Synthetix Aims To Fix Staking And Revive The Stablecoin

Anna Martynova

Kain WARWICK, founder of Synthetix, says SNX staking is broken, and the solution is a leveraged, no-liquidation staking model that absorbs debt and scales yield. 420 Pool , a new staking model where SNX holders stake their tokens, allowing the protocol to centrally manage debt and seek yield opportunities.

At launch, the primary source of yield will be minting sUSDe via Ethena, with future integrations expected. Synthetix’s old model had a scaling problem, and Warwick presents this as a necessary evolution. Perhaps the most radical aspect of this plan is a “debt jubilee,” which forgives historical sUSD debt over 12 months. Synthetix debt stake holders have the option to deposit into 420 Pool and have the protocol absorb their debt. Re-entry could boost SNX staking participation as users who previously avoided the complexity of debt management now have a “clean slate” to stake.

420 Pool is either a brilliant evolution or another over-engineered Synthetix experiment. The bet is that the market wants leveraged yield without the risk of liquidation. If Synthetix is right, this is the most sophisticated DeFi staking product to date. If it’s not, it will be another chapter in SNX’s long history of redesigns.

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