Synthetix, a decentralized finance (DeFi) protocol, is facing challenges with its stablecoin, sUSD, which has experienced instability and deviations from its intended 1:1 peg with the US dollar since the beginning of 2025. On April 18, sUSD fell to $0.68, a 31% decline from its dollar peg. In reaction, Synthetix launched the sUSD 420 Pool — a novel staking mechanism aimed at creating a reward-based incentive structure for stability. Kain Warwick, the founder of Synthetix, has called on SNX stakers to participate in the pool and help restore the peg.
The sUSD 420 Pool is a great opportunity to earn rewards! Participants have the opportunity to earn a portion of 5,000,000 SNX tokens by locking up their sUSD in the liquidity pool for one year. This new initiative specifically aims to address the depeg crisis. It’s important because sUSD is backed by the volatile market value of Synthetix (SNX) and therefore needs to be stable.
Warwick has also focused on the key role stakers played in the sUSD depeg resolution. He even teased potential council actions should the community not make a good faith effort to interact with this new staking system.
“The collective net worth of SNX stakers is like multiple billions the money to solve this is there we just need to dial in the incentives,” - Kain Warwick
The sUSD 420 Pool introduced with SIP-420. Second, this proposal shifts debt risk from stakers to the protocol itself. How it works The use of this staking mechanism is still “very manual” with no developed user interface.
Warwick noted that sUSD’s short-term volatility was due to “structural shifts” following the launch of SIP-420.
As of April 21, sUSD is trading at around $0.77, according to data from CoinGecko, still below its intended 1:1 peg with the US dollar. Warwick remains optimistic about the situation.
“We will start slow and iterate but I’m confident we will resolve this and get back to building perps on L1.” - Kain Warwick
“We tried nothing which didn’t work, now we have tried the carrot and it kind of worked but I’m reserving judgement,” - Kain Warwick
Nguyen Thi Hanh
Cryptocurrency Writer
Nguyen Thi Hanh channels progressive, pragmatic views into high-energy, approachable crypto journalism, delivering confident, animated articles with regional and global relevance. Her optimistic, party-going spirit helps translate complex blockchain ideas into viral, visually engaging stories. Outside of writing, she enjoys urban food adventures and organizing community hackathons.
