The Treatment Towards Liquidity on Fantom

Since the Multichain incident has caused a liquidity crisis for Fantom, the assets on Fantom are likely depreciating due to insufficient liquidity.

To limit the potential damage and protect all MUXLP holders, MUX contributors have withdrawn the majority of liquidity on Fantom, bridged them to Arbitrum, and used POL to compensate for the losses from this action. All LPs won’t bear any losses from this action.

The original total value of all affected assets on Fantom was indicated to be worth $520,998.
Assets that were not reserved for traders’ positions on Fantom were indicated to be worth $451,129, and these assets were withdrawn and sold into USDT.
The USDT tokens were bridged to Arbitrum and added to the Arbitrum pool; the Arbitrum pool value increased by $329,439.
Therefore, the realized loss was $451,129 - $329,439 = $121,690.

The POL has borne all the losses to protect all LPs. Around 2-week worth of POL income (not income from the entire MUXLP pool) was used to compensate for the $121,690 of losses and protect LPs.

The security of user deposits has always been the top priority for MUX, and MUX contributors will continue to monitor the situation and take needed actions to eliminate risks further. Since the launch of the MUX Protocol in August 2022, the POL has grown from $6.54M to $10.24M; it has served as the liquidity foundation for the MUX Protocol to support trading activities, accelerated marketing activities with governance-approved funds and now protecting LPs with its organic income.

MUX will continue to optimize trading experiences, grow POL and always put security as the top priority. Please let us know if you have any questions.