Key Notes
- Stream's xUSD vault grew to $400M with suspicious flat 15% yields, suggesting manually set returns rather than organic market performance.
- Outstanding loans worth $285M across Euler, Silo, and Morpho protocols are backed by Stream's collateral tokens xUSD, xBTC, and xETH.
- Elixir Network faces severe exposure with $68M USDC lent to Stream, representing 65% of its deUSD stablecoin backing and raising depeg risks.
DeFi platform Stream Finance suspended all withdrawals and deposits on Nov. 3 after an external fund manager disclosed a loss of approximately $93 million in company assets. The platform retained attorneys Keith Miller and Joseph Cutler of law firm Perkins Coie LLP to investigate the incident.
Stream Finance announced in a Nov. 3 statement that it is withdrawing all liquid assets and expects to complete the process in the near term. The company provided no timeline for resuming withdrawals or identifying the external fund manager responsible for the loss.
Yesterday, an external fund manager overseeing Stream funds disclosed the loss of approximately $93 million in Stream fund assets.
In response, Stream is in the process of engaging Keith Miller and Joseph Cutler of the law firm Perkins Coie LLP, to lead a comprehensive…
— Stream Finance (@StreamDefi) November 4, 2025
Suspicious Growth Pattern Preceded Collapse
Stream’s xUSD vault expanded from $40 million to nearly $400 million in recent months while displaying a flat 15% yield throughout the growth period, according to web3 lawyer Iptisha.
The lawyer noted that onchain yields typically decrease as more depositors split profits and fluctuate based on market conditions, suggesting returns were being manually set or averaged from offchain strategies.
There’s a lot more off about stream finance than just a $93m loss
their stablecoin xusd depegged 25% right after the announcement and that’s not a coincidence if the vault loses collateral, the peg breaks
The xusd vault itself grew insanely fast from $40m to nearly $400m in a… pic.twitter.com/7UIe4OQkEI
— Iptisha | Circulox.org (@iptishax) November 4, 2025
Stream Finance operates without a comprehensive Proof of Reserve or transparency dashboard, relying instead on a Debank bundle showing onchain positions, according to Chaos Labs founder Omer Goldberg. Following the Nov. 3 announcement, xUSD depegged 25% from its target price before partially recovering.
5/ Stream Finance does not currently maintain a comprehensive transparency dashboard or a Proof of Reserve; however, it publishes a link to a Debank Bundle that shows its on-chain positions.
However, in the aftermath of the exploit, these simple disclosures did not decisively…
— Omer Goldberg (@omeragoldberg) November 3, 2025
Contagion Threatens $285M Across DeFi Protocols
An estimated $284.96 million in outstanding loans are secured by Stream’s xUSD, xBTC, and xETH collateral across multiple DeFi lending platforms, according to pseudonymous analyst YAM. The collateral backs loans on protocols including Euler, Silo, and Morpho across Ethereum, Arbitrum, Avalanche, Plasma, and Sonic networks.
Users deposit Bitcoin BTC $103 694 24h volatility: 2.1% Market cap: $2.07 T Vol. 24h: $86.83 B , Ethereum ETH $3 518 24h volatility: 2.1% Market cap: $427.29 B Vol. 24h: $50.06 B , and dollars to mint these derivative tokens, which are then used as collateral on other platforms.
This is a massive loss. It's unclear how this will be settled in between xUSD/xBTC/xETH holders and lenders against these tokens, so let’s go over all stablecoins/vaults that have (in)direct exposure to Stream.
Best we can tell, these stablecoins have indirect exposure:
Elixir’s…— YAM 🌱 (@yieldsandmore) November 4, 2025
Elixir Network’s deUSD stablecoin has $68 million in USDC USDC $1.00 24h volatility: 0.0% Market cap: $75.41 B Vol. 24h: $20.94 B lent to Stream against xUSD collateral, representing 65% of deUSD’s total backing. Elixir claimed it holds full redemption rights at $1 for its lending position, but Stream told the company it cannot process payouts until attorneys determine creditor priority, according to YAM’s analysis. The exposure puts Elixir at risk if Stream cannot recover funds, similar to recent stablecoin depeg events affecting the $280+ billion stablecoin market .
The largest exposed curator is TelosC with $123.64 million in loans secured by Stream assets, followed by Elixir at $68 million and MEV Capital at $25.42 million. MEV Capital’s xUSD market on Arbitrum has fallen below liquidation thresholds with borrow rates reaching 88% at 100% utilization. The positions have not liquidated because many markets use fundamental value oracles rather than spot prices, which delays default risk in DeFi lending strategies .
Stream Finance provided no information about the external fund manager’s identity, investment strategy, or custody arrangements.
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