Rebuilding sUSD
A new path for Synthetix's stablecoin
sUSD is the synthetic asset that powers trading, liquidity in the Synthetix ecosystem. sUSD launched in 2018 as eUSD and later migrated to nUSD. During the transition to Synthetix, it was rebranded to sUSD. It is one of the longest-running stablecoins in crypto, and has now survived three full market cycles.
In 2025, Synthetix redesigned the protocol, changing the core staking mechanism, winding down L2 operations, launching a Perp dex on Ethereum Mainnet, and redesigning governance. sUSD remains a critical component of Synthetix; its role and evolution will be outlined in this blog post.
Our promise: As Synthetix enters its Mainnet era, sUSD will remain the foundational stablecoin of the Synthetix ecosystem.
The Decision That Saved the Protocol
During Synthetix’s redesign, the minting of sUSD against SNX was deprecated. This was a critically important decision that enabled the protocol to survive and rebuild.
sUSD minting led to complex debt management, debt holes in the ecosystem, and unnecessary protocol overhead.
While this change protected the protocol's long-term health, it ushered in a challenging transition year. Maintaining the peg proved more difficult than anticipated as we redesigned and strengthened Synthetix.
The Turning Point: Perps on Ethereum Mainnet
This investment and rebuilding phase is now beginning to pay off. With the successful launch of Synthetix Perps on Ethereum Mainnet, we are now well-positioned to ensure sUSD reestablishes itself not just within Synthetix but as a widely utilized stablecoin across the broader Ethereum ecosystem.
sUSD powering Synthetix perps: sUSD is the asset behind the Synthetix Liquidity Provider Vault (SLP): the community market-making vault of Synthetix Perps. SLP is the enshrined liquidator, liquidity provider, and collateral manager of Synthetix Perps. The value proposition of such an enshrined vault has been demonstrated by both HLP and LLP, and the addition of multi-collateral management can boost SLP returns.
sUSD as the mintable assets of vaults: In order to establish sUSD as a viable stablecoin across DeFi, the supply must grow, and TVL must be captured. sUSD will be mintable against delta-neutral basis trade vaults on Synthetix. As the operator of both a stablecoin and a Perp dex, Synthetix is uniquely positioned to design and manage meta-vaults that generate yield for depositors and issue a stable representation of the vault’s strategy.
Mechanisms Driving sUSD Stability and Demand
In 2026, several powerful drivers will drive demand and support price stability for sUSD:
- sUSD Buybacks from Exchange Fees
A portion of fees generated from Synthetix exchange activity will be directed toward sUSD buybacks, helping anchor the peg. - SLP Vault: Community Market Making & Liquidations
sUSD will serve as the primary deposit asset for the SLP Vault: the exchange's community-owned market-making and liquidation vault. Currently in private beta to refine strategies, we expect SLP to become a source of demand for sUSD once widely available. - Building Ongoing Stability
We estimate that approximately $5 million in strategic support (through buybacks, vault incentives, and liquidity provisioning) will be sufficient to reestablish robust, long-term stability for sUSD. Restoring stability will help reestablish sUSD as a desirable collateral and composable asset across DeFi.
Coming Soon: Basis Trade Vaults Powered by Synthetix Perps
To further accelerate adoption and yield opportunities, we are preparing to launch a meta-basis vault powered by Synthetix Perps. This opportunity is unique to Synthetix, as both the issuer of a stablecoin and the operator of a Perps protocol.
Depositors will mint sUSD against their position in a delta-neutral basis trade strategy. This approach collateralizes sUSD with delta-neutral positions. These vaults will capture funding rate yields and basis opportunities with minimal directional exposure.
sUSD holders in these vaults will earn yields from the SNX meta-basis trade vault, a sophisticated strategy optimized to capture the highest-yielding basis trade opportunities on Synthetix Perps.
This mechanism creates a powerful, self-reinforcing loop: higher yields attract more deposits → increased collateralization strengthens the peg → further reinforcing sUSD's long-term resilience and utility.
Protecting the Peg
To give Synthetix Perps the best chance to succeed, it is critically important that the peg is restored in a timely manner. sUSD has depegged for months at a time over the last year, but reestablishing the peg is critical for the relaunch of the Protocol.
SNX stakers are responsible for the health of the sUSD peg. The debt jubilee was designed to alleviate the overhang from years of debt management and debt inflation as we transitioned to a new staking model. However, with sUSD trading below $0.70, it is critical to adjust the 420 pool parameters to help restore the peg.
We’re raising the sUSD staking requirement to 50% of the outstanding debt jubilee. In addition, there will be progressive increases of 10% every 2 weeks until the staking requirement is either 100% or sUSD is above $0.98.
Beginning to restore the peg will increase the likelihood that the longer-term solutions to peg stability mentioned above succeed. This is not a one-way door - once these solutions are implemented and start to take effect (i.e., stabilize peg pressures), reductions to the sUSD staking requirement will be considered.
Given this change, stakers will also be able to early exit the pool (previously, early exit carried a 50-100% penalty) by electing to burn 35% of their debt (sUSD) and receive 65% debt relief, plus unlocked SNX, in return. This option is only available to stakers who have reached the 65% jubilee threshold (i.e., they have staked long enough to qualify for 65% debt relief through the jubilee mechanism). Stakers who have not yet reached the 65% jubilee can access this burn option once they achieve it.
These changes prioritize sUSD peg stability and protocol health above all else, setting the stage for sustainable recovery for both sUSD and SNX.
Looking Forward
Coming out of 2025’s transitional year, sUSD is no longer languishing as a forgotten part of the Synthetix ecosystem - it will evolve into a stronger, more integrated component of the modern Synthetix Protocol.
With Perps live on Mainnet, buybacks in motion, high-yield community vaults, and exciting new basis trade products on the horizon, the foundation is set for sUSD to reemerge as the premier decentralized stablecoin.
With these changes, we expect sUSD to re-peg by early Q2 and achieve sustained stability by mid-2026.
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