Decentralized finance (DeFi) platform Stream Finance has suspended deposits and withdrawals after an external fund manager overseeing its assets discovered a $93 million loss.
In an announcement on X Monday, the Stream Finance team said the fund manager reported the shortfall on Sunday. The project has since retained legal counsel from Perkins Coie to conduct an investigation into the incident.
“We are actively withdrawing all liquid assets and expect this process to be completed soon,” the team said, adding that it will provide regular updates as more details emerge.
As Stream Finance continues to investigate the issue, the platform has temporarily halted withdrawals and will not process any pending deposits.
Stream’s Stablecoin Loses Half Its Value
Stream Finance, a yield-focused DeFi platform that uses a recursive looping strategy, also issues a collateralized stablecoin known as Staked Stream USD (XUSD).
Before the team’s announcement on X Monday, XUSD had already started depegging below $1, as users noticed stalled transactions over the weekend and questioned the lack of communication from the project.
Labs founder Omer Goldberg wrote on X roughly ten hours before Stream’s post that XUSD had “begun to depeg materially below its target range” following a $100 million exploit on the automated market maker Balancer.
As of publication, XUSD had fallen to around $0.51, according to CoinGecko data.
On Friday, Stream Finance addressed community concerns on X about discrepancies between the total value locked (TVL) reported on its website and figures listed on DeFiLlama.
“DeFiLlama has decided that recursive looping does not qualify as TVL under its definitions. We disagree with this interpretation, but in the interest of transparency, our website now distinguishes between user deposits (~$160 million) and total assets deployed across strategies (~$520 million),” the project wrote.
Commenting on the situation, Minal Thurkal, head of DeFi Ecosystem Growth at CoinDCX, said the debate highlights “the critical importance of understanding how protocols actually generate yield — and the significant risks tied to complex DeFi strategies, particularly those that diverge from standard metrics like DeFiLlama’s TVL.”
