Elixir, a DeFi liquidity provider, has announced it will discontinue support for its synthetic stablecoin deUSD following Stream Finance’s $93 million loss earlier this week.
In a statement posted on X (formerly Twitter) on Thursday, Elixir confirmed it had already processed withdrawal requests for 80% of all deUSD holders. The mass withdrawals triggered a collapse in the token’s peg, sending its price down to $0.015, according to data from CoinGecko.
Stream’s Collapse Sparks Chain Reaction
On Tuesday, Stream Finance suspended withdrawals after a third-party asset manager reported losses of $93 million in net assets, alongside $285 million in total liabilities owed to multiple creditors — including roughly $68 million to Elixir.
Stream had borrowed deUSD to help stabilize its own algorithmic stablecoin, Staked Stream USD (XUSD), which subsequently crashed to $0.10 following news of the losses.
Launched in July 2024, Elixir’s deUSD was intended to rival Ethena Labs’ USDe, aiming to become a leading synthetic stablecoin. Before losing its peg, deUSD’s market capitalization stood at approximately $150 million.
Elixir: Stream Refuses to Repay
Elixir stated that Stream currently holds about 90% of the remaining deUSD supply, valued at roughly $75 million. The company claims Stream has refused to return funds or unwind positions, forcing Elixir to work with other DeFi lenders — such as Euler, Morpho, and Compound — to compensate remaining deUSD holders.
“We still believe there’s a fair resolution ahead,” Elixir wrote, adding that it will partially restrict withdrawals to prevent Stream from liquidating deUSD before loan settlements.
