The sUSD depegging is caused by the SIP-420 mechanism change, not a bad debt issue

ChainCatcher news, according to Parsec analysis, the recent depegging of the Synthetix stablecoin sUSD 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 mint sUSD individually and bear personal debt, but instead delegate funds to a public pool, achieving a structure without liquidation and personal debt. However, when the price of sUSD deviates from the peg, stakers no longer have the incentive to repurchase sUSD at a low price to repay debts, and the protocol's original self-regulating mechanism fails. Meanwhile, over $80 million of SNX has flowed into the SIP-420 pool, coupled with Infinex activities driving position growth, leading to a rapid expansion of sUSD supply, while the market lacks corresponding demand, further putting pressure on the pegging mechanism.

Currently, sUSD has fallen to $0.87, with a depegging of over 13%. The Synthetix team stated that they are working to rebuild sUSD demand through integration with Aave and Ethena, as well as strengthening Curve incentives.