Elixir Pulls the Plug on deUSD After Stream Finance’s Epic $93 Million Oopsie!

by

In a move that has the entire DeFi world scratching their heads, Elixir, the so-called “decentralized finance liquidity provider,” has officially announced the end of the line for its deUSD synthetic dollar stablecoin.

Why, you ask? Oh, just a tiny little hiccup involving Stream Finance, who managed to blow $93 million, triggering a chain reaction that caused the entire DeFi ecosystem to implode in slow motion. Fun, right? 🙄

What Happened Between Elixir and Stream Finance? 🧐

Earlier this week, Stream Finance-yes, that one-posted the tragic news of losing a whopping $93 million in assets managed by an external fund manager. I mean, what could possibly go wrong when someone else is looking after your money, right?

“Yesterday, an external fund manager overseeing Stream funds disclosed the loss of approximately $93 million in Stream fund assets,” Stream posted on November 4.

So, after this minor catastrophe, Stream decided to pull the plug on withdrawals and deposits, just to, you know, give everyone a little peace of mind. They also added that pending deposits would not be processed until “further notice,” because why rush things?

Now, you’re probably wondering how this affects Elixir’s synthetic stablecoin. Well, according to Nansen (who definitely wasn’t just sitting there with popcorn),

“Elixir parked 65% of deUSD’s collateral with Stream. Stream then lost $93 million using its own stablecoin (xUSD) as collateral. When xUSD dropped 77%, deUSD’s entire backing basically vanished. That set off a chain reaction: Stream froze withdrawals → redemptions halted → panic selling hit Curve. $30 million+ dumped onchain as holders raced to exit.”

And there you have it: the “Domino Effect of Chaos.” Elixir’s response? To shut down deUSD, of course. What else can you do when your stablecoin’s backing evaporates into thin air? 🧨

In a dramatic post on X (formerly Twitter, because we love rebranding), Elixir announced it had processed redemptions for 80% of all deUSD holders. Party’s over, folks. 🎉

“All remaining holders of deUSD and sdeUSD will be able to redeem for a dollar,” the team wrote.

As if that wasn’t enough, Elixir also made it clear that deUSD was about as useful as a screen door on a submarine. Do not buy or make investments into deUSD, including through AMMs,” they warned, because who needs a failed synthetic stablecoin in their life?

And just to rub salt in the wound, deUSD’s value plummeted faster than you can say “bankruptcy.” It nosedived by over 97% in 24 hours, and now you can buy it for a mere $0.025. That’s a real bargain, if you’re into losing money. 💸

But wait, there’s more! The Stream Finance team still holds a shocking 90% of the total deUSD supply. And get this: they’ve decided not to pay up or close their lending positions, because why not leave everyone hanging in suspense, right?

Elixir has promised to work with Euler, Morpho, Compound, and other curators (fancy term for “we’re figuring it out”) to try to make things right. They say all claims will be honored on a 1:1 basis. Fingers crossed. 🤞

In the end, Elixir’s decision to pull the plug on deUSD is a sobering reminder of just how delicate these decentralized finance systems are. One protocol’s disaster can create a ripple effect that’s felt across the entire ecosystem. Guess this is why they say “don’t put all your eggs in one basket,” especially when the basket is made of unstable collateral! 🥚

Read More

2025-11-07 14:29