The stability of Synthetix’s stablecoin, sUSD, has been jeopardized. Recent developments have seen sUSD plummet below the $0.80 mark. The cause? Significant protocol changes have led to an oversupply of sUSD, disrupting its traditional peg. The SIP-420 upgrade, aimed at capital efficiency, has contributed to this chaotic trading environment. As SIP-420 flooded the market with excess sUSD, investors confronted unexpected volatility. Understanding these dynamics is crucial for navigating the evolving landscape of stablecoins and their associated risks. Synthetix will need to implement strategies to restore confidence and stabilize sUSD moving forward.