Synthetix stablecoin sUSD has further depegged to $0.7, down 13.9% in 24 hours

ChainCatcher news reports that the Synthetix dollar stablecoin sUSD has further depegged, dropping 13.9% in the last 24 hours to a current price of $0.7038, with a market cap falling to $22.96 million. Previously, Synthetix founder Kain stated that the sUSD peg repair mechanism is in transition, having sold 90% of ETH and increased holdings in SNX.

Earlier reports indicated that the depegging of the Synthetix stablecoin sUSD was not due to bad debt or mechanical failure, but rather a side effect of SIP-420. The introduction of SIP-420 means that SNX stakers are no longer minting sUSD individually and managing their own debts, but instead are delegating funds to a shared pool to achieve effects such as no liquidation and no personal debt; since the debt is concentrated in the public pool, when the trading price of sUSD deviates from the peg, stakers have no direct incentive to buy sUSD at a low price to repay their debts, and the previously existing self-regulating defense mechanism has disappeared. The Synthetix team stated that they are establishing new demand channels, such as integrating with Aave and Ethena and strengthening Curve incentive mechanisms.