Synthetix founder Kain Warwick has acknowledged that sUSD has been depegged for over a year, taken personal responsibility for treasury mismanagement, and published a detailed thread this morning explaining the path forward: winding down the SNX-backed stablecoin and replacing it with a basis-vault-backed instrument powered by the protocol's new v4 exchange.
Warwick's eleven-tweet thread follows governance's passage of SIP-423, covered earlier today by The Defiant, which would freeze the sUSD contract and pay holders four SNX per sUSD. In the thread, Warwick goes further than the SIP itself, framing the depeg as a multi-factor failure and detailing the reasoning behind every step.
The protocol's treasury has absorbed roughly 30% of outstanding sUSD supply over the past year, according to Warwick's thread. Yet he says that buying back the rest is not an option: selling SNX at current prices to retire the remaining sUSD would be value-destructive, and there is no demand for locked SNX that would allow the protocol to repeg without deepening that discount.
On the 420 pool, Warwick's assessment is direct. Introducing the mechanism "very likely saved the protocol from a death spiral at the cost of the sUSD peg." SNX holders absorbed that cost; the thread frames sUSD as a liability of SNX holders specifically, which is why the SIP-423 wind-down uses SNX rather than cash to make holders whole.
