Synthetix has launched a new liquidity initiative aimed at stabilizing its algorithmic stablecoin sUSD, which has been trading well below its intended $1 peg. The “sUSD 420 Pool,”
Announced by founder Kain Warwick on X, the pool will reward participants with 5 million SNX tokens over 12 months in an attempt to curb the effects of the ongoing depeg.
sUSD dropped to $0.8224 as of April 18, up over 7% in 24 hours, according to CoinGecko. It was trading as low as $0.63.
The decline has been linked to recent protocol changes under Synthetix Improvement Proposal 420, which introduced a protocol-owned staking pool and lowered the collateralization ratio for minting sUSD from 500% to 200%.
🔔 The sUSD 420 Pool is launching with rewards starting in 36 hours 🔔
SNX stakers in the 420 Pool can deposit sUSD to earn a share of 5m SNX over 12 months – or 13,698.6 SNX daily
🧵 [1/5] pic.twitter.com/Xy5QUPthK9
— Synthetix ⚔️ (@synthetix_io) April 18, 2025
This change has caused a significant increase in sUSD supply, outpacing demand and leading to imbalances in decentralized exchange pools like Curve, where sUSD now makes up over 90% of some liquidity pairs.
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Locked and staked SNX
The new 420 Pool requires SNX stakers to lock their sUSD for a year to earn daily SNX rewards. Those rewards will also be locked and vest over three months after the campaign ends.
While official front-end support for the program launches next week, early access is available via Synthetix’s Discord.
Synthetix has called the current phase a “transition period” and plans to support sUSD through additional incentives and new use cases, including the upcoming Snaxchain initiative.
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