Synthetix’s Stablecoin sUSD Depegs to Below $0.92 Twice This Week

Stablecoin sUSD, the synthetic dollar-pegged asset from Synthetix slipped below its dollar peg yesterday, April 2. The stablecoin lost its peg earlier this week, on March 31, as well. Synthetix is the seventh-largest derivatives protocol by total value locked (TVL).

Synthetix’s sUSD fell 4.6% from $0.96035 to $0.91608 in the early hours of March 31, according to CoinGecko data. Since then, the stablecoin retraced, before dipping back just above $0.91 again on Wednesday morning, over 8% below its dollar peg.

the-defiant — sUSD 7-day price chart. Source: CoinGecko

Core contributors at Synthetix acknowledge the ongoing peg instability but remain optimistic about stabilizing sUSD in the long run.

In a March 30 official Discord announcement, Fenway, a Synthetix core contributor, commented: “A strong sUSD peg is at the core of a successful 420 pool, we have been and will continue to fight to strengthen the peg,” adding: “We’re in a transitionary period[.]”

Fenway stated that excess sUSD in the market was “causing pressure” on the price of the USD-pegged asset, and promised that the team was taking measures to address the issue.

Meanwhile, market observers remain cautious. Cork Protocol founder Robert Schmitt (@robdogeth on X) weighed in on the situation in an extended post on April 1, highlighting the core issue at play:

“sUSD is experiencing a significant and sustained depeg. With no direct mechanism to restore the peg, its stability now depends entirely on market confidence and treasury intervention.”

@robdogeth

Additionally, the heavily skewed nature of the sUSD liquidity pool on decentralized exchange (DEX) Curve Finance suggests that users are actively swapping the stablecoin. Per Wu Blockchain, on March 31, sUSD made up 75.21% of the DAI-USDC-USDT-SUSD liquidity pool on Curve Finance.

sUSD previously lost its peg in a separate incident in May 2024. According to risk manager Chaos Labs, that depeg was caused by a major liquidity provider selling the sUSD it got from Synthetix spot on the corresponding liquidity pool on Curve Finance.

Synthetix’s USD stablecoin is currently trading at $0.952. With a market cap just under $29 million, it’s the 36th largest USD stablecoin, according to CoinGecko data.