Stream Finance, a decentralized finance (DeFi) protocol, has suspended all deposits and withdrawals after an external fund manager disclosed a significant loss of approximately $93 million in the protocol’s managed assets.
The Stream team announced they have retained legal counsel, including Keith Miller and Joseph Cutler of law firm Perkins Coie, to immediately investigate the incident. The protocol is currently withdrawing all remaining liquid assets and expects to complete this process soon. All deposits and withdrawals will remain paused until the scope and cause of the $93 million loss are fully understood.
The news instantly triggered panic across the protocol's ecosystem. XUSD, Stream's staked stablecoin, broke its $1 peg and plunged by as much as 58% in 24 hours.
On-chain analysts believe the price collapse was primarily a "trust shock" rather than a direct smart contract exploit, as there was no immediate evidence of a protocol hack.
However, the incident has amplified concerns about the stablecoin's backing. Unverified claims suggested that the protocol held roughly $170 million in supporting assets against approximately $530 million in outstanding loans, implying a high leverage ratio.
Stream Finance, launched in early 2024, grew quickly by blending DeFi and traditional market techniques, where users deposit USDC to receive yield-targeting XUSD. The protocol's business model relied on strategies like lending arbitrage and hedged market making, sometimes using external managers—a key element now under intense scrutiny following the loss.
November 2025, Cryptoniteuae