Elixir Sunsets deUSD Stablecoin Following $93 Million Loss at Stream Finance

Decentralized finance (DeFi) liquidity provider Elixir has announced it will wind down its synthetic dollar stablecoin, deUSD, in a direct response to a major financial loss disclosed by Stream Finance.

The Interconnected Collapse

The chain of events began earlier this week when Stream Finance revealed that an external fund manager had caused a significant loss of approximately $93 million in Stream fund assets. Stream Finance immediately suspended all withdrawals and deposits.This incident directly impacted Elixir because of their interwoven financial relationship:

• Collateral Exposure: Elixir had parked 65% of deUSD's collateral with Stream.
• The Vanishing Backing: Stream Finance lost the $93 million while using its own stablecoin, xUSD, as collateral. When xUSD's value plummeted by 77%, the backing for deUSD essentially disappeared.
• Chain Reaction: The result was a classic DeFi crisis: Stream froze withdrawals, which halted deUSD redemptions and triggered panic selling on platforms like Curve, where over $30 million was dumped by holders racing to exit.

Elixir's Response and Resolution

Following the crisis, Elixir made the decision to sunset deUSD, declaring that the stablecoin "holds no value."

• Redemption Promise: Elixir stated it had already processed redemptions for 80% of all deUSD holders. They emphasized that all remaining holders of deUSD and sdeUSD will still be able to redeem their assets for a dollar (1:1 basis).
• Claims Process: The network took a snapshot of remaining balances and launched a claims page for users to redeem their assets in USDC.
• Value Collapse: The market reacted swiftly, causing deUSD's value to plunge over 97% in 24 hours, trading now at around $0.025.

Stream Finance still holds nearly 90% of the total deUSD supply and accounts for over 99% of the outstanding lending positions, which it has chosen not to close or repay. Elixir has committed to working with protocols like Euler, Morpho, and Compound to coordinate the repayment and liquidation process.

This event underscores the risks of collateral instability and interconnectedness within the DeFi ecosystem, reigniting discussions about transparency and risk management.

November 2025, Cryptoniteuae