Key notes
- The co-founder of the Cork protocol, Rob Schmitt, warned against a “spiral scenario of death” potential for SUSD, establishing parallels with the collapse of Terrausd in 2022.
- Schmitt highlighted the differences in cash reserves of $ 30 million in synthetix, which could alleviate risks during a deleveraging event.
- The founder of Synthetix, Kain Warwick, recognized instability, citing the removal of a key engine behind the SUSD request.
Synthetix USD (SUSD), the native stablecoin of the Synthetix protocol lost its USD-PEG, falling to a lower than $ 0.83 and leaving investors worried about what is happening. Since the beginning of 2025, the asset has experienced enormous instability and some market analysts have thought it could see a collapse like Terra UST.
On January 1, SUSD had a drop to $ 0.96, only recovering slightly to $ 0.99 in early February. Throughout February, prices remained volatile before reaching stability in March. However, on April 10, SUSD plunged to a lower over five years of $ 0.83, marking a significant drop.
As we know, Susd is a crypto-collateralized stablecoin in which users lock the synthetix tokens (SNX) to experience Susd, while making its stability very dependent on the market value of SNX.
Risks of the death of Synthetix Stablecoin (SUSD) increases in a spiral
On April 1, when the Susd token fell to $ 0.91, Rob Schmitt, co-founder of the Cork Protocol risk tokenization platform, described the potential risks of a “spiral scenario of death” for Stablecoin.
Schmitt also stressed that the design of Susd shares notable similarities with Terrausd Terrausd (UST), which was faced with a brutal collapse in 2022. Although it recognized the main differences in guarantee and debt management, Schmitt warned that the fundamental risks underlying such a model of respect.
SUDD, the algorithmic stablecoin that underlies the @Synthetix_io The markets, supported by SNX, are experiencing a significant and sustained Depeg. Why did he depeg and is it the beginning of a death spiral or will he be Repeg? Let’s dive!
What is above?
To understand SUSD, we must first … pic.twitter.com/gq4q7sx904– Robdog 🍾 (@Robdogeth) April 1, 2025
However, despite his concern, Schmitt said that a Terra’s collapse is a bit improbable due to the huge Synthetix Treasury of $ 30 million, which holds almost half of the above -mentioned debt. In the case of a relaxation scenario, these reservations can enter the image. Note that this is not the first time that SUSD has denigrated, because it fell to $ 0.92 in 2024.
The founder of Synthetix, Kain Warwick, had previously discussed the DIP, attributing them to the removal of the main driver behind the purchase of SUSD. “New mechanisms are introduced, but in this transition, there will be a certain volatility,” wrote Warwick.
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Bhushan is a fintech enthusiast and has a good flair in understanding the financial markets. Its interest in the economy and finance draws its attention to the new technology of emerging blockchain and the markets of cryptocurrencies. He is permanently in a learning process and motivates himself to share his acquired knowledge. In free time, he reads fiction novels to thriller and sometimes explores his culinary skills.
