Decentralized finance liquidity provider Elixir has discontinued support for its synthetic stablecoin, deUSD, following the ripple effects of Stream Finance’s $93 million loss earlier this week.
In a post on X Thursday, Elixir confirmed that it has processed redemptions for 80% of deUSD holders. As a result, the stablecoin has sharply depegged from the US dollar, trading at just 1.5 cents according to CoinGecko data.
The turmoil began on Tuesday when Stream paused withdrawals after an external fund manager reported a $93 million net loss, which included roughly $285 million in debt to multiple lenders—about $68 million of which was owed to Elixir.
Stream Sparks Ripple Effects
Stream had borrowed deUSD to support its Staked Stream USD (XUSD) stablecoin, which plunged to as low as $0.10 after the protocol revealed its $93 million loss.
Elixir’s deUSD, launched in July 2024, was designed to compete with Ethena Labs’ USDe as a leading synthetic stablecoin. Before the depeg, deUSD’s market cap was around $150 million.
Elixir Says Stream Refuses Repayment
Elixir stated that Stream still holds about 90% of the remaining deUSD supply, valued at $75 million. The platform claims Stream has opted not to repay or close these positions, forcing Elixir to coordinate with other decentralized lenders—including Euler, Morpho, and Compound—to ensure deUSD holders are fully paid.
“We still believe this will be honored 1 for 1.”
Elixir decided to disable withdrawals in part to “remove any risk of Stream liquidating deUSD before repaying their loan.”
