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Synthetix’s sUSD Stablecoin Continues to Struggle with Depeg: Drops as Low as $0.66
In a recent development, Synthetix’s sUSD stablecoin has plummeted to as low as $0.66, representing a significant 30% deviation from its pegged value of $1. This drastic depeg has raised concerns about the long-term viability of the stablecoin model and Synthetix’s ability to recover from this crisis.
In response to the crisis, Synthetix has outlined a three-tiered approach to address the current situation. The first step involves continued support for sUSD liquidity through Curve pools and deposit campaigns on its derivatives platform, Infinex. This move aims to provide an immediate stabilizing effect.
For the medium term, Synthetix plans to introduce “simple debt-free” SNX staking to encourage individual debt repayment within the ecosystem. This strategy seeks to promote healthy growth and stability within the network.
Finally, for long-term recovery, the protocol intends to implement capital efficiency changes through the 420 Pool. Additionally, it will take over management of sUSD supply at the protocol level and introduce “adoption-focused mechanisms” across its product range.
In a statement on April 2, Synthetix founder Kain Warwick acknowledged the current market conditions. He emphasized that the volatility is primarily caused by the removal of the primary driver for buying sUSD. Warwick also clarified that sUSD is not an algorithmic stablecoin but rather a “pure crypto collateralized stable.” He noted that, while it is true that the peg can and does drift, there are mechanisms in place to push it back into line if necessary.
The continued struggle of Synthetix’s sUSD stablecoin has raised concerns about its future stability. The success of these recovery plans will depend on the ability to address oversupply issues and rebuild market confidence.
Source: https://coincentral.com/synthetixs-susd-stablecoin-continues-to-struggle-with-depeg-drops-as-low-as-0-66/
