🔴 sUSD from Synthetix has lost its peg and has fallen to $0.66 — déjà vu with Terra?

sUSD, the stablecoin from Synthetix, is again below $1 — the current price is around $0.66. The reason? The protocol update SIP-420, which unexpectedly changed the financial mechanics of the project.

📉 What happened:

— The collateralization ratio was reduced from 450% to 200%

— Old debts do not have to be repaid for a whole year

— Stakers are no longer incentivized to buy back sUSD

— The price of SNX has dropped → collateral decreased

— Market panic is creating cascading sell-offs

⚠️ Reminds of the collapse of Terra/LUNA — and again the problem lies in the mechanics of collateral and trust.

💭 The million-dollar question: can we trust decentralized stablecoins without a hard tie to reserves?

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