Hidden Leverage and External Party Risks Lead to XUSD Downfall
- Stream Finance's XUSD stablecoin collapsed to $0.30, freezing $160M in user funds after a $93M loss linked to an external fund manager. - The crisis followed a $100M exploit at Balancer Protocol, amplifying DeFi market anxiety and triggering rapid fund withdrawals. - Stream's high-leverage model and hidden $520M TVL vs. $160M actual deposits raised red flags about risky third-party fund usage. - XUSD's collapse exposed DeFi vulnerabilities, reigniting debates on third-party risks and urging audits for pr
The
This turmoil unfolded during a period of heightened instability in DeFi. Just two days earlier, Balancer Protocol experienced a $100 million security breach—one of the year’s most significant incidents,
Stream Finance’s downfall was largely attributed to its aggressive leverage strategy. The protocol invested user funds in repeated yield-generating tactics and had promoted returns as high as 12% through leveraged farming across 50 liquidity pools. However, inconsistencies between its stated total value locked (TVL) of $520 million and independent sources like DeFiLlama—which verified only $160 million in user deposits—sparked concerns about undisclosed leverage, according to
The repercussions went beyond Stream Finance. The collapse of XUSD set off a chain reaction, with
Stream Finance has committed to retrieving liquid assets and sharing regular updates, but users remain in limbo. Losses in DeFi have surpassed $3 billion so far this year—driven by events like the $8.4 million Bunni DEX hack—demonstrating the sector’s ongoing vulnerability, according to Coinotag. Although the platform stresses its commitment to transparency through legal investigations, investors are advised to favor protocols with thorough audits and transparent governance structures.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Ethereum News Update: Anti-CZ Whale’s ETH Long Position Surpasses CZ’s Optimistic ASTER Move, Securing $100M in Profits
- Anti-CZ Whale shifts ETH position to long (32,802 ETH, $109M) after previously shorting ASTER/kPEPE tokens. - Whale's $100M gains stem from shorting ASTER ($21M profit) amid CZ's bullish ASTER purchases causing 20% price swings. - Strategy contrasts with CZ's long-term ASTER investment, highlighting crypto market fragmentation and volatility. - Whale's $109M ETH bet defies broader market decline (3.75%) while analysts praise its macroeconomic navigation skills.
Bitget’s integration of Morph Chain strengthens stablecoins as the foundation for worldwide trade
- Bitget, the world's largest UEX, integrated Morph Chain, enabling direct USDT trading of Morph assets without leaving the platform. - CEO Gracy Chen highlighted stablecoin settlements and onchain liquidity as the "backbone of global commerce" in bridging blockchain and real-world payments. - The partnership with Morph Chain establishes BGB as its native token and creates a framework for fast, borderless stablecoin-powered payments. - Bitget's upgrades include Ethereum/Solana integrations, AI-driven Oncha
Bitcoin Latest Update: TGA’s $1 Trillion Liquidity Drain Drives Bitcoin Down to Lowest Point in Six Months
- U.S. government shutdown swells Treasury General Account (TGA) to $1 trillion, draining liquidity and pushing Bitcoin down 19% from October highs. - Fed injects $30B via repo operations as banks face cash shortages, signaling active liquidity management amid structural tightening. - Analysts predict Bitcoin "final drop" correction phase, with potential rally expected post-shutdown as fiscal spending resumes and rate cuts loom. - Pessimists warn of 2018-style crisis if shutdown extends, while optimists fo
Hyperliquid News Today: JELLYJELLY's Unexpected Rise Amid Crypto Downturn Sparks Manipulation Controversy
- JELLYJELLY, a Solana-based meme coin, surged to $0.50 and $500M market cap amid broader crypto market declines, defying Bitcoin and Ethereum price drops. - Blockchain analytics firm Bubblemaps flagged manipulative tactics, citing 20% liquidity drain from inactive wallets and a 600% price spike linked to coordinated trading. - Leverage platforms like HyperLiquid and Aster offer up to 40x BTC contracts for JELLYJELLY, amplifying risks as its value relies on retail frenzy rather than fundamentals. - Regulat
