Syndicate Labs to wind down; SYND token hits record low

Syndicate Labs announced on May 21 that it will wind down operations after five years building on-chain developer infrastructure. The SYND token fell to a fresh record low of $0.01061 immediately after the announcement and was trading around $0.012, down roughly 23% over the previous 24 hours.

The company pointed to a change in the rollup market as the reason for the decision, saying demand for its technology has declined. On social media, the team wrote: “Unfortunately, the rollup market has shrunk dramatically. For every new rollup spinning up, several more are quietly shutting down. The market has shifted away from our technology, making it impossible to wait out these market conditions. EVM rollups are no longer the standard.”

Syndicate said the shutdown is unrelated to a recent exploit of the Commons Bridge. A security firm reported an attacker obtained about 18.5 million SYND tokens and sold roughly $330,000 worth before bridging the funds to Ethereum. Syndicate covered reimbursements for affected holders using treasury funds reserved for incidents of this type.

The organization described its structure as two separate entities: Syndicate Labs, which handled product development, and the Syndicate Network Collective, a Wyoming Decentralized Unincorporated Nonprofit Association that holds SYND tokens and manages protocol governance. The team said governance through the collective will not be affected in the near term. The collective is open to a successor to carry on stewardship, and an orderly wind-down plan has been prepared if no successor is found.

Syndicate began by building tools for decentralized autonomous organizations and raised $20 million in a 2021 Series A round led by Andreessen Horowitz. Shifts in technical preferences within the rollup market reduced adoption of the company’s approach.

Trading volume and liquidity for SYND were volatile after the wind-down announcement. The Syndicate team said its codebase will remain open source and available for contributors regardless of the collective’s future. Whether a new steward emerges will determine the collective’s next steps.