420 Pool FAQ

What is the 420 Pool?

The 420 Pool has been designed to make staking simple. SNX holders are able to stake in this new pool to earn their pro-rata share of yield and/or assets it generates. There is no debt management, no c-ratio, no liquidations - just stake and start earning.

How does the 420 Pool earn yield?

The 420 pool will be able to mint sUSD against SNX deposited in the pool at a 200% c-ratio. With this sUSD, the protocol will seek yield opportunities across venues such as Ethena, Aave, Maker, Berachain boyco vaults, etc.

What will be done with the yield?

Protocol earned yield will be returned to the pool and used to compound returns, distribute to stakers or to buy back SNX.

Who owns the yield?

SNX stakers! Stakers will have a pro-rata claim on excess yield generated by the pool, be it excess stablecoins or SNX from buy backs - i.e. if you own 1% of the SNX staked in the 420 Pool, you’ll have a claim on 1% of the yield generated.

When will the yield be distributed?

The yield will be distributed pro-rata to stakers periodically. The frequency of these distributions has not been determined yet.

Are you locked in the pool?

There is a 7 day cooldown to exit the pool - i.e. 7 days after a user unstakes, they will be able to claim their SNX from the pool.

What is the debt jubilee?

Historically SNX holders have been able to mint sUSD against their SNX holdings. This has led to the presence of bad debtors, under-utilised sUSD, value leakage from the Synthetix system and death spiral concerns. To overcome all of these, the introduction of the 420 pool will coincide with the eventual depreciation of solo-staking. To eliminate the risks of solo-staking, SNX staker debt will be forgiven over a 12 month period from the time a user enters the 420 Pool.

Debt will be forgiven linearly (i.e. 50% after 6 months), but there will be early exit penalties which will result in a reduction of debt relief.

Can I leave during the debt jubilee period?

You can exit the pool anytime you want during the debt jubilee, but you’ll have to pay back the entirety of your debt less relief (incl. Early exit penalty) before you can withdraw anything.

What is the early exit penalty?

Stakers that leave the 420 pool before the 12 months debt jubilee ends will incur a penalty that will reduce the amount of debt they have been relieved.

The penalty will start at 100% on the first day a staker enters the pool and linearly reduce to 50% on the last day of the 12 month lock.

What if I don’t have any debt?

There will be an opportunity for you to enter the 420 pool and receive an SNX incentive in the coming weeks! Hold tight for now as there is a much better opportunity for you to enter the pool soon.

When can I enter the pool?

Anytime! Early depositors will benefit from incentives that may be removed in the future (e.g. debt jubilee), but you can join anytime your heart desires.

Can I be liquidated in the 420 Pool?

No - sleep well knowing your SNX is safe from liquidation!