Synapse (SYN) Drops 25% Following Exit by Major Liquidity Provider

The price of SYN, the native token of cross-chain bridge Synapse, has dropped by nearly 25% after a liquidity provider reportedly sold millions of the token and removed liquidity. 

Ongoing Investigation 

The Synapse team informed its users about the matter on X (formerly Twitter), saying they are currently looking into it and trying to reach out to the liquidity provider.

“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,” Synapse tweeted.

The platform, however, assured users that there has been no security breach of the protocol or bridge.

Shortly after the unidentified liquidity provider removed liquidity, the price of SYN sharply dropped by 25% to over $0.30 during the early hours of Tuesday. The token has, however, since recovered and is currently trading at $0.35.

A Whale Action?

While the identity of the liquidity provider remains scarce, reports suggest it is likely a whale action. The on-chain analytics platform Lookonchain revealed that a whale offloaded 9 million SYN for 2.35 million in USDC at $0.26 on September 5.

Lookonchain stated that the whale had received 10 million SYN worth $3.4 million from the “Synapse: Executor 2” wallet in April 2023. The whale currently holds no SYN, according to the analytics platform.

Crypto researcher, “Wazz,” identified the liquidity provider as Nima Capital, a venture capital (VC) firm. According to the researcher, the VC firm dumped 9 million SYN and “removed all stablecoin liquidity 8 months before the agreed gov proposal.”

However, these are all speculations, as the Synapse team has yet to publicly confirm the person or entity behind the transaction.

Synapse is a decentralized protocol that allows investors to bridge and swap assets across chains, earning yield and more. SYN acts as the governance token of Synapse that enables users to vote on future decisions of the protocol.

As shown on its website, the total value locked (TVL) on Synapse bridge currently stands at $123 million, with a total volume of $42 billion.