Synthetix governance decided on June 23 to gradually retire sUSD based on the SIP-423 proposal, paying holders locked SNX at a ratio of 4 SNX for every 1 sUSD, converted. The proposal was put forward by Synthetix founder Kain Warwick and core contributor Benjamin Celermajer.
Components of SIP-423: Holder snapshot, sUSD delisting, SIP-420 debt restructuring, SNX staking reform
Under the SIP-423 proposal, the full plan consists of the following four parts:
Holder snapshot: audit all sUSD balances on Ethereum and Optimism at the cutoff block defined for governance
sUSD delisting: freeze and retire the sUSD contracts; eligible holders receive 4 SNX (locked for one year; thereafter linearly unlock over one year from the freeze date; the claiming window opens about one year after freezing)
SIP-420 debt restructuring: close the 420 funding pool and remove the sUSD staking ratio requirement; existing debt participants can choose to lock for four years (unlock after one year) or repay the remaining debt in full to exit early
SNX staking reform: to be implemented in a separate version
sUSD down 61% over the past 30 days, TVL $32.5 million
According to data from CoinGecko and DefiLlama, as of the time of reporting:
· sUSD trading price is about $0.25 (target $1.00); down about 28% over the past 7 days and about 61% over the past 30 days;
· Synthetix TVL is $32.5 million; sUSD circulating supply on Ethereum and Optimism is about $17.5 million;
· SNX trading price is about $0.2453, slightly below the $0.25 conversion floor of SIP-423.
SIP notes that sUSD held in LP funding pools, the treasury, or other deposit contracts cannot be automatically reclaimed, and would require the Treasury to handle separately through a claims process.
SIP-423 is in “Vote_Pending”; SIP-424 technical implementation plan has not been released
As of The Defiant’s June 23, 2026 reporting, SIP-423 is in “Vote_Pending” status and has not yet entered the formal voting execution stage. The accompanying technical proposal SIP-424 (covering a phased technical implementation plan) has not been released.
In addition, SIP-423 includes a USDT return route: if Synthetix’s agreed revenue exceeds $10 million during the two-year lockup period, 25% can be distributed in USDT to sUSD holders who prefer cash rather than SNX; both the $10 million threshold and the 25% return ratio can be adjusted by the Spartan Council via SCCP.
FAQ
How is the 1 sUSD to 4 SNX ratio calculated?
According to the SIP-423 proposal description, the conversion logic is: sUSD face value is $1.00, and the conversion floor set for SNX in the proposal is $0.25; therefore 1 sUSD face value corresponds to 4 SNX ($1.00 ÷ $0.25 = 4). This means that even if sUSD’s current market price is far below $1, holders still receive SNX compensation based on the $1 face value.
How are sUSD holdings handled when they are in DeFi protocols (such as LP pools or the treasury)?
According to SIP-423’s description, sUSD held in LP funding pools, the treasury, or other deposit contracts cannot be automatically reclaimed; these cases need to be handled via a separate claims process by Synthetix’s Treasury. The proposal does not provide a specific timetable or detailed mechanism for this process.
What is the current legal effect status of SIP-423?
As of The Defiant’s June 23, 2026 reporting, SIP-423 is in “Vote_Pending” status and has not been formally executed. Its accompanying technical implementation proposal SIP-424 has also not been released. SIP-423 becomes effective only after passing the governance voting process of Synthetix; the specific timeline was not determined at the time of reporting.
