Synthetix is pulling the plug on its legacy synthetic stablecoin. SIP-423, introduced on June 12 by founder Kain Warwick and core contributor Benjamin Celermajer, proposes retiring sUSD across both Ethereum mainnet and Optimism, compensating holders with newly minted SNX tokens.
The conversion math works like this: holders receive 4 SNX for every $1 of sUSD they hold, which effectively pegs SNX at a reference price of $0.25 for the purposes of this exchange. The catch is those tokens come with strings attached, specifically a one-year lock-up followed by a one-year vesting schedule.
A stablecoin that stopped being stable
sUSD was supposed to trade at $1. It’s currently trading around $0.25, according to CoinGecko and DefiLlama data. Roughly 40 million sUSD remains in circulation, which means the protocol is looking at compensating holders for approximately $40 million in face value.
The proposal also revises the Debt Jubilee program associated with the 420 Pool, a mechanism previously established to manage legacy debt within the protocol. Under the new terms, staking ratio requirements for sUSD are removed entirely. Excess debt can either be repaid early or carried under a new four-year lock period with one-year vesting terms.
