Nima Capital Accused of "Breach of Trust," Dumps Large Amount of SYN

The crypto community is buzzing about unusual transactions involving the SYN token from the cross-chain bridge Synapse.

Nima Capital Accused of Dumping SYN

On the morning of September 5th, several members of the crypto community on X (formerly Twitter) noticed two transactions that sold 9 million Synapse (SYN) through the decentralized exchange SushiSwap, netting $2.3 million.

These transactions caused the SYN price to drop sharply by over 20% from $0.41 to $0.30 on Binance.

After some investigation, the community suspected that Nima Capital was behind these transactions.

Proposal and Alleged Breach

In March 2023, Nima Capital had submitted a proposal to Synapse, offering to provide $40 million in liquidity to Synapse's pools for 12 months. Nima Capital claimed that having a third party ensure liquidity would optimize capital efficiency for Synapse, reducing reliance on individual liquidity providers who might only participate when they see immediate benefits.

In return, Nima Capital sought a grant of 10 million SYN and 33% of swap and bridge fees. The Synapse DAO approved this proposal with a 99.22% approval rate.

However, Nima Capital's actions seem to have violated this agreement, as they sold SYN after only five months of providing liquidity, despite the one-year commitment.

The community also accused Nima Capital of withdrawing stablecoin liquidity from Synapse following the SYN sale. The fund has since hidden its website and protected its Twitter account.

Synapse's Response

Synapse confirmed the incident, stating that the protocol was not hacked and user funds remain safe.

Suspicious Transactions

It was also noted that Nima Capital executed their SYN sales hastily, swapping directly through the SushiSwap UI without using aggregators to optimize the exchange rate, leading to a slippage of up to 50%.

Additionally, a MEV bot intercepted and captured 6 million SYN from Nima's sell order, profiting significantly.

Broader Liquidation

The community further discovered that Nima Capital has been liquidating various assets recently, including a notable real estate property in New York sold for $80 million.

Conclusion

The allegations against Nima Capital have sparked considerable controversy, as the fund is accused of breaching trust by dumping SYN tokens and withdrawing liquidity prematurely. The incident has raised questions about the integrity of liquidity providers and the potential risks they pose to DeFi projects.