The value of the native token of decentralized finance (DeFi) cross-chain bridge Synapse (SNY) plummeted on Sept. 5 after an unknown liquidity supplier on the platform dumped practically 9 million SYN tokens and pulled all stablecoin liquidity from the bridge.
The official X account for Synapse acknowledged the liquidity rug by an “unknown liquidity supplier,” whereas clarifying that the Synapse bridge didn’t face any safety breach.
A Synapse liquidity supplier bought their SYN tokens and eliminated liquidity at present. We’re investigating uncommon exercise on their wallets and are working to get in contact with them. Will replace as soon as there’s extra data.
There was no safety breach of the protocol or bridge.
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— Synapse Labs (@SynapseProtocol) September 5, 2023
The unknown liquidity supplier in query was traced to Nima Capital, one of many long-term capital companions of the venture. The enterprise capital agency had acquired a grant from the venture in return for locking $40 million price of liquidity in SYN. Etherscan knowledge recommend the unknown whale that dumped the SYN token acquired 10 million SYN($3.4M) from “Synapse: Executor 2” pockets on April 5 and presently holds no SYN tokens within the pockets.
The VC agency rug pulled its customers simply eight months earlier than the agreed governance proposal. This turned evident after the Nima Capital web site went offline and the venture additionally locked their X (previously Twitter), going darkish on-line, prompting many to name it a VC rug.
Even VCs are rugging now @NimaCapital dumped 9M $SYN and eliminated all stablecoin liquidity 8 months earlier than the agreed gov proposal
Their web site went offline and twitter protected too https://t.co/ShlYcZhFbz pic.twitter.com/1ncxP13XYV
— Wazz (@WazzCrypto) September 4, 2023
Rug pulls are fairly a standard type of rip-off within the DeFi ecosystems the place the venture creators or builders usually change code or pull the plug on the venture after the native token of the venture reaches a sure worth threshold. Nonetheless, a rug pull by a VC agency is unusual.
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The value of the native token SYN fell greater than 20% on account of the token dump, registering a multi-week low of $0.30 earlier than recovering to above $0.35 later within the day.
Whereas DeFi bridges made interoperability simpler amongst completely different protocols, these bridges are sometimes the first goal of exploiters with a number of the greatest DeFi hacks going down on these cross-chain bridge protocols.
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