diff --git a/src/dune/string_with_vars.ml b/src/dune/string_with_vars.ml
index 8826bf89b07..7993f944394 100644
--- a/src/dune/string_with_vars.ml
+++ b/src/dune/string_with_vars.ml
@@ -23,7 +23,7 @@ let make template = { template; syntax_version = make_syntax }
 let make_text ?(quoted = false) loc s = make { parts = [ Text s ]; quoted; loc }
 
 let make_var ?(quoted = false) loc ?payload name =
-  let var = { loc; name; payload; syntax = Percent } in
+  let var = { loc; name; payload } in
   make { parts = [ Var var ]; quoted; loc }
 
 let literal ~quoted ~loc s = { parts = [ Text s ]; quoted; loc }
@@ -52,10 +52,7 @@ let virt_var ?(quoted = false) pos s =
       | _ -> true) );
   let loc = Loc.of_pos pos in
   let template =
-    { parts = [ Var { payload = None; name = s; syntax = Percent; loc } ]
-    ; loc
-    ; quoted
-    }
+    { parts = [ Var { payload = None; name = s; loc } ]; loc; quoted }
   in
   { template; syntax_version = make_syntax }
 
@@ -315,18 +312,13 @@ module Make (A : Applicative_intf.S1) = struct
       partial_expand t ~mode ~dir ~f:(fun var syntax_version ->
           let+ exp = f var syntax_version in
           match exp with
-          | None -> (
-            match var.syntax with
-            | Percent ->
-              if Var.is_macro var then
-                User_error.raise ~loc:var.loc
-                  [ Pp.textf "Unknown macro %s" (Var.describe var) ]
-              else
-                User_error.raise ~loc:var.loc
-                  [ Pp.textf "Unknown variable %S" (Var.name var) ]
-            | Dollar_brace
-            | Dollar_paren ->
-              Some [ Value.String (string_of_var var) ] )
+          | None ->
+            if Var.is_macro var then
+              User_error.raise ~loc:var.loc
+                [ Pp.textf "Unknown macro %s" (Var.describe var) ]
+            else
+              User_error.raise ~loc:var.loc
+                [ Pp.textf "Unknown variable %S" (Var.name var) ]
           | s -> s)
     in
     match exp with
diff --git a/src/dune_lang/lexer.mll b/src/dune_lang/lexer.mll
index 77da5d8125c..24de3715df6 100644
--- a/src/dune_lang/lexer.mll
+++ b/src/dune_lang/lexer.mll
@@ -369,7 +369,6 @@ and template_variable = parse
             }
         ; name
         ; payload
-        ; syntax = Percent
         }
   }
   | '}' | eof
diff --git a/src/dune_lang/template.ml b/src/dune_lang/template.ml
index c0ff093a203..dd8c524e300 100644
--- a/src/dune_lang/template.ml
+++ b/src/dune_lang/template.ml
@@ -1,15 +1,9 @@
 open! Stdune
 
-type var_syntax =
-  | Dollar_brace
-  | Dollar_paren
-  | Percent
-
 type var =
   { loc : Loc.t
   ; name : string
   ; payload : string option
-  ; syntax : var_syntax
   }
 
 type part =
@@ -22,24 +16,10 @@ type t =
   ; loc : Loc.t
   }
 
-let compare_var_syntax x y =
-  match (x, y) with
-  | Percent, Percent
-  | Dollar_brace, Dollar_brace
-  | Dollar_paren, Dollar_paren ->
-    Ordering.Eq
-  | Percent, (Dollar_brace | Dollar_paren) -> Ordering.Lt
-  | (Dollar_brace | Dollar_paren), Percent -> Ordering.Gt
-  | Dollar_brace, Dollar_paren -> Ordering.Lt
-  | Dollar_paren, Dollar_brace -> Ordering.Gt
-
 let compare_var_no_loc v1 v2 =
   match String.compare v1.name v2.name with
   | (Ordering.Lt | Gt) as a -> a
-  | Eq -> (
-    match Option.compare String.compare v1.payload v2.payload with
-    | (Ordering.Lt | Gt) as a -> a
-    | Eq -> compare_var_syntax v1.syntax v2.syntax )
+  | Eq -> Option.compare String.compare v1.payload v2.payload
 
 let compare_part p1 p2 =
   match (p1, p2) with
@@ -58,7 +38,7 @@ module Pp : sig
 end = struct
   let buf = Buffer.create 16
 
-  let add_var { loc = _; syntax = _; name; payload } =
+  let add_var { loc = _; name; payload } =
     let before, after = ("%{", "}") in
     Buffer.add_string buf before;
     Buffer.add_string buf name;
@@ -107,7 +87,7 @@ end
 
 let to_string = Pp.to_string
 
-let string_of_var { loc = _; syntax = _; name; payload } =
+let string_of_var { loc = _; name; payload } =
   let before, after = ("%{", "}") in
   match payload with
   | None -> before ^ name ^ after
@@ -145,20 +125,9 @@ let remove_locs t =
         | Text _ as s -> s)
   }
 
-let dyn_of_var_syntax =
-  let open Dyn.Encoder in
-  function
-  | Dollar_brace -> constr "Dollar_brace" []
-  | Dollar_paren -> constr "Dollar_paren" []
-  | Percent -> constr "Percent" []
-
-let dyn_of_var { loc = _; name; payload; syntax } =
+let dyn_of_var { loc = _; name; payload } =
   let open Dyn.Encoder in
-  record
-    [ ("name", string name)
-    ; ("payload", option string payload)
-    ; ("syntax", dyn_of_var_syntax syntax)
-    ]
+  record [ ("name", string name); ("payload", option string payload) ]
 
 let dyn_of_part =
   let open Dyn.Encoder in
diff --git a/src/dune_lang/template.mli b/src/dune_lang/template.mli
index 9b3bccb06c0..fe6bd3314d3 100644
--- a/src/dune_lang/template.mli
+++ b/src/dune_lang/template.mli
@@ -1,15 +1,9 @@
 open! Stdune
 
-type var_syntax =
-  | Dollar_brace
-  | Dollar_paren
-  | Percent
-
 type var =
   { loc : Loc.t
   ; name : string
   ; payload : string option
-  ; syntax : var_syntax
   }
 
 type part =
diff --git a/src/jbuild_support/string_with_vars.ml b/src/jbuild_support/string_with_vars.ml
index 4027fcd2893..1c101136950 100644
--- a/src/jbuild_support/string_with_vars.ml
+++ b/src/jbuild_support/string_with_vars.ml
@@ -4,6 +4,17 @@ type var_syntax =
   | Parens
   | Braces
 
+type var =
+  { loc : Loc.t
+  ; name : string
+  ; payload : string option
+  ; syntax : var_syntax
+  }
+
+type part =
+  | Text of string
+  | Var of var
+
 module Token = struct
   type t =
     | String of string
@@ -44,7 +55,7 @@ module Token = struct
 end
 
 (* Remark: Consecutive [Text] items are concatenated. *)
-let rec of_tokens : Loc.t -> Token.t list -> Dune_lang.Template.part list =
+let rec of_tokens : Loc.t -> Token.t list -> part list =
  fun loc -> function
   | [] -> []
   | Open a :: String s :: Close b :: rest when a = b ->
@@ -53,16 +64,7 @@ let rec of_tokens : Loc.t -> Token.t list -> Dune_lang.Template.part list =
       | None -> (s, None)
       | Some (n, p) -> (n, Some p)
     in
-    Var
-      { loc
-      ; name
-      ; payload
-      ; syntax =
-          ( match a with
-          | Parens -> Dollar_paren
-          | Braces -> Dollar_brace )
-      }
-    :: of_tokens loc rest
+    Var { loc; name; payload; syntax = a } :: of_tokens loc rest
   | token :: rest -> (
     let s = Token.to_string token in
     match of_tokens loc rest with
@@ -145,8 +147,17 @@ module Upgrade_var = struct
       (List.concat [ macros; static_vars; lowercased; uppercased; other ])
 end
 
+let string_of_var { loc = _; name; payload; syntax } =
+  let s =
+    match payload with
+    | None -> name
+    | Some p -> sprintf "%s:%s" name p
+  in
+  match syntax with
+  | Parens -> sprintf "$(%s)" s
+  | Braces -> sprintf "${%s}" s
+
 let upgrade_to_dune s ~loc ~quoted ~allow_first_dep_var =
-  let open Dune_lang.Template in
   let map_var v =
     match String.Map.find Upgrade_var.map v.name with
     | None -> None
@@ -162,11 +173,11 @@ let upgrade_to_dune s ~loc ~quoted ~allow_first_dep_var =
       | Renamed_to new_name -> Some new_name )
   in
   let map_part = function
-    | Text _ as part -> part
+    | Text s -> Dune_lang.Template.Text s
     | Var v -> (
       match map_var v with
       | None -> Text (string_of_var v)
-      | Some name -> Var { v with name; syntax = Percent } )
+      | Some name -> Var { name; payload = v.payload; loc = v.loc } )
   in
   let parts = List.map (parse ~loc s) ~f:map_part in
   { Dune_lang.Template.quoted; parts; loc }
diff --git a/test/blackbox-tests/test-cases/output-obj/run.t b/test/blackbox-tests/test-cases/output-obj/run.t
index edb0ad8b8a1..45406dfbfff 100644
--- a/test/blackbox-tests/test-cases/output-obj/run.t
+++ b/test/blackbox-tests/test-cases/output-obj/run.t
@@ -3,10 +3,10 @@
         static alias runtest
   OK: ./static.exe
        dynamic alias runtest
+  OK: ./dynamic.exe ./test.bc$ext_dll
+       dynamic alias runtest
   OK: ./dynamic.exe ./test$ext_dll
         static alias runtest
   OK: ./static.bc
-       dynamic alias runtest
-  OK: ./dynamic.exe ./test.bc$ext_dll
 #        static alias runtest
 #  OK: ./static.bc.c.exe
diff --git a/test/blackbox-tests/test-cases/tests-stanza/run.t b/test/blackbox-tests/test-cases/tests-stanza/run.t
index a501d6eafdd..bfb6e46d72d 100644
--- a/test/blackbox-tests/test-cases/tests-stanza/run.t
+++ b/test/blackbox-tests/test-cases/tests-stanza/run.t
@@ -12,10 +12,6 @@
       ocamldep .expect_test.eobjs/expect_test.ml.d
       ocamldep .expect_test.eobjs/regular_test.ml.d
       ocamldep .expect_test.eobjs/regular_test2.ml.d
-        ocamlc .expect_test.eobjs/byte/expect_test.{cmi,cmo,cmt}
-      ocamlopt .expect_test.eobjs/native/expect_test.{cmx,o}
-      ocamlopt expect_test.exe
-   expect_test expect_test.output
         ocamlc .expect_test.eobjs/byte/regular_test.{cmi,cmo,cmt}
       ocamlopt .expect_test.eobjs/native/regular_test.{cmx,o}
       ocamlopt regular_test.exe
@@ -26,6 +22,10 @@
       ocamlopt regular_test2.exe
   regular_test2 alias runtest
   regular test2
+        ocamlc .expect_test.eobjs/byte/expect_test.{cmi,cmo,cmt}
+      ocamlopt .expect_test.eobjs/native/expect_test.{cmx,o}
+      ocamlopt expect_test.exe
+   expect_test expect_test.output
   $ dune runtest --root generated --display short
   Entering directory 'generated'
       ocamldep .generated.eobjs/generated.ml.d
diff --git a/test/expect-tests/dune_lang/sexp_tests.ml b/test/expect-tests/dune_lang/sexp_tests.ml
index 36744fdde03..a0ae1d73384 100644
--- a/test/expect-tests/dune_lang/sexp_tests.ml
+++ b/test/expect-tests/dune_lang/sexp_tests.ml
@@ -258,8 +258,7 @@ let tq x = Dune_lang.Template { quoted = true; parts = x; loc }
 
 let l x = Dune_lang.List x
 
-let var ?(syntax = Dune_lang.Template.Percent) ?payload name =
-  { Dune_lang.Template.loc; name; payload; syntax }
+let var ?payload name = { Dune_lang.Template.loc; name; payload }
 
 type syntax =
   | Dune