The Synthetix governance proposal aims to fully retire sUSD, compensating holders at face value with locked SNX

On June 12, Kain Warwick, the founder of Synthetix, and core contributors proposed SIP-423, which aims to freeze and deprecate the sUSD contract. This is the first time Synthetix has proposed to retire rather than fix sUSD. The current price of sUSD is approximately $0.25, deviating about 75% from the $1 target, having dropped about 61% in the past 30 days.

According to the proposal, each sUSD will be compensated to holders at a face value of $1 with 4 SNX (valued at $0.25), with SNX having a one-year lock-up period and one year of linear vesting. The proposal also includes a conditional USDT pathway: if the protocol generates over $10 million in revenue during the two-year lock-up period, 25% can be distributed as USDT to sUSD holders who prefer cash.

SIP-423 also aims to close the 420 Pool under SIP-420 and cancel the sUSD staking ratio requirement. The current status of the proposal is pending vote, and the technical implementation plan SIP-424 has not yet been released. According to DefiLlama data, the circulation of sUSD is approximately $17.5 million, and Synthetix's TVL is $32.5 million.