sUSD depegging is caused by the change of SIP-420 mechanism, not bad debt problem

On April 11th, according to Parsec analysis, the recent deviation of the Synthetix stablecoin sUSD from its peg is not due to bad debt or protocol failure, but rather a side effect of the SIP-420 mechanism adjustment. SIP-420 introduces a shared debt pool mechanism, where SNX stakers no longer individually mint sUSD and take on personal debt, but instead delegate funds to a public pool, achieving a structure with no liquidation or personal debt. However, when the sUSD price deviates from the peg value, stakers no longer have an incentive to buy back sUSD at a lower price to repay debts, causing the protocol's original self-adjustment mechanism to fail. At the same time, over $80 million in SNX flowed into the SIP-420 pool, combined with the Infinex activity driving holding growth, leading to rapid expansion of sUSD supply with a lack of corresponding demand in the market, further straining the peg mechanism.

Currently, sUSD has dropped to $0.87, with a deviation of over 13% from the peg. The Synthetix team has stated that they are rebuilding sUSD demand through integration with Aave, Ethena, and strengthening Curve incentives.