Susd Stablecoin is integral to the Synthetix protocol, designed to hold a $1 PEG, which has hit $0.68 as of April 18, 2025. This dramatic Depegging campaign sparked the Defi community and raised questions about the stability of decentralized Stablecoins.
SUSD value collapses to $0.68
Unlike FIAT-backed Stablecoins, SUSD relies on $SNX’s accumulation and debt library, making it vulnerable to protocol changes. The recent price drop began around March 20, 2025, marking one of the worst disruptions in SUSD history. By April 10, Stablecoin’s value fell to $0.83 and continued to drop sharply, reaching $0.68 today.
Source: Coingecko
Why Susd DePeg?
Depegging mainly comes from SIP-420 The protocol update, which changed the debt management and SUSD issuance process of the Synthetix ecosystem. Prior to SIP-420, $SNX Stakers minted Susd individually and managed debt, incentivizing them to buy SUSD at a discounted price to pay off debts and maintain PEG.
The update introduces a protocol-owned stacking pool – “420 pool”, where Stakers jointly deposit funds, eliminating the stabilization mechanism of individuals being motivated to buy discounted SUSDs. This shift weakens the mechanisms to historically restore nails during price deviations.
The update also caused a surge in SUSD supply. $SNX’s Minting Susd’s staking rate dropped to 200% now, making Mint Susd easier. At the same time, according to parsec research$SNX worth over $80 million flowed into the “420 Pool”. Combined with Infinex’s campaign-driven holdings, SUSD supply has expanded, resulting in oversupply and undersupply to lower prices.
Also, if the value of $SNX is lowered enough, SUSD will no longer be fully supported. Worries about undersufficiency may prompt users to swap SUSD for $SNX and sell it. Such an action will cause additional downward pressure from $SNX, triggering a deleveraging cycle. Prices for SNX have dropped since March and may have contributed recently to the SUSD DEPEG campaign. However, despite the sharp drop in SUSD prices, $SNX still has positive growth today, reflecting mixed market sentiment.
Source: Coingecko
In response to the Depegging campaign, Synthetix’s Total Value Lock (TVL) fell by 30% from the total value between March 29 and April 17, 2025.
Since April 9, the decline has been with PERP Active accounts and PERP volumes down by 70%, reflecting the decrease in engagement caused by SUSD instability, as reported Synthetix Statistics.
Source: Defillama
Source: Synthetix
Synthetix’s response plan
The Synthetix team has acknowledged the results of “mechanical transition pain” and is actively addressing the issue. The team is enhancing liquidity incentives, especially in the curve pool, to attract buyers and restore market balance.
More collaborations are also underway to create new demand channels to integrate them into the loan market or other Defi applications.
In addition, Synthetix founder Posts on x He now owns $35 million in SNX and is the largest holder. He explained that he sold up to 90% of his purchase funds $eth Shareholdings since 2020 support Synthetix operations.
For the Defi ecosystem, this crisis underscores the importance of a strong backup mechanism during protocol escalation. As Synthetix is committed to recovering SUSD’s nails, the success of its efforts will affect confidence in algorithm stability and influence future Fefi designs. Stakeholders should closely monitor developments as the results will determine whether SUSD can restore its stability or face ongoing challenges in a competitive Defi market.
