The Fantom-based decentralized exchange (DEX) SpiritSwap announced it will shut down the project due to the fallout from the Multichain hack.
Many crypto projects are interlinked with each other. Due to that, if one project gets impacted, the contagion spreads, taking down other projects as well.
Similar events happened with the FTX and Terra Luna collapse, which impacted the entire crypto ecosystem.
SpiritSwap DEX Runs out of Funds
SpiritSwap DEX announced on Discord that it is winding down the operations and looking for another team to take over the project due to the Multichain hack. The project will remain operational until Sept.1, allowing users to withdraw their funds.
SpiritSwap wrote:
“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 find a team, the winding down process will happen automatically.”
While the team has promised users they can safely remove the liquidity, some users have complained that they cannot withdraw. However, the Discord moderator clarified that a bug has been causing the error, and the users can withdraw after the team fixes the bug.
Multichain announced its closure on July 14 due to various internal ups and downs following a $126 million hack. The impact of the Multichain collapse is widely seen across the Fantom ecosystem, causing a decline in the total value locked (TVL), winding down of projects, and depegging of assets.
Read more about Fantom here.
Locked SPIRIT Tokens
Community members are upset over the shutdown of SpiritSwap DEX, but there is also optimism about another project acquiring SpiritSwap and continuing with it. Moreover, the SpiritSwap Discord moderator has informed community members that some teams have shown interest in funding the treasury and continuing the project’s operations.
While most users can withdraw liquidity from the project, some users participated in the inSPIRIT vote-locking model, locking the native token SPIRIT for rewards and voting powers. And the smart contract will not allow unlocking of the tokens before expiry.
According to the official website, users have locked over 415 million SPIRIT tokens.
Some expire after September 1, by which time the project would have wound down operations. Hence, users are in a dilemma about the value of the locked tokens. A 45-year-old community member shared their disappointment:
“I feel sorry for myself for always making bad choices and always trusting in bad places. I lost half of my capital on multichain bridge and the other half on spirit because until it unlocks Its price is zero
I am 45 years old, and I don’t have time to start over.”
As of writing, SPIRIT is trading at $0.0007957, down around 34.19% in the past 24 hours.
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