b2b-daily
Home | FinTech | Fintech Blockchain

How Did Synthetix’s sUSD Stablecoin Lose Its Peg?

Avatar photo
by Daisy Brown
May 20, 2024
How Did Synthetix’s sUSD Stablecoin Lose Its Peg?

The decentralized finance (DeFi) landscape was rattled when Synthetix’s sUSD stablecoin experienced a substantial depegging event. Originally designed to maintain a 1:1 value with the US dollar, sUSD shockingly fell to $0.92. This devaluation incident exposed the fragile nature of stablecoin pegs, particularly in the face of substantial market movements.

The catalyst for this destabilization was traced back to a large liquidity provider’s exit from the sBTC/wBTC pool on the Curve exchange. A swift liquidation of their sUSD assets contributed significantly to the downward pressure on sUSD’s price. As the market tried to absorb the sudden surge in available sUSD, its value dipped below the intended peg, showcasing the delicate balance that underpins the liquidity in decentralized markets.

Underlying Liquidity Vulnerabilities

Liquidity troubles escalated within the DeFi sector when Synthetix activated SIP-2059 in late April, phasing out non-sUSD synths on Ethereum. This prompted a scramble to exchange other synths for sUSD, exacerbating the stablecoin’s instability. Meanwhile, Chaos Labs urged Aave to halt sUSD activities on its V3 Optimism platform, highlighting the challenges of maintaining liquidity in a market that prizes stability.

Stablecoin stress isn’t new, USDC also faced devaluation during the March 2023 banking crisis. But for sUSD, the repercussions were harsher, bringing back memories of the May 2022 Terra UST disaster, underlining the DeFi sector’s inherent volatility and risk. The recent sUSD issue is a stark reminder for the DeFi community to re-evaluate and strengthen the systems supporting stablecoin durability in the volatile crypto landscape.

Blockchain TechnologyCryptoInformation Security

Explore more

Why Corporate Wellness Programs Fail to Fix Workplace Stress
February 26, 2026

The modern professional often finds that for every dollar spent on a meditation app by their employer, nearly one hundred and fifty dollars are drained from the global economy due to systemic burnout and disengagement. This economic disparity highlights a growing tension between the wellness industry, which has grown into a juggernaut worth sixty billion dollars, and the eight point

How to Fix the Workplace Communication and Feedback Crisis
February 26, 2026

The silent erosion of professional morale often begins not with a grand failure of strategy but with the subtle, persistent friction caused by poorly articulated managerial guidance. This disconnect between managerial intent and employee performance represents a significant hurdle for modern organizations, as traditional critique methods frequently lead to burnout rather than improvement. Addressing the central challenge of workplace communication

How Can You Close the Feedback Gap to Retain Top Talent?
February 26, 2026

When elite professionals choose to resign, the departure frequently stems from a prolonged absence of meaningful dialogue regarding their trajectory within the organization and the specific expectations surrounding their professional contributions. This silence creates a vacuum where uncertainty flourishes, eventually pushing high achievers toward the exit. Research indicates that nearly half of all employees who voluntarily leave their roles cite

Can AI Infrastructure Redefine Wealth Management?
February 26, 2026

The once-revolutionary promise of digital wealth management has hit a ceiling where simply layering more software atop crumbling legacy systems no longer yields a competitive edge for modern firms. This realization has sparked a fundamental shift in how the industry approaches technology. Instead of pursuing cosmetic updates, firms are now looking at the very bones of their operations to find

Family Office Models Reshape Korean Wealth Management
February 26, 2026

The skyline of Seoul no longer just represents industrial might but also signals a historic accumulation of private capital that is forcing the nation’s most prestigious financial institutions to rewrite their playbooks entirely. The traditional private banking model, once centered on the 1-billion-won investor, is undergoing a radical metamorphosis. As of 2026, a burgeoning class of ultra-wealthy households has redefined