Synthetix governance has moved to retire sUSD, proposing to pay all holders back at face value in vested $SNX under SIP-423, introduced June 12. The stablecoin now trades at roughly $0.25 against its $1.00 target, per CoinGecko and DefiLlama.
Synthetix founder Kain Warwick and core contributor Benjamin Celermajer authored the proposal. Under SIP-423, the sUSD contract would be frozen and deprecated. Each eligible sUSD holder would receive four $SNX tokens per sUSD, at a conversion that values $SNX at $0.25 and sUSD at its intended $1.00 face value. The $SNX tokens carry a one-year lock followed by a one-year linear vest from the freeze date. The claim window opens approximately one year after the freeze.
Four Components
SIP-423 has four parts. First, a holder snapshot: an audit of all sUSD balances on Ethereum and Optimism at a governance-defined cutoff block. Second, the sUSD retirement itself. Third, a restructure of the existing Debt Jubilee under SIP-420, which would close the 420 Pool, remove sUSD staking ratio requirements, and give existing debt participants the choice of a four-year lock with a one-year vest, or an early exit by repaying their remaining debt in full. The fourth component, $SNX staking reform, is deferred to a separate build.
A contingent $USDT path is included: if Synthetix generates more than $10 million in protocol revenue within the two-year lock-up period, 25% of that revenue can be distributed as $USDT to legacy sUSD holders who prefer cash over $SNX. Both the $10 million threshold and the 25% share are adjustable by the Spartan Council via SCCP.
Vote Pending
SIP-423 carried a Vote_Pending status as of publication. A companion proposal, SIP-424, covering the technical implementation of the wind-down, has not yet been published.
The SIP notes that sUSD held in LP pools, vaults, or other deposit contracts cannot be automatically recovered. A separate Treasury claims process handles those cases. Core team members and the protocol itself hold material sUSD positions.
The Depeg
sUSD’s peg has eroded sharply. The SIP’s abstract states the token “trades below peg” and that Jubilee participants face “escalating sUSD staking requirements, both of which continue to hinder growth of the Synthetix Exchange.” sUSD is down roughly 28% over the past seven days and about 61% over the past 30 days, per CoinGecko.
Synthetix carries approximately $17.5 million in sUSD circulating supply across Ethereum and Optimism, per DefiLlama. $SNX trades around $0.2453, per CoinGecko, slightly below the $0.25 conversion floor set in SIP-423. The protocol’s total value locked stands at $32.5 million, per DefiLlama.
Synthetix has attempted to stabilize sUSD before. In March 2026, the protocol was still extending sUSD rewards on Infinex to support the peg. The Defiant’s January 2026 interview with Warwick covered his arguments for restructuring the debt model; SIP-423 is the structural outcome of that direction. Synthetix launched a perpetual DEX on Ethereum mainnet in December 2025, signaling a shift toward exchange-driven revenue rather than sUSD issuance.
SIP-423 is Synthetix’s first proposal to wind down sUSD rather than repair it.
