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Synthetix founder warns SNX stakers over $5 million sUSD fix

Synthetix founder warns SNX stakers over $5 million sUSD fix

GrafaGrafa2025/04/22 03:10
By:Mahathir Bayena

Synthetix founder Kain Warwick has cautioned SNX (CRYPTO:SNX) token holders to adopt a new staking mechanism aimed at stabilising its depegged sUSD stablecoin, warning of stricter measures if participation remains insufficient.

Warwick's April 21 announcement on X claims that the protocol established a staking pool that will reward users that lock sUSD with 5 million SNX tokens, or roughly $3.3 million, over the course of a year.

“I think we all know how much I like the stick,” he wrote, signaling potential penalties for non-compliance.

The sUSD stablecoin, designed to maintain a 1:1 peg with the US dollar, dropped to $0.68 on April 18 before recovering to $0.77 by April 21. 

A Synthetix spokesperson attributed recent volatility to “structural shifts” following the SIP-420 upgrade, which transfers debt risk from stakers to the protocol.

Warwick emphasised that SNX stakers, whose collective net worth exceeds “multiple billions,” hold the responsibility to resolve the depeg. 

The new sUSD 420 Pool requires users to lock funds for one year, but its current manual interface has limited early adoption. 

Once a user interface launches, Warwick warned of escalating pressure if participation lags.

The depeg follows broader challenges in the stablecoin sector, including USDC’s (CRYPTO:USDC) March 2023 drop due to exposure to Silicon Valley Bank and TrueUSD’s (CRYPTO:TUSD) January decline amid large redemptions. 

Despite these incidents, the stablecoin market has grown to over $200 billion in 2025, with annual volumes hitting $27.6 trillion.

Synthetix’s sUSD relies on SNX collateral, tying its stability to the token’s market value. 

Warwick confirmed efforts to “dial in the incentives” while prioritising development of perpetual contracts on Ethereum’s Layer 1.

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