Decentralized finance (DeFi) cross-chain bridge Synapse revealed that a liquidity provider dumped 9 million SYN tokens, which crashed the price of the native token by over 22% from $0.4 to $0.31 on September 5th.
The price has since recovered, and SYN is currently trading at $0.36. The project confirmed that there was no security breach of the protocol or bridge.
- The unknown liquidity provider was identified as Nima Capital, which also happens to be a longstanding capital partner of Synapse. The venture capital firm had received a grant from the project in exchange for locking up $40 million worth of liquidity in SYN tokens.
- Based on the data from Etherscan, it appears that the unidentified whale responsible for selling off the SYN tokens had received 10 million SYN, equivalent to $3.4 million, from the “Synapse: Executor 2” wallet on April 5th.
- Currently, there are no SYN tokens remaining in that wallet.
- Meanwhile, Nima Capital’s site went offline, and its Twitter profile was switched to protected, which prompted fears that the VC firm rug-pulled its users by removing all the liquidity just eight months before the agreed governance proposal.
- In an update to the community, Synapse tweeted,
“A Synapse liquidity provider sold their SYN tokens and removed liquidity today. We’re investigating unusual activity on their wallets and are working to get in touch with them. Will update once there is more info.”
- Rug pulls continue to wreak havoc in the DeFi ecosystem.
- According to bug bounty platform Immunefi, Web3 platforms have lost more than $1.2 billion so far this year in hacks and rug pulls across 211 specific incidents. In August alone, several projects lost over $23 million in funds.