Synthetix protocol’s native stablecoin, Synthetix USD (sUSD), has fallen to its lowest in five years, continuing a months-long battle to maintain its peg at $1. The asset has faced constant volatility since early 2025. On January 1, sUSD fell to $0.96 and recovered to $0.99 in early February. The price fluctuations continued throughout February. In March, the price stabilized. On April 10, sUSD fell to a five-year low of $0.83, according to CoinGecko
SUSD is a crypto-backed stablecoin. Users lock up SNX tokens to mint sUSD, making its stability highly dependent on the market value of SNX. As the sUSD token fell to $0.91 on April 1, Rob Schmitt, co-founder of risk tokenization platform Cork Protocol, explained the stablecoin’s potential “death spiral scenario.” He said the stablecoin’s design is similar to Terra’s TerraUSD (UST), which crashed in 2022. He also noted key differences in collateral and debt management, but the fundamental risk remains.
Synthetix founder Kain Warwick previously responded to the downturns, saying that while he’s been worried about a death spiral for the past seven years, he’s not worried about it now. The Synthetix founder added that since sUSD is a pure crypto-backed stablecoin, the peg can drift. He noted that there are mechanisms in place that bounce it back if it goes above or below its peg. These mechanisms, he said, are what’s causing the drift.
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