Derived from BlockTempo, DeFi protocol Stream Finance reported a $93 million user asset loss due to an external fund manager, leading to a severe depegging of its stablecoin xUSD to approximately $0.20. The incident has triggered a chain reaction across multiple DeFi platforms, with research firm Yields and More (YAM) estimating over $284 million in direct debt and stablecoin exposure involving Euler, Silo, Morpho, and Gearbox. Analysis reveals that Stream and Elixir engaged in a recursive minting strategy, inflating TVL through cross-chain lending and stablecoin minting, creating a Ponzi-like structure. The system's true collateralization is now questionable, with potential support per dollar of stablecoin possibly below $0.10.
DeFi Protocol Stream Finance Suffers $93M Loss, xUSD Stablecoin Plummets to $0.20
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