In response to concerns surrounding Multichain and its impact on the stability of anyUSDC, Fantom’s primary USDC asset, the LayerZero cross-chain bridge protocol Stargate has issued a proposal to disable the Fantom Pool and cross-chain paths.
The aim is to safeguard Stargate and its liquidity providers from potential risks arising from the ongoing issues with Multichain. The proposal suggests a series of technical steps to address these concerns and ensure the stability of Stargate’s operations.
Background
On May 24th, Multichain announced a “force majeure” event affecting certain parts of its service. This development has led to uncertainty regarding the status of Multichain and the stability of anyUSDC, a crucial asset for Fantom. Stargate initially included anyUSDC within its pools, considering it the “native” asset for Fantom. Presently, there is approximately $11.4 million worth of deposited liquidity pool (LP) into the anyUSDC pool, which remains effectively isolated from other Stargate pools.
The Proposal
To mitigate potential risks associated with Multichain and ensure the stability of Stargate, the proposal outlines a set of technical steps to be taken:
- Set STG emissions on the Fantom pools to 0: By reducing STG emissions to zero, Stargate aims to halt any further issuance of STG tokens through the Fantom pools.
- Disconnect the Fantom pools from every other pool: By severing the connection between the Fantom pools and other pools, Stargate aims to isolate any potential issues arising from the Fantom ecosystem, preventing them from affecting other chains.
- Remove and unwind anyUSDC POL via Multichain: Stargate proposes removing and unwinding anyUSDC POL (Pool Open Liquidity) via the Multichain platform. The anyUSDC funds would then be deposited into the Ethereum USDC pool, ensuring a more stable environment for liquidity providers.
- Whitelist existing LPs for redemption: In order to enable liquidity providers to redeem their LPs on any other chain, Stargate intends to whitelist existing LPs. This allows LPs to manually remove their LP and unwind their anyUSDC balance over Multichain, providing them with greater flexibility and control.
Considering the force majeure event disclosed by Multichain, Stargate recognizes the need for risk mitigation measures. As part of its future plans, Stargate is also exploring alternative bridging options for Fantom users, such as the possibility of utilizing Hydra.
Conclusion
To ensure the stability of Stargate and protect the interests of its liquidity providers, the proposal suggests the elimination of the Fantom USDC pool and the withdrawal of DAO controlled funds from that pool. By implementing the proposed technical steps, Stargate aims to mitigate the potential risks associated with Multichain and provide a more secure and reliable environment for its operations.
As the Stargate community engages in the voting process to determine the course of action, it is crucial to prioritize the protection of liquidity providers and uphold the integrity of the cross-chain bridge protocol. Stargate’s proactive approach in addressing these concerns demonstrates its commitment to maintaining a resilient and trustworthy ecosystem.
Read more:
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