The Synthetix protocol’s native stablecoin, Synthetix USD (SUSD), has slipped further away from its US dollar peg, reaching new all-time lows under $0.70. However, the firm reiterates that this isn’t the first time the asset has been under significant stress, and several risk measures are in place.“Synthetix and sUSD have weathered multiple bear markets and periods of stablecoin volatility; this is not the first resilience test,” a spokesperson from Synthetix told Cointelegraph.
Related: Crypto in a bear market, rebound likely in Q3 — CoinbaseSynthetix founder Kain Warwick explained on April 2 that the volatility is largely due to the primary driver of sUSD buying having been removed.“New mechanisms are being introduced, but in this transition, there will be some volatility,” Warwick said in an X post.“It is worth pointing out that sUSD is not an algo stable, it is a pure crypto collateralized stable, the peg can and does drift, but there are mechanisms to push it back in line if it goes above or below the peg,” he added.
For mid-term measures, Synthetix has introduced “simple debt-free” SNX staking that it says will “encourage individual debt repayment.”Over the long term, the firm says it will make capital efficiency changes through the 420 Pool, take over protocol-level management of sUSD supply, and introduce new “adoption-focused mechanisms” across Synthetix products.
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Author / Journalist: Cointelegraph by Ciaran Lyons
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