Synthetix’s sUSD Stablecoin Depegs to New Low of $0.66
sUSD stablecoin of the Synthetix protocol fell to a low of $0.66, over 30% below its $1 peg, continuing a month-long depegging trend. Synthetix founder Kain Warwick noted that sUSD is a crypto-collateralized stablecoin, and while its peg can drift, mechanisms are being transitioned to stabilize it. The volatility increased after the SIP-420 upgrade on March 7, which restructured debt handling and reduced the collateralization ratio from 750% to 200%, weakening peg-support incentives. Concerns about liquidity and sell pressure were raised by industry experts. Despite the instability, Warwick expressed optimism about Synthetix's future and mentioned ongoing efforts to improve liquidity and stabilize sUSD. Short-term measures include enhancing liquidity through Curve pools, while medium-term plans involve encouraging debt repayment and managing sUSD supply directly. The Synthetix treasury holds $30 million in sUSD and other assets, but the situation remains fragile.
