Synthetix is calling for increased participation in its 420 Pool incentive program to help stabilize the ongoing depegging of its sUSD stablecoin. The protocol’s recent SIP-420 update, aimed at enhancing capital efficiency, inadvertently led to an oversupply of sUSD due to reduced collateralization requirements and a shift to shared staking. This has caused the stablecoin to trade significantly below its $1 peg, currently sitting at $0.7714 after weeks of depegging woes. Synthetix founder Kain Warwick urges SNX stakers to contribute directly by locking their sUSD for 12 months in exchange for shares of 5 million SNX tokens. While this method is currently inconvenient, a user interface is anticipated soon to alleviate the process. However, if voluntary participation doesn’t improve, Warwick hints at potentially implementing more forceful measures like enforcement mechanisms to ensure stability. He notes that sufficient capital exists within the ecosystem to address the depeg. 420 Pool incentivizes SNX holders to lock sUSD for 12 months in exchange for a portion of 5 million SNX tokens, encouraging action to restore stability. This latest initiative comes as a recent protocol update, SIP-420, aimed at improving capital efficiency inadvertently triggered the depeg crisis. The changes lowered collateralization requirements and shifted to a shared pool model, contributing to an oversupply of sUSD that hasn’t matched demand. This has led to downward pressure on the peg. Notably, similar events have been observed with USDC and TUSD in times of market volatility. Unlike fiat-backed stablecoins, sUSD is dependent on SNX collateral and price feeds from Chainlink oracles, making it more susceptible to internal changes that can lead to instability.