The worth of the native token of the decentralized finance (DeFi) cross-chain bridge Synapse (SYN) plummeted on Sept. 5 after an unknown liquidity supplier on the platform dumped almost 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 the moment. 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.
— 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 mission. The enterprise capital agency had acquired a grant from the mission in return for locking $40 million value of liquidity in SYN. Etherscan information suggests the unknown whale that dumped the SYN token acquired 10 million SYN ($3.4 million) from the “Synapse: Executor 2” pockets on April 5 and at present holds no SYN tokens within the pockets.
The VC agency rug pulled its customers simply eight months earlier than the agreed governance proposal. This grew to become evident after the Nima Capital web site went offline and the mission additionally locked its X (previously Twitter), going darkish on-line, prompting many to name it a VC rug.
— Wazz (@WazzCrypto) September 4, 2023
Rug pulls are fairly a standard type of rip-off in DeFi ecosystems, the place the mission creators or builders typically change the code or pull the plug on the mission after the native token of the mission reaches a sure value threshold. Nonetheless, a rug pull by a VC agency is unusual.
The worth of SYN fell greater than 20% because 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 make interoperability simpler amongst completely different protocols, they’re typically the first goal of exploiters, with among the largest DeFi hacks happening on these cross-chain bridge protocols.
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