Fantom DEX SpiritSwap On The Verge Of Shutdown? Here’s What Has Changed

Opeyemi Sule

1 year ago

3 mins read

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SpiritSwap, a decentralized exchange (DEX) on Fantom, will no longer be shutting down its operations in September after it received a takeover offer from Power, another Fantom-based DeFi protocol. The proposed shutdown was a result of cross-chain protocol Multichain’s collapse, which had a significant impact on the Fantom ecosystem.

On August 9, SpiritSwap announced on Discord that it is “winding down” operations and is looking for a team to take over the project after its treasury was drained in the Multichain exploit. The protocol initially planned to shut down by September 1, 2023, but it appears that won’t be happening anymore after Power’s intervention.

This would come as a relief to several SpiritSwap community members, especially those who have the native token SPIRIT locked on the protocol. According to the protocol’s website, there are currently over 410 million SPIRIT tokens locked.

Power To Deposit 200,000 USDC Into The SpiritiSwap Treasury

On August 16, the SpiritSwap community approved the proposal to hand the keys of the protocol to Power, a non-fungible token platform on Fantom. Power has now proposed to deposit 200,000 USDC into the SpiritSwap treasury.

The team behind the NFT platform stated in the proposal that the deployment of these funds into the treasury is the first phase of ensuring that SpiritSwap survives. Meanwhile, Power claims to hold more than $1 million in liquid assets across multiple chains “ready to mobilize for use”.

In the proposal, the Power team clarified that it has also been developing its own decentralized exchange, PowerSwap. Then, it laid out plans to integrate some designs of the new DEX into SpiritSwap.

It is worth mentioning that Power was also impacted by the Multichain exploit. Fortunately, the protocol’s treasury assets were not bridged to Multichain, leading to relatively small losses.

Multichain Exploit – The Impact On Fantom

The Fantom ecosystem was the biggest victim in the Multichain exploit in July, which resulted in a total loss of over $126 million. The attack seemed to have specifically targeted the protocol’s Fantom bridge, causing a drain of more than $120 million worth of assets.

As inferred earlier, the ripple effect of the Multichain hack spread across various projects on the Fantom blockchain. As a result, the total value locked (TVL) on the network has been on a steady decline.

Fantom has seen its TVL drop by more than 61% since July 6 – the day of the Multichain exploit. As of this writing, the total value locked on the network stands at about $86.2 million, according to data from DefiLlama.

FTMUSDT continues downward trend on the daily timeframe | Source: FTMUSDT chart on TradingView

Featured image from iStock, chart from TradingView

Opeyemi Sule

Opeyemi is a proficient writer and enthusiast in the exciting and unique cryptocurrency realm. While the digital asset industry was not his first choice, he has remained absolutely drawn since making a foray into the space over two years. Now, Opeyemi takes pride in creating unique pieces unraveling the complexities of blockchain technology and sharing insights on the latest trends in the world of cryptocurrencies.

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