Elixir Pulls Support for deUSD After Stream Finance’s $93 Million Collapse

Decentralized finance (DeFi) liquidity provider Elixir has officially ended support for its synthetic stablecoin deUSD following the ripple effects of Stream Finance’s $93 million loss earlier this week. The move has sent shockwaves across the DeFi community and caused deUSD to lose nearly all of its value.

In a post on X on Thursday, Elixir announced that it had already processed redemptions for 80% of all deUSD holders, a step that inadvertently led to the token’s severe depegging from the U.S. dollar. Data from CoinGecko shows that deUSD is now trading at just 1.5 cents, marking a near-total collapse from its $1 target.

Stream’s Loss Triggers a DeFi Chain Reaction

Stream Finance, once viewed as a key player in the DeFi yield sector, halted all withdrawals on Tuesday after one of its external fund managers revealed a $93 million loss in net assets. The disclosure also included an estimated $285 million in outstanding debt to various lenders — among them $68 million owed to Elixir.

Stream had borrowed large amounts of deUSD to help stabilize its own synthetic stablecoin, Staked Stream USD (XUSD). However, following the firm’s disclosure, XUSD’s value plummeted to $0.10, deepening the crisis.

Launched in July 2024, Elixir’s deUSD was designed to rival Ethena Labs’ USDe as a leading synthetic stablecoin. Before the depeg, deUSD had a market capitalization of around $150 million, making it one of the more prominent algorithmic assets in decentralized finance.

Elixir Claims Stream Refused to Repay Debt

In its statement, Elixir alleged that Stream currently holds about 90% of the remaining deUSD supply, valued at approximately $75 million, and has refused to repay or close its open positions. This left Elixir in a difficult position, forcing the firm to coordinate with other DeFi lending protocols to ensure that remaining deUSD holders could be repaid in full.

“We still believe this will be honored 1 for 1,” Elixir said, emphasizing its commitment to protecting user funds despite the market fallout.

As a precaution, the company disabled withdrawals to “remove any risk of Stream liquidating deUSD before repaying their loan.”

The incident marks one of the largest DeFi stablecoin disruptions in recent months and has reignited discussions about the fragility of synthetic asset models.