The DeFi space is heating up — and not in a good way. Synthetix founder Kain Warwick has had enough with SNX stakers dragging their feet and is now threatening to ditch the "carrot" in favor of the "stick" to fix the stubborn sUSD depeg.
On April 21, Warwick took to X (formerly Twitter) to announce a new sUSD staking mechanism aimed at restoring stability to the crypto-backed stablecoin. The catch? It’s clunky and lacks a user-friendly interface — for now. But once the UI goes live, he’s making it clear: participate, or face pressure.
> “This is very solvable… We tried nothing, which didn’t work. Now we’ve tried the carrot — it kind of worked. But if you think you’ll get away without eating it, I’ve got bad news for you,” Warwick warned.
The sUSD 420 Pool, launched on April 18, is at the heart of this strategy. It's offering stakers a share of 5 million SNX tokens if they lock their sUSD for a year. Sounds generous, right? But the uptake has been sluggish, and Warwick isn’t shy about turning up the heat if things don’t change fast.
sUSD, a stablecoin backed by SNX, has been anything but stable lately. It crashed to $0.68 on April 18, nearly 31% below its $1 peg, and is currently trading around $0.77. The issue, according to Synthetix reps, stems from structural shifts introduced in SIP-420 — a major protocol update that shifted debt risks from stakers to the system itself.
> “The collective net worth of SNX stakers is in the billions — the money is there. We just need to align the incentives,” Warwick added optimistically.
And he’s not wrong. Other stablecoins like USDC and TUSD have faced similar turbulence and bounced back. With the stablecoin market topping $200 billion and trading volumes exceeding even Visa and Mastercard, the pressure is on to make sUSD stable again — and fast.
The message from Synthetix HQ is clear: Get on board, or get left behind.