- Elixir halted deUSD after Stream Finance lost $93 million leaving most holders at risk.
- XUSD stablecoin collapsed to $0.10 following Stream Finance debt and withdrawal freeze.
- Balancer hack lost over $98 million with partial recovery showing ongoing DeFi risks.
Decentralized finance (DeFi) liquidity provider Elixir has halted support for its synthetic stablecoin, deUSD. This decision follows Stream Finance’s $93 million loss earlier this week. Elixir announced that redemptions have been processed for 80% of deUSD holders. As a result, the token’s value dropped to approximately $0.015, according to CoinMarket Cap.
Stream Finance froze withdrawals on Tuesday, revealing significant debt and liquidity issues. The platform reported $285 million in total liabilities, including $68 million owed to Elixir. Stream had borrowed deUSD to back its Staked Stream USD (XUSD) stablecoin. Following the disclosure, XUSD collapsed to around $0.10.
Impact on deUSD Holders
Launched in July 2024, deUSD was positioned as a competitor to Ethena’s USDe, with a market capitalization of about $150 million prior to the crash. Stream currently holds roughly 90% of the remaining deUSD supply, valued near $75 million. The platform has not repaid or closed its positions. Elixir is working with other DeFi protocols, including Euler, Morpho, and Compound, to compensate affected holders.
Withdrawals were disabled to prevent further liquidation before debt settlement.
On-chain analysts described XUSD’s decline as a crisis of confidence rather than a technical failure. Most trading activity originated from the Arbitrum network. No exploits or smart contract vulnerabilities were identified. Social media conversations raised concerns about project reserves. Some users suggested that the asset base was $170 million against $530 million in loans, implying high leverage.
Broader DeFi Security Concerns
The turmoil comes as DeFi faces increasing scrutiny. Stream’s reliance on external fund managers has drawn attention to transparency and counterparty risks. These managers were meant to handle overflow funds beyond internal capacity. Analysts are evaluating how this model contributes to instability in capital-efficient DeFi strategies.
In parallel, Balancer experienced a breach targeting its V2 Composable Stable Pools. The attack resulted in losses exceeding $128 million across multiple blockchains. Exploited flaws included authorization and callback vulnerabilities. Analysts tracked stolen WETH, osETH, and wstETH, identifying laundering via Tornado Cash.
Recovery Efforts and Market Reactions
StakeWise successfully recovered 5,041 osETH, worth approximately $19.3 million, reducing stolen assets to $98 million. Over half of the stolen funds were converted to Ethereum, aiding tracking efforts. Balancer confirmed that the breach was limited to V2 pools. V3 pools and other assets remained unaffected. However, Berachain fully recovered $12.8 million lost in the Balancer V2 exploit , showing strong security action. Investor confidence remained fragile, highlighted by a dormant whale withdrawing $6.5 million following the hack.
