Kain, the founder of Synthetix, has published a detailed article about readjusting incentives and restoring sUSD's peg to 1 USD. When SNX dropped below 1 USD at the end of 2024, a "debt relief" plan was implemented to focus on sUSD's historical debt in Pool 420. This prevented a liquidation crisis but destroyed sUSD's pegging mechanism. To restore sUSD to 1 USD, incentives need to be reintroduced.
Positive incentives include pledging sUSD to receive SNX inflation rewards. Negative incentives require pledgers to submit a certain sUSD ratio. If requirements are not met, debt relief will be suspended, and the ratio will increase when the peg deviates. In parallel, the staking model will be optimized, integrating SNX staking by pool. A new Pool 420 will be created to accept new collateral assets, expanding sUSD supply without liquidation risks.
Initially, USDC will be introduced, potentially expanding to other DeFi Tokens. When incentives are readjusted and the peg is restored, four coordinated actions will be taken: the old v2/v2x system will be eliminated; Perps V4 will launch on Ethereum mainnet, supporting multi-asset collateral; snaxChain will start its own on-chain Superchain application, with perpetual and options markets; an additional 170 million SNX will be issued, raising the total supply to 500 million, with new Tokens deployed on snaxChain to encourage participation.
