 major NFT projects earned about $1.42bn in royalties.

However, most of these funds were received a year ago. Now the volume of NFT royalty payments is rapidly declining.

Some projects have started to explore ticketing potential by simply creating an NFT collection on platforms like OpenSea, not needing much more than that. It's still early days, and we can only speculate about the full scale of NFT ticketing, but the trend is visibly on the rise.

This is where GET Protocol comes in, directly addressing this opportunity. Tickets under this system, in particular, have self-updating QR codes, eliminating the risk of fraud. Thanks to blockchain and advancements in NFT marketplaces, these are always sellable in an anonymous and quick manner. '

Moreover, on GET, there is an extra feature: the price of the ticket may be locked to prevent overpricing… This is a bit controversial, yet still - no one knows which way will become the most popular in 5-10 years.

SELECTED MEME OF THE DAY

BITE-SIZED NEWS

• Celo Blockchain Targets Ethereum Reintegration and Layer-2 Transition. If passed, the shift would enhance security and keep the gas fees affordable.
• Coinbase Halts Staking Services Amid Regulatory Concerns in Four US States. Coinbase users in four US states will no longer be able to use staking services.
• Geist Finance Closes Doors Following Multichain Exploit. Geist Finance once managed almost $30 million worth of crypto assets.