Synapse token, TVL fell after the sale of a major liquidity provider
Date: 2023-09-05 Author: Karina Ziganova Categories: BLOCKCHAIN
An unknown liquidity provider sold SYN tokens and removed profits from the bridge. This conclusion was made at Synapse Labs, the main subject of the cross-chain bridge called "Synaps".
In a September 5 announcement on X (formerly Twitter), Synapse Labs clarified that the incident had nothing to do with any breach of security over the bridge. Adding at the same time: it investigates transactions..
Synapse is based on Optimism, and this cross-chain bridge is worth about $40 billion and has over one million users. The protocol has recorded a $750 million worth of transactions and is integrating the Coinbase-backed Bases layer 2 network as early as last month.
Who is a liquidity provider?
However, Synapse Labs was unable to provide the identity of the liquidity provider. A number of network analysts provided more details about the incident.
Lookonchain reported that on April 10, the whale received 2 million SYN tokens from the “Synapse Executor 5” wallet. The organization sold 9 million SYN tokens for $2.35 million. Thus, it actually stopped the assets of this system.
Nima Capital could control the address where tokens are sold. This was announced by the Scopescan data analysis platform.
Nima Capital, an organization specializing in cryptocurrencies, has in its portfolio quite a few companies with such notoriety as Teahouse Finance and Fordefi. At the time of writing, X's official social media page was secure and the company's website was down.
SYN cost and TVL tanks
The incident affected trust in the bridge protocol, whose token dropped over 20 times to $0.31 and then bounced back to +033 dollars.
According to DeFillama, crypto investors are withdrawing their assets from the platform. This leads to a significant drop in the total value of assets locked on the protocol. The total is currently $113.24 million, a sharp decline from a peak of $1.2 billion at the beginning of 2022.
