Elixir Shuts Down deUSD Stablecoin After Stream Finance’s $93 Million Loss

Elixir, a decentralized finance liquidity supplier, has introduced that it’s going to wind down its deUSD artificial greenback stablecoin.

The determination follows Stream Finance’s disclosure of a significant loss that triggered ripple results throughout the DeFi ecosystem.

What Happened Between Elixir and Stream Finance?

Earlier this week, Stream Finance introduced a significant loss of round $93 million in belongings managed by an exterior fund supervisor.

“Yesterday, an exterior fund supervisor overseeing Stream funds disclosed the lack of roughly $93 million in Stream fund belongings,” Stream posted on November 4.

Following the incident, the platform suspended all withdrawals and deposits, stating that any pending deposits wouldn’t be processed till additional discover. The firm additionally said that it’s withdrawing all remaining liquid assets, a course of it anticipates finishing within the close to time period.

But why did this influence Elixir’s synthetic stablecoin? According to Nansen,

“Elixir parked 65% of deUSD’s collateral with Stream. Stream then misplaced $93 million utilizing its personal stablecoin (xUSD) as collateral. When xUSD dropped 77%, deUSD’s complete backing principally vanished. That set off a series response: Stream froze withdrawals → redemptions halted → panic promoting hit Curve. $30 million+ dumped onchain as holders raced to exit.”

Elixir responded by sunsetting its artificial stablecoin. In a submit on X (previously Twitter), the community highlighted that it had processed redemptions for 80% of all deUSD holders.

“All remaining holders of deUSD and sdeUSD will have the ability to redeem for a greenback,” the workforce wrote.

Furthermore, the community revealed that it had taken a snapshot of all remaining holder balances. It additionally launched a declare web page for customers to redeem their belongings in USDC.

“deUSD holds no worth and the stablecoin has been sundown. Please don’t purchase or make investments into deUSD, together with by means of AMMs,” Elixir added.

The determination led to a collapse in deUSD’s value. According to BeInCrypto Markets, the synthetic stablecoin plunged greater than 97% in 24 hours and is now buying and selling round $0.025.

Meanwhile, the workforce famous that Stream Finance nonetheless holds round 90% of the full deUSD provide. It added that Stream accounted for over 99% of the lending positions and has opted to not repay or shut them.

Elixir stated that it’s going to work with Euler, Morpho, Compound, and different curators to coordinate the reimbursement and liquidation course of. The protocol stated it nonetheless expects all claims to be honored on a 1:1 foundation.

Thus, Elixir’s determination to wind down deUSD displays the broader influence of collateral instability inside interconnected DeFi techniques. The occasion highlights how losses in a single protocol can influence others and fuels ongoing discussions about collateral design, transparency, and threat administration in decentralized finance.

The submit Elixir Shuts Down deUSD Stablecoin After Stream Finance’s $93 Million Loss appeared first on BeInCrypto.