DeFi Protocol Stream Finance Suspends Withdrawals Following $93M Loss
Stream Finance suspended deposits and withdrawals after an exterior fund supervisor overseeing the protocol’s funds disclosed a lack of about $93m in fund property, it mentioned Tuesday.
The workforce mentioned it has retained Keith Miller and Joseph Cutler of legislation agency Perkins Coie to analyze the incident.
“We are actively withdrawing all liquid property and count on this course of to be accomplished within the close to time period,” Stream mentioned, including that periodic updates will comply with as extra data turns into obtainable.
Until the scope and reason behind the loss are recognized, Stream mentioned all withdrawals and deposits will stay paused. “Any pending deposits is not going to be processed right now,” the assertion mentioned.
Stablecoin XUSD Plunges as Traders Rush to Exit After Loss Disclosure
The announcement hit sentiment throughout the protocol’s ecosystem. Earlier, its staked stablecoin XUSD broke from its $1 peg, dropping as a lot as 58% in 24 hours. Traders pointed to heavy promoting on Arbitrum-based venues as confidence slipped.
The disclosure went reside round 12.45 pm UTC, in a window that additionally noticed reviews of a large multichain exploit on Balancer. While the occasions seem unrelated, the overlap in timing amplified nervousness throughout pockets of DeFi and accelerated defensive positioning.
Within hours, aggressive XUSD-to-USDC swaps on Camelot and Uniswap drove XUSD from $1 to $0.92. As Stream confirmed the freeze on deposits and withdrawals pending the investigation, bids thinned and the worth slid additional.
Between 6.00 pm UTC on Nov. 3 and a pair of.00 am UTC on Nov. 4, liquidations and arbitrage stress pushed XUSD to about $0.43.
No Evidence of Direct Exploit, But Leverage Concerns Deepen
On-chain watchers framed the slide as a belief shock relatively than a confirmed sensible contract failure. They famous that buying and selling exercise on Arbitrum dominated the transfer, with no direct proof of a protocol exploit on the time of writing.
Concerns over backing intensified on social media. One X person claimed that on-chain information confirmed roughly $170m in supporting property towards about $530m in excellent loans, implying leverage above 4 instances. Those figures couldn’t be independently verified in actual time.
Stream launched in early 2024 with a pitch of capital-efficient methods that mix DeFi and conventional market strategies. Users deposit USDC right into a vault and obtain XUSD, which targets yield by means of actions reminiscent of lending arbitrage, incentive farming and hedged market making. The protocol has additionally labored with exterior managers when inner capability is exceeded.
The mannequin helped Stream develop rapidly by means of 2025, however reliance on exterior counterparties now sits on the middle of the investigation.
The publish DeFi Protocol Stream Finance Suspends Withdrawals Following $93M Loss appeared first on Cryptonews.
