sUSD was previously known as nUSD and is issued by the Havven Foundation. It will be created directly in the issuers wallet and fees will be paid proportionally according to the number of nominations each user publishes, aimed at enhancing liquidity. The stability of sUSD is maintained through direct market intervention by the foundation.

Project Introduction

Synthetix is a decentralized protocol for issuing synthetic assets on Ethereum. These synthetic assets, known as Synths, are collateralized by the Synthetix Network Token (SNX). By locking SNX into smart contracts, users can mint these Synths. The collateral pool model allows users to execute conversions between Synths directly via smart contracts without needing counterparties.

sUSD Peg

The sUSD peg is crucial for a well-functioning system because traders need liquidity and stability between sUSD and other crypto assets to profit from trades. sUSD trades on open markets, so it may trade below its parity with the US dollar. Incentives are necessary to ensure minimal deviations in the pegged price while motivating SNX holders to correct price discrepancies through arbitrage.

The primary mechanism for maintaining the sUSD peg involves SNX stakers creating debt and selling the Synths they mint. They then repurchase and destroy sUSD at a discount to its face value to reduce their debt, achieving arbitrage. Other methods include increasing the collateral ratio to reduce the supply of Synths to meet demand. For cases where the sUSD peg is not maintained, liquidation is another option. These solutions can only be implemented after community debate through our SIP process, which will be discussed later.

Current Synths

There are currently four categories of Synths available: fiat currencies, commodities, cryptocurrencies, and inverse cryptocurrencies. Our fiat currency Synths include sUSD, sEUR, sKRW, and others.