sUSD, Synthetix's stablecoin, is undergoing a crucial phase in preparation for its V3 release, aimed at enhancing decentralization and upgradability.

The previous V2x mechanism incentivized participation through SNX token minting but differed significantly from the current version. It introduced actual yield distribution, a buyback and burn system, and measures to prevent SNX circulation.

Under the V2x mechanism, sUSD will be backed by various collateral assets like SNX and ETH. Additionally, Synthetix V3 streamlines LPing with its Synthetix Perps and spot markets structure.

The transition of SNX and sUSD from the V2 mechanism to the new framework is imminent, facilitated by various methods including enhanced OP incentives for sUSD liquidity on Velodrome and SNX incentives for sUSD liquidity on Curve.

The migration to Synthetix V3 will occur in two stages: first, the Ethereum mainnet migration, allowing SNX stakers to transition to V3, followed by the Optimism migration, extending Synthetix V3 to Optimism SNX stakers. SIP-306 outlines a transparent infrastructure for SNX and sUSD migrations.

As the Synthetix V3 migration progresses towards completion, the focus shifts to establishing an upgradable, decentralized ecosystem bolstered by offshoot protocols for Synthetix liquidity and framework. The V3 migration represents a pivotal advancement in realizing this goal, fostering an ecosystem inclusive of developers, traders, and liquidity providers for on-chain upgrades.