Thanks for your response @kaleb. While sUSD is highly overcollateralized and the soft peg mechanism via cheap debt repayments is sound, the current state of spot synth deprecation can lead to short-term price depegs. This occurs when users perform redemption-then-dump actions, exacerbating the depeg through liquidations due to minimal liquidity. Given the current distribution of external spot synth assets in circulation and the current (decreasing) discount rate of 60%, we can potentially expect an uptick in large withdrawals over the next few weeks.
Additionally, the asset being listed and primarily utilized through e-mode intensifies this issue. Increasing the liquidation bonus is a sound strategy, but it results in more debt needing to be paid off to restore an account to a healthy state, since this bonus is taken from the collateral itself. Given the state of sUSD on-chain liquidity during a depeg, this could potentially worsen the price depegging. As a result, we would like to see an increase in sUSD on-chain liquidity and a monitor the decrease in the circulating supply of other spot synth assets as they are redeemed, before moving forward with a potential relisting.