Synthetix governance moves towards decommissioning sUSD and proposes to repay all holders with vested interest at face value $SNX According to CoinGecko and DefiLlama, the stablecoin is currently trading at around $0.25 against its $1.00 target.
Synthetix founder Kain Warwick and core contributor Benjamin Celermajer created this proposal. Under SIP-423, sUSD contracts will be frozen and abolished. Each eligible sUSD holder will receive four. $SNX Tokens per sUSD, upon conversion worth $SNX $0.25, sUSD is the planned face value of $1.00. of $SNX The token has a one-year lock, followed by a one-year linear vest from the freeze date. The billing period opens approximately one year after the freeze.
4 components
SIP-423 consists of four parts. First, a snapshot of the holders. Audit of all sUSD balances in Ethereum and Optimism at governance defined cutoff blocks. Next is the abolition of sUSD itself. Third, restructuring of existing debt jubilee under SIP-420. This will close the 420 pool, remove the sUSD staking ratio requirement, and give existing debt participants a four-year lock with one year of vesting, or the option of early exit by repaying their remaining debt in full. The fourth component is $SNX Staking reform is postponed to another build.
contingent $USDT Pass included: If Synthetix generates more than $10 million in protocol revenue within the two-year lockup period, 25% of that revenue can be divided as follows: $USDT For traditional sUSD holders who prefer cash to cash $SNX. Both the $10 million threshold and the 25% percentage can be adjusted by the Spartan Council via the SCCP.
Vote pending
SIP-423 held Vote_Pending status at the time of publication. A related proposal, SIP-424, covering the technical implementation of mitigation has not yet been published.
SIP notes that sUSD held in LP pools, vaults, or other deposit agreements cannot be automatically reclaimed. These cases are handled through a separate Treasury Department claims process. The core team members and the protocol itself hold important positions in sUSD.
depeg
The sUSD peg is rapidly eroding. SIP’s summary states that the token is “trading below the peg” and Jubilee participants face “escalating sUSD staking requirements,” both of which continue to hinder the Synthetix exchange’s growth. According to CoinGecko, sUSD has fallen about 28% in the past seven days and about 61% in the past 30 days.
According to DefiLlama, Synthetix has approximately $17.5 million of sUSD in circulation across Ethereum and Optimism. $SNX According to CoinGecko, it is trading around $0.2453, just below the $0.25 conversion floor set by SIP-423. According to DefiLlama, the total value of locked protocols is $32.5 million.
Synthetix has previously attempted to stabilize sUSD. As of March 2026, the protocol was still extending sUSD rewards on Infinex to support pegging. A January 2026 interview with Warwick in The Defiant featured his advocacy for restructuring the debt model. SIP-423 is a structural outcome of that direction. Synthetix launched a perpetual DEX on Ethereum mainnet in December 2025, signaling a shift to exchange-driven revenue rather than sUSD issuance.
SIP-423 is Synthetix’s first proposal to shrink rather than repair sUSD.
