Multichain is a bridging platform for cryptocurrencies and NFTs across blockchains. Formerly known as Anyswap, Multichain lets users bridge via pegged tokens or liquidity pools. Multichain's Router will determine the best method for the coin you want to bridge.
For coins with native tokens on multiple chains, Multichain will swap cryptocurrencies across chains using liquidity pools. If there is no native coin, Multichain will lock up the token in a smart contract and mint a pegged token on the target chain.
Multichain has its own token, MULTI, that will operate as a governance token in the near future. Holders of ANY, their previous governance token as Anyswap, can convert it to MULTI 1:1.
If you've been chasing investments or yield across blockchains, you've likely heard of Multichain. It's one of the most popular projects for bridging tokens available. Without it, we wouldn't have today's simple experience when crossing chains. Until projects begin offering their own multi-chain capabilities, services like Multichain will continue to be essential. Let's look at how Multichain differs from other bridges and the mechanics of how it works.
What is Multichain?
Multichain is an open-source, cross-chain router protocol (CRP) that lets users bridge tokens across blockchains. The project was founded in July 2020 and, since then, has rebranded to Multichain. Binance also provided $350,000 to Multichain as part of its accelerator program, and Binance Labs led a $60,000,000 investment round. This round included the Tron Foundation, Sequoia Capital, and IDG Capital.
Multichain supports more than 74 chains, including BNB Smart Chain, Fantom, and Harmony. Users can transfer their assets seamlessly across blockchains through its Cross-Chain Bridges and Cross-Chain Routers. Multichain also has a governance token, MULTI, to let holders participate in the project's upcoming governance mechanism.
How does Multichain work?
At a basic level, Multichain uses two methods to bridge tokens. First, it uses smart contracts to lock tokens on one blockchain and mint wrapped tokens on another blockchain. When this isn't possible, it uses a network of liquidity pools across chains to trade bridged tokens. Usually, all this can be done in under 30 minutes without slippage.
Multichain supports Ethereum Virtual Machine (EVM) networks and a selection of blockchain networks using different technology like Cosmos and Terra. Multichain also offers a similar bridging service for NFTs (Non-Fungible Tokens). Projects that want to bridge their tokens can work with Multichain on issuing them to new blockchains. This service is free and can be completed in under a week.
To facilitate all this work, Multichain has a network of Secure Multi Party Computation (SMPC) nodes run by various parties. Let's look at all of these a little bit deeper.
When transferring across chains, Multichain uses a standard crypto pegging mechanism for some coins and tokens. Imagine you want to bridge BNB from BNB Smart Chain to Ethereum. Multichain will lock your BNB in a smart contract on BNB Smart Chain and then mint a pegged BNB token on Ethereum. This will be done in a 1:1 ratio. This option was the original service offered by Multichain when operating as Anyswap.
Not all tokens can be bridged using the MPC method above. Some tokens, for example, USDC, already exist in their native forms on multiple blockchains. To bridge your assets here, you will need to swap your coins.
As always, swapping involves the need for liquidity. Someone will need to trade with you for the coin you want, which can come in the form of liquidity pools. Other users can provide their tokens as liquidity in exchange for a share of the transfer fees.
The Multichain Router takes a user's request and uses the appropriate method from the two outlined above. This feature streamlines the bridging user experience. Any supported assets are transferable between multiple chains, whether they are native tokens or bridged by Multichain. Some projects with native tokens on a few chains, but not others, can bridge using Multichain with a hybrid approach.
Multichain is secured by a network of nodes known as the Secure Multi Party Computation (SMPC). These nodes are independent entities that can collectively sign transactions. Using a Distributed Key Generation algorithm, each node independently owns part of the private key. The complete set of private keys will never appear, let alone the possibility of being revealed. This avoids single points of failure, ensuring decentralization and security. The Multichain MPC network 2.0 consists of open nodes run by the community and partners. This ensures strengthened performance and further decentralization.
What makes Multichain unique?
There's now a large selection of bridges to pick from. So why should you choose Multichain? When you look at the project, it has several aspects that make it unique and attractive:
1. Multichain helps projects issue tokens across chains. This aspect means they facilitate bridging for both projects and users.
2. Multichain doesn't just offer a 1:1 cross-chain bridge. It also has a trusted system for accessing liquidity across blockchains. This mechanism has traditionally been challenging to operate securely and trustworthily. Multichain offers more than 2,000 bridges for crypto tokens and NFTs to thousands of projects and DeFi protocols, including SushiSwap and Curve Finance.
3. It has backing and funding from trusted industry leaders and VC firms. This point makes it easier to trust than anonymous bridging services.
4. It offers a massive range of tokens that other bridges struggle to compete with. This includes support for cryptocurrencies and NFTs on over 74 blockchains networks, including EVMs and non-EVMs.
What is the MULTI token?
MULTI is Multichain's governance token. Previously, under the name Anyswap, Multichain released the ANY governance token. Users can now convert ANY to MULTI 1:1 via the Multichain website. This mechanism means that MULTI will have a total supply of 100 million if all ANY holders convert their tokens. Multichain also has the veMULTI, which allows token holders to stake MULTI for Multichain bridge fees rewards. Holders can also vote on governance proposals through the veMULTI framework.
Where can I buy MULTI?
You can purchase MULTI on Binance's exchange using Bitcoin (BTC), USDT, or BUSD. Head to Binance's Exchange view and type MULTI in the search field to find a list of all available trading pairs. For more information on using the Exchange view, head to How to Use TradingView on the Binance Website.
How do I use Multichain?
You can use Multichain to bridge tokens typically in under 30 minutes. Let's look at bridging BUSD from BNB Smart Chain to Polygon using the Router.
1. Open the Multichain website and navigate to the Router.
2. Connect your wallet by clicking the [Connect Wallet] button in the top right corner. Make sure you're connected using BNB Smart Chain.
3. Select BNB Chain mainnet as the network to bridge from in the top field.
4. Select BUSD - BUSDToken as the token you want to bridge in the top field.
5. Select Polygon as the network to bridge to in the bottom field. The BUSD Binance-PegBUSDToken should automatically be chosen.
6. Input the amount you want to bridge before clicking the [Swap] button. You'll now need to confirm the transactions in your wallet.
Multichain offers one of the biggest selections of bridgeable tokens in its vision to become "the ultimate router in Web3". If you're interested in DeFi and need to move between networks like Solana (SOL), Avalanche (AVAX), and the Ethereum network (ETH), you can easily do so with Multichain.
By increasing interoperability, Multichain makes it easier to move between DApps and the whole blockchain technology ecosystem. With interoperability such an important part of Web3, it looks like Multichain will be an important part of making this happen.