The cryptocurrency market has witnessed several stablecoin collapses, with the most notable being the depegging of Luna USDT in 2022, which led to a prolonged downturn for the entire market.
Understanding the Elixir and Stream Finance Collapse
On November 4th, Stream Finance announced that an external fund manager overseeing its assets had disclosed the loss of approximately $93 million in Stream fund assets. This announcement came just three days after Stream Finance had publicized a $400 million proof of assets. Despite the substantial reserves, the $93 million loss could not be fully absorbed.
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
Prior to this, on October 30th, Stream had revealed its $400 million proof of assets. The subsequent $93 million loss significantly impacted its stability.
Happy to announce Stream has signed letters of engagement with various reputable firms, who will be handling our proof of reserves, >400m of our backing is public and transparent on chain,
In the mean time we have shared our books to various curators and are in the process of…
— Stream Finance (@StreamDefi) October 30, 2025
This situation followed the Balancer Exploit, which was covered on November 3rd, and contributed to a broader sense of unease in the decentralized finance space.
Consequently, Stream's staked stablecoin, XUSD, began to depeg, falling from its intended $1 value to approximately $0.11, a 90% depreciation.
The Interconnectedness of deUSD and XUSD
The collapse of Stream XUSD had a direct impact on deUSD due to a prior arrangement between the two protocols. Months before the incident, Stream Finance had borrowed deUSD to help maintain its XUSD stablecoin's peg. This created a significant interdependency, with Stream Finance holding approximately 90% deUSD and Elixir holding 90% XUSD.
When Stream declared its $93 million loss and paused XUSD withdrawals, XUSD's value plummeted. Elixir, realizing that its holdings of deUSD were effectively devalued due to the XUSD it held, initiated a claim portal.
Through this portal, Elixir enabled 80% of its users to deposit deUSD and withdraw USDC. This process was facilitated by the combined efforts of Euler, Morpho, and Compound. The mechanism by which Elixir plans to repay these protocols remains undisclosed.
Shortly after these events, Elixir announced its intention to abandon deUSD. The claim portal remains active, and affected users are encouraged to claim their USDC without delay.