Synthetix’s stablecoin, SUSD, has suffered a dramatic depeg, plummeting to $0.70 against the US dollar. This isn’t the first challenge for SUSD, with Synthetix noting its history of surviving volatile bear markets and stablecoin turbulence.
What Caused the Synthetix SUSD Depeg Shock?
SUSD, backed by Synthetix (SNX) tokens, is highly sensitive to SNX’s market value. Despite SNX’s minor 1.08% weekly drop to $0.63, it’s down 26% over 30 days due to a crypto market downturn. The Synthetix SUSD depeg shock stems from the SIP-420 proposal, which shifts debt risk from stakers to the protocol, sparking short-term instability.
Synthetix’s Response to SUSD Volatility
Founder Kain Warwick explained, “We’re implementing new mechanisms, but some volatility is expected during this transition.” The team remains committed to addressing the SUSD depeg issue and restoring its dollar peg.
Stabilization Plans for SUSD
Synthetix plans to boost SUSD liquidity through Curve pools and deposit campaigns on its Infinex derivatives platform. These efforts aim to stabilize the stablecoin and rebuild trust among DeFi users.
