What is MULTI
Tokens
Understanding Multichain: The Future of Cross-Chain Interactions
Introduction to Multichain
In the rapidly evolving landscape of blockchain technology, Multichain emerges as a robust solution aimed at advancing the functionality of decentralized finance (DeFi) and non-fungible token (NFT) trading. Positioned as an open-source infrastructure, Multichain serves as a pivotal crossroads for various blockchain networks, simplifying the way users can interact, exchange, and transact across multiple platforms. With the overarching goal of establishing itself as the primary router for Web3 applications, Multichain is primed to enhance asset mobility and optimise the trading experience within the digital ecosystem.
What is Multichain?
Multichain is best described as a cross-chain router protocol. It empowers users to bridge over 1,600 tokens across more than 30 different blockchain environments. These include Ethereum Virtual Machine (EVM)-compatible networks, parachains, and prominent blockchains like Bitcoin and those based on the Cosmos framework. Notably, the platform is engineered to deliver swift and cost-effective transactions, which is a significant improvement over conventional models.
The innovative backbone of Multichain lies in its unique Multi-Party Computation (MPC) design, which streamlines the transaction process. By utilising this technology, it reduces transaction costs and time, making asset transfers not only more accessible but also more efficient.
Creator of Multichain
While the identity of the specific creator of Multichain remains somewhat elusive within the available information, the project has its roots in a prior initiative known as Anyswap. Founded in July 2020, Anyswap marked the inception of this cross-chain technology. Over time, this original concept evolved, leading to the rebranding of Anyswap as Multichain—a move that reflects the project's growing ambitions and broader functionality.
Who are the Investors of Multichain?
Multichain has garnered considerable attention from distinguished investors within the blockchain space. The platform's financial foundations were notably strengthened in December 2021 when it successfully completed a financing round that raised $60 million. This significant investment was spearheaded by a well-known blockchain incubator while also receiving participation from various other esteemed entities within the crypto investment community. The backing of such reputable organisations signals confidence in Multichain’s potential to disrupt the market and enhance cross-chain interoperability.
How Does Multichain Work?
At the core of Multichain's functionality is the Decentralised Management Account, a specialised Smart Multi-Party Computation (SMPC) wallet that the Multichain network oversees. The operation of Multichain can be broken down into several key steps:
Asset Deposit: Users initiate their transactions by depositing assets into Multichain. This step involves specifying critical information, including the source chain, destination chain, and the amount to be transferred.
Secure Storage: Upon deposit, the assets are directed towards the Decentralised Management Account, where they are securely locked. This ensures the utmost safety and integrity of the assets during the transfer process.
Smart Contract Activation: The MPC network autonomously triggers a smart contract on the destination blockchain. This contract is responsible for minting tokens in a one-to-one ratio corresponding to the assets secured in the Decentralised Management Account.
Token Mapping and Delivery: Once minted, the tokens are systematically mapped by the deployed smart contract and subsequently dispatched to the recipient's wallet on the destination blockchain, seamlessly completing the transaction.
This innovative methodology not only reduces the complexity of cross-chain transactions but also enhances user experience through its low-cost and high-speed capabilities. Additional features, such as no-slippage swaps, ensure users receive the precise amount of tokens without the risk of price fluctuations occurring during the transaction process.
Timeline of Multichain
The journey of Multichain encompasses a number of significant events that have shaped its evolution:
July 20, 2020: The foundation of Anyswap marks the project’s initial entry into the blockchain ecosystem.
Early 2021: Anyswap pivots from its decentralised exchange (DEX) functionality to focus entirely on offering cross-chain bridge services, leading to its rebranding as Multichain.
July 11, 2021: A challenging moment occurs when AnySwap V3 faces an attack resulting in a financial loss of approximately $2.4 million in USDC along with $5.5 million in another digital currency.
December 21, 2021: Multichain successfully completes a $60 million financing round, establishing itself as an authority in the cross-chain space.
January 18, 2022: The platform discloses a vulnerability affecting six of its tokens, which incurs about $3 million in losses.
January 13, 2023: Multichain introduces zkRouter, unveiling a white paper that outlines its cutting-edge technology.
March 15, 2023: Multichain proudly announces that its total transaction volume has surpassed $100 billion, a milestone that confirms the project’s impact on the industry.
July 7, 2023: An exploit leads to the temporary halting of Multichain's services, with reported losses exceeding $130 million—a pivotal moment that emphasises the need for continued security improvements.
Key Features of Multichain
Multichain stands out in a competitive digital landscape due to several defining features:
Unparalleled Connectivity: With the capacity to bridge over 1,600 tokens spanning 30+ blockchains, Multichain offers one of the most comprehensive cross-chain capabilities available.
Efficiency: The unique Multi-Party Computation design allows for high-speed and low-cost transactions, making Multichain an attractive option for users seeking to optimise their trading activities.
Exact Swaps: The no-slippage swap feature guarantees that users receive the exact token amount intended, enhancing the reliability of transactions.
Liquidity Pools: By establishing liquidity pools in native tokens across various blockchains, Multichain facilitates smoother and more efficient cross-chain transfers, which fosters greater market activity.
Conclusion
In conclusion, Multichain is a transformative player within the Web3 and cryptocurrency domains, aiming to redefine the standards of cross-chain DeFi and NFT trading. Its focus on a secure, efficient, and user-friendly experience is coupled with an ambitious scope that promises to address the critical issues of interoperability within the crypto landscape. Despite facing challenges and security incidents that have tested its resilience, Multichain remains steadfast in its pursuit of innovation and service enhancement. As the project continues to evolve, it stands as a beacon of the potential that lies within cross-chain technology, heralding a new era in blockchain interactions and user experiences.
