Hector Network Faces Liquidation Decision After Multichain Hack

The Multichain shutdown has had an impact on the latest project, Hector Network. The majority of votes have been cast in favor of liquidating assets. Hector Network, a team responsible for a decentralized finance (defi) project on the Fantom ecosystem, is taking measures to minimize further losses following the bridge hack on Multichain.

The team has proposed a course of action for the decentralized autonomous organization (DAO). They suggest either liquidating the assets in the treasury or migrating the Hector Network, its assets, and the HEC token to another blockchain platform under a different name.

Based on the current snapshot, 196 token holders have participated in the vote, with 77.68% supporting liquidation over migration at the time of writing. The voting period will last for 48 hours, with two hours remaining before it concludes. The Hector Network team has stated that the chosen timeframe aims to prevent any additional negative repercussions from the Multichain hack on the Hector Network Treasury.

The Hector Network has faced allegations of depleting its treasury funds. Previously valued at over $100 million, the treasury has gradually diminished over time. Currently, it holds assets worth $16.6 million and over one million HEC tokens, all of which could potentially be liquidated.

As a defi project that emerged from Olympus DAO, Hector Network has encountered controversies, particularly regarding its management of the treasury. Community members have criticized the project for excessive spending from the treasury without generating any returns for token holders, a practice often referred to as “slow rugging.” In June, Hector Network reported a bridge smart contract hack that resulted in the loss of over 600,000 USDC.

It’s worth noting that Multichain experienced a bridge hack that involved the unauthorized movement of over $125 million on July 6 to various third-party wallets. In response to the incident, prominent stablecoin issuers Circle and Tether froze assets worth over $65 million associated with the hacked wallet addresses.

Additionally, the cross-chain bridging protocol ceased operations after its CEO, who held sole control of investors’ funds, was arrested by Chinese authorities. His sister, who controlled the remaining assets, transferred them to her own wallet address. The Multichain team stated that without access to operational funds, the project could not continue to function.

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