Synthetix founder threatens SNX stakers with ‘the stick’ to fix SUSD depeg

Synthetix founder Kain Warwick has threatened SNX stakers with “the stick” if they don’t take up a newly launched staking mechanism to help fix the protocol’s ongoing sUSD (SUSD) depeg.

Warwick said in an April 21 post to X that it has now implemented a sUSD staking mechanism to address the depeg, but admitted it is currently “very manual” without a proper user interface. 

However, once the UI goes live, Warwick said, if there isn’t enough momentum, then they may have to “ratchet up the pressure” on the stakers in the sUSD 420 pool.

The sUSD 420 Pool was a new staking mechanism introduced on April 18 by Synthetix that would reward participants with a share of 5 million SNX tokens over 12 months if they locked their sUSD for a year in the pool. 

“This is very solvable and it is SNX stakers responsibility. We tried nothing which didn’t work, now we have tried the carrot and it kind of worked but I’m reserving judgement,” he said.

“I think we all know how much I like the stick so if you think you will get away with not eating the carrot I’ve got some bad news for you.”

Synthetix sUSD is a crypto-collateralized stablecoin. Users lock up SNX tokens to mint sUSD, making its stability highly dependent on the market value of Synthetix (SNX).

Synthetix’s stablecoin has faced several bouts of instability since the start of 2025. On April 18, it tapped $0.68, down almost 31% from its intended 1:1 peg with the US dollar. As of April 21, it’s trading at around $0.77, according to data from CoinGecko.

SNX stakers are the key to fixing depeg

“The collective net worth of SNX stakers is like multiple billions the money to solve this is there we just need to dial in the incentives,” Warwick said.

“We will start slow and iterate but I’m confident we will resolve this and get back to building perps on L1.”

A Synthetix spokesperson told Cointelegraph on April 18 that sUSD’s short-term volatility was driven by “structural shifts” after the SIP-420 launch, a proposal that shifts debt risk from stakers to the protocol itself. 

Other stablecoins have depegged in the past and recovered. Circles USDC (USDC) depegged in March 2023 due to the stablecoin issuer announcing $3.3 billion of its reserves were tied up with the collapsed Silicon Valley Bank.

Related: How and why do stablecoins depeg?

In recent times, Justin Sun-linked stablecoin TrueUSD (TUSD) fell below its $1 peg in January after reports that holders were cashing out hundreds of millions worth of TUSD in exchange for competitor stablecoin Tether (USDT).

Stablecoin market capitalization has grown since mid-2023, surpassing $200 billion in early 2025, with total stablecoin volumes reaching $27.6 trillion, surpassing the combined volumes of Visa and Mastercard by 7.7%. 

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