I'm not sure how else to put this...

$SNX is undervalued

Right now the c-ratio is 750%, so if you're staking SNX and minting sUSD then you only get ~12% of your capital to use to chase DeFi yield.

Right now the iETH pool offers 90% yield. However by participating you're short ETH, so you must hedge by also being long ETH.

Your 12% of capital is now split in half so that 90% yield is less attractive than it first appeared.

Naturally any rational investor would decide to forgo staking SNX and instead acquire the sUSD directly. Now they are receiving 90% yield on half of their capital (the other half is hedged long ETH).

The BIG deal is that this creates demand for sUSD which threatens the sUSD peg. People are willing to pay a premium for sUSD bc there isn't enough.

One simple solution is to lower the c-ratio which means that SNX stakers can mint more sUSD and create more supply. @Arthur_0x

When the c-ratio is lowered the value of SNX should inherently be higher bc it results in SNX stakers being able to chase yield with more than 12% of their staked SNX position.

Their ability to earn is effectively higher.

SNX is simply the most reflexive asset of all time...