Synthetix Founder Pressures Stakers to Fix sUSD Depeg

Synthetix founder Kain Warwick is turning up the heat on SNX stakers as the protocol struggles to restore the value of its stablecoin, sUSD, which remains well below its intended $1 peg.

Warwick warned that stakers who ignore the new sUSD 420 staking pool could soon face “the stick” if incentives alone don’t drive enough participation.

The new mechanism was launched on April 18 and offers stakers a share of 5 million SNX tokens over a 12-month period in exchange for locking up sUSD. Warwick described the current system as “very manual” and lacking a user interface, but said that once it’s easier to use, excuses will run out.

“This is very solvable—and it’s on SNX stakers to solve it,” he wrote. “We tried nothing, that failed. Then we tried the carrot, and that kind of worked. But if you think you’ll dodge the stick, I’ve got some bad news.”

Ethereum-based Synthetix is a decentralized asset insurance protocol that allows users to mint, hold, and trade a wide range of real-world assets by locking tokens into a smart contract. Its blockchain-based derivatives, Synths, cover major asset classes including commodities, fiat currencies, and even stocks. The protocol’s tokenized assets are collateralized through the Synthetix Network Token (SNX) in a decentralized, permissionless, and censorship-resistant method.

Synthetix’s sUSD is a crypto-backed stablecoin minted by locking SNX tokens. Its peg has been under pressure since early 2025, dropping as low as $0.68 last week—over 30% off target—before recovering to around $0.77, according to CoinGecko.

The collapse in value raised concerns over the protocol’s stability and long-term sustainability. Warwick, however, believes the solution lies in the hands of the community.

“The collective net worth of SNX stakers runs into the billions,” he said. “The capital exists—we just need to get the incentives right.”

The depeg follows the rollout of SIP-420, a proposal that shifts protocol debt risk away from stakers and onto Synthetix itself.

sUSD isn’t alone in facing peg problems. Circle’s USDC briefly lost parity in March 2023 after news broke that $3.3 billion of reserves were tied up at the failed Silicon Valley Bank. More recently, TrueUSD (TUSD), which is associated with Justin Sun, fell below $1 in January as large holders swapped it for USDT.

Despite these events, the stablecoin market continues to expand, surpassing $200 billion in total capitalization in early 2025. Transaction volume for stablecoins also jumped, topping $27.6 trillion—more than Visa and Mastercard combined.