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Nima Capital Allegedly Dumps 9M SYN Tokens Before Liquidity Period Ends, Price Tanks 20%

2 mins
Updated by Kyle Baird
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In Brief

  • Nima Capital, Synapse's first liquidity partner, dumped 9 million SYN tokens causing a 20% price drop.
  • Nima pulled out 8 months before the end of its term, causing speculation and concern among investors.
  • Synapse token prices further crashed from $0.410 to $0.309, marking a 93% drop from its October 2021 peak.
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Cross-chain communications network Synapse has seen its native token price dump following a large removal of liquidity from the protocol. As a result, SYN prices have tanked more than 20% over the past few hours. 

On September 5, Synapse Labs alerted its users that a liquidity provider had sold their tokens and removed liquidity. 

Nima Capital Dumps Liquidity 

The protocol team wrote that a Synapse liquidity provider sold their SYN tokens. Furthermore, this has caused a crash in its prices. 

“We’re investigating unusual activity on their wallets and are working to get in touch with them. Will update once there is more info.”

There was no security breach of the protocol or bridge, it confirmed

Researcher “Spreek” reported that ‘somebody’ just dumped 9 million SYN in two transactions with one minute separating them. The value of the tokens at the time was around $3.7 million.

Fellow researcher “Wazz,” said that it was Nima Capital, a crypto venture capital firm. “Even VCs are rugging now,” they exclaimed. 

Nima Capital was designated Synapse’s first liquidity partner following a proposal in March. The firm provided $40 million in “actively managed stablecoin liquidity for a 12-month term,” according to the proposal. 

It appears that Nima Capital has pulled the plug with eight months remaining on its liquidity term. 

Screenshot from proposal. Source: Synapse governance forums
Screenshot from proposal. Source: Synapse governance forums

Furthermore, Nima Capital’s website (nimacap.com) had gone offline at the time of writing. The firm’s X (Twitter) feed had also been set to “protected,” whereby only approved followers can view them. 

According to Crunchbase, Nima Capital has made 31 investments in DeFi and crypto. Its most recent investment was in April when Teahouse Finance raised $5 million.

Nima has also invested in NFT developer Flow, Fordefi, Eversify Labs, OneOf, and Morpho Labs over the past year or so. There were very few other details at the time of writing. 

Synapse TVL has tanked 20% and is currently $113 million, according to DeFiLlama

Read more: Exploring DefiLlama: An Extensive Guide to DeFi Tracking

SYN Price Tanks

Synapse token prices fell 24% after the big sell-off a few hours ago. It was trading at $0.410 before crashing to $0.309 during early Asian trading on Tuesday. 

At the time of writing, SYN had recovered marginally to trade at $0.339.

USD/SYN 1 day. Source: BeInCrypto
SYN Price in USD 1 day. Source: BeInCrypto

Furthermore, like most DeFi tokens, SYN had already been battered in the brutal bear market. It has lost 40% over the past month and is down 93% from its October 2021 all-time high of $4.92. 

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Martin Young
Martin Young is a seasoned cryptocurrency journalist and editor with over 7 years of experience covering the latest news and trends in the digital asset space. He is passionate about making complex blockchain, fintech, and macroeconomics concepts understandable for mainstream audiences.   Martin has been featured in top finance, technology, and crypto publications including BeInCrypto, CoinTelegraph, NewsBTC, FX Empire, and Asia Times. His articles provide an in-depth analysis of...
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