Kain Warwick, the founder of the decentralized finance protocol Synthetix, has publicly acknowledged that the project's stablecoin sUSD has been trading below its dollar peg for more than a year. In a candid thread posted over the weekend, Warwick took personal responsibility for what he described as treasury mismanagement and laid out a plan to wind down the current SNX-backed stablecoin and replace it with a new design centered on a basis vault.
A year-long depeg and its fallout
SUSD, which is supposed to be pegged 1:1 to the U.S. dollar, has struggled to maintain that value since early 2023. The stablecoin relies on collateral from the native SNX token, but repeated price swings in SNX and inefficiencies in the minting and redemption process have kept sUSD trading at a discount. On-chain data shows sUSD has consistently traded between $0.95 and $0.98 on major decentralized exchanges.
The depeg has frustrated users and liquidity providers. Some have pulled capital from Synthetix's liquidity pools, while others have called for a more sustainable design. Warwick's admission marks the first time the protocol's leadership has directly linked the problem to treasury decisions rather than external market conditions.
Warwick's mea culpa
“I’ve made mistakes managing the treasury, and I take full responsibility for the state we’re in,” Warwick wrote in the thread. He did not offer specifics on which decisions went wrong, but acknowledged that the treasury had not responded quickly enough to changing market dynamics that weakened sUSD’s peg.
Warwick's personal accountability is rare in crypto, where founders often blame broader market forces or regulatory uncertainty. The thread was met with a mix of support and skepticism from the Synthetix community. Some praised the transparency; others questioned why it took more than a year to address the issue publicly.
What comes next: winding down sUSD
The plan Warwick outlined involves phasing out the existing SNX-collateralized sUSD model. Instead, Synthetix will introduce a so-called basis vault — a mechanism that uses funding rates from perpetual futures markets to back a new stablecoin. The idea, Warwick explained, is to create a more robust peg that doesn't rely solely on the performance of one volatile asset like SNX.
“We’re going to wind down the current sUSD system and replace it with a basis-vault design that should be much more resilient,” he wrote. No timeline for the transition has been released, but Warwick said technical work has already begun.
The shift represents a major strategic pivot for Synthetix, which has long promoted sUSD as a core building block for its derivatives trading platform. The protocol will need to maintain liquidity and user trust during the transition — no small task given the competitive landscape for decentralized stablecoins.
Unresolved questions
How the basis vault will be funded and whether existing SNX holders will face dilution remain open questions. Warwick did not provide details on the new stablecoin's collateral ratio or how the protocol will handle the outstanding sUSD supply, which stands at roughly $45 million.
The Synthetix community is expected to vote on the proposal in the coming weeks. Until then, sUSD continues to trade below a dollar, and the project's treasury faces scrutiny from users who want to see a concrete recovery plan — not just promises.
