Solomon Samuel On September 5, the price of the native token of the decentralized finance (DeFi) cross-chain bridge Synapse (SNY) plummeted after an unidentified liquidity provider on the platform unloaded nearly 9 million SYN tokens and removed all stablecoin liquidity from the bridge.
The official X account for Synapse acknowledged the liquidity cushion provided by an “unknown liquidity provider but clarified that the Synapse bridge was not compromised.
The mysterious liquidity provider was identified as Nima Capital, one of the project’s long-term capital partners. In exchange for locking in $40 million worth of liquidity in SYN, the venture capital firm received a grant from the initiative.
According to Etherscan data, the unidentified whale that dumped the SYN token received 10 million SYN ($3.4 million) on April 5 from the “Synapse Executor 2” wallet but presently holds no SYN tokens.
Eight months before the agreed-upon governance proposal, the VC firm evicted its users.
This became evident after the Nima Capital website and the project’s X (previously Twitter) went inactive, prompting many to refer to it as a VC rug.
After the native token of a project reaches a certain price threshold, it is common for the project’s creators or developers to alter the code or abandon the project Nevertheless, a rug pull by a VC firm is rare.
As a consequence of the token dump, the price of the native token SYN fell more than 20%, reaching a multi-week low of $0.30 before recovering above $0.35 later in the day.
While DeFi bridges have made interoperability between different protocols easier, they are frequently the primary target of exploiters, with some of the most significant DeFi breaches occurring on cross-chain bridge protocols.