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Synthetix Stablecoin (sUSD) Depegs, Drops to $0.83
The synthetic USD (sUSD) stablecoin, issued by Synthetix, has taken a hit, plummeting below its intended $1.00 peg to settle at a dismal $0.83 before recovering slightly. This recent depeg marks the second significant drop in less than 12 months, sparking concerns about the issuer’s stability mechanisms.
The precipitous fall is reportedly attributed to an oversupply of sUSD flooding the market, with reports citing Synthetix core contributor Fenway stating that traders are aggressively offloading the asset in large quantities. The disparity is starkly apparent on Curve, where sUSD accounts for a concerning 75% of the DAI-USDC-USDT-sUSD pool, indicating widespread divestment from the asset.
Adding fuel to the fire is the fact that Synthetix’s peg restoration mechanism is currently undergoing a transition phase. In an earlier series of tweets, founder Kain Warwick alerted users that he was “not worried” about the current predicament, assuring the public that his commitment to the platform remains unwavering.
Despite this stance, the beleaguered stablecoin’s plight has raised eyebrows. Having shed approximately 97% of its peak capitalization, sUSD now stands at a paltry $26 million. In an attempt to bolster Synthetix operations, Warwick revealed that he has been secretly accumulating the platform’s native SNX token. This is more than double his initial stake in 2018, with the majority of funds secured by selling nearly 90% of his Ethereum holdings since 2020.
Currently trading at $0.62, SNX exhibits a 3.4% gain from yesterday but remains mired in red across other timeframes, having dropped approximately 7% over the past week and a staggering 32% in the last month.
Source: https://cryptopotato.com/synthetix-stablecoin-susd-depegs-drops-to-0-83/
