Geist Finance Shuts Down Permanently After Multichain Exploit Losses
• Geist Finance is a lending protocol built on the Fantom network that suffered an exploit in the Multichain platform.
• As a result, Chainlink oracles misreported token values and caused $29 million worth of collateral damage.
• The team has now decided to shut down the platform permanently due to these losses.
Geist Finance Shuts Down Permanently
Lending protocol Geist Finance has announced they are shutting down permanently due to losses from the Multichain exploit. The exploit saw $29 million worth of crypto assets locked in their contracts before it occurred. Geist had been running on the Fantom network and allowing users to borrow, lend or use bridged tokens from the platform as collateral.
Chainlink Oracles Misreported Token Values
The issue arose when Chainlink oracles, which track the prices of different coins to determine their collateral and loan values, stopped producing reliable information. These oracles were tracking the value of real USDC, USDT, WBTC or ETH instead of Multichain assets which were trading at around 22% of their real value. This made it “impossible” for Geist to reopen its lending services without incurring bad debt for holders of non-Multichain coins such as Magic Internet Money (MIM) or Fantom (FTM).
Attempts To Recover Funds Unsuccessful
After confirming from Multichain that none of the funds would be recovered, Geist announced they will not be reopening any lending services. The team clarified that they are not blaming Chainlink oracles for their closure as these oracles “worked as they should” but rather had no other choice than to close given how much money was lost in this attack.
Impact Of Shutting Down On Users
The impact of this closure will be felt by many people who used and relied on Geist’s services since its launch in April 2021. This includes users who have borrowed funds through the app and those who have invested in it either directly through its native token GFC (GeistFinanceCoin) or indirectly through other DeFi protocols like Aave that used GFC as a collateral asset type. It also affects developers working with FTM chain whose projects may have depended on using GFC tokens to help power transactions across various networks connected with FTM chain such as Ethereum and Binance Smart Chain.
Future Of Lending Protocols
This unfortunate incident highlights some important issues related with decentralised finance protocols and how vulnerable they can be if proper security measures are not taken into consideration while developing them . This could lead to stricter regulations governing such protocols in order to ensure user safety is maintained going forward .
