Fantom DEX forced to shut down after multichain incident
- Once recognized as an integral part of Fantom, SpiritSwap has decided to stop running.
- New addresses overlooked joining the Fanton network as trust for the project fell.
SpiritSwap, a Decentralized Exchange (DEX) operating on the Fantom [FTM] ecosystem, has announced that it will cease to function from 1 September. In a tweet shared by pseudonymous Fantom enthusiast Fantom Ecologist, the SpiritSwap team said the decision was necessary due to its inability to cope with the numerous challenges it has faced.
They're looking for a team to hand things to; otherwise operations will cease on September 1; a guide to help users withdraw $SPIRIT dregs as they unlock will be developed ? pic.twitter.com/Syu2wqNlAY
— The Fantom Ecologist ?? (@ftm_ecologist) August 9, 2023
How much are 1,10,100 FTMs worth today?
The spirit leaves the market
On several occasions, the Decentralized Finance (DeFi) space has seen its fair share of ups and downs. Fantom in particular has been affected after its multichain bridge lost $126 million to a hack.
Following the unfortunate multichain incident, the DEX noted that it could not weather the storm anymore after the hack left its treasury drained. SpirtSwap explained,
“The unfortunate multichain hack has left our treasury drained, and without the means to finance essential aspects of our operation— from regulator development costs to operational salaries, from monthly costs to marketing.”
In 2021, SpiritSwap emerged as a popular DEX on the Fantom Opera Network during the bull market. Since it allowed traders to swap tokens easily on the Fantom chain, it experienced a surge in adoption and became an integral part of Fantom.
Recall that the multichain incident affected Fantom’s Total Value Locked (TVL) negatively. TVL measures the unique smart contract deposits flowing into a protocol. When the metric increases, it means the chain in question is trustworthy.
But a notable decrease implies the exit of liquidity and distrust for the said protocol. Fantom’s situation was the latter as DefiLlama revealed that the TVL decreased by 36.91% in the last seven days.
Famine in Fantom but the swap remains open
Additionally, Fantom’s development activity tanked. According to Santiment, the project’s development activity was down to 0.381.
The development activity tracks the work done in public GitHub repositories. When the metric increases, it infers that the developers are largely involved in the forking of a repository.
The decline as of this writing suggested that commitment to shipping features and polishing the Fantom network was not a priority for developers.
Fantom’s network growth also maintained its decrease. Network growth shows the number of new addresses being created. Thus, the decrease in the metric meant traction on Fantom was unimpressive.
Realistic or not, here’s FTM’s market cap in ETH terms
However, SpiritSwap noted that while it was planning on finally winding down operations, it was open to transferring the project to a worthy and interested team. In its statement to its community, SpiritSwap said,
“Right now, we are looking for a team to handover SpiritSwap and will be happily assisting them in their transition period if they’d like to take control/ responsibility during this period. Unless we can’t find a team, the winding process will happen.”