$284M In DeFi Loans And Stablecoin Risk Traced To Stream Finance

Decentralized finance (DeFi) researchers have mapped more than $284 million in stablecoin exposure and outstanding loans linked to Stream Finance, following the collapse of the protocol.

On Tuesday, a detailed post from the DeFi Yields and More (YAM) group reported dozens of loan markets and vaults, including the Euler, Silo, Morpho and Gearbox platforms, which hold positions related to Stream’s synthetic assets, which include xUSD, xBTC and xETH.

The data highlighted the extent of the fall. Exposure cycles involving Elixir’s deUSD, Treeve’s scUSD and other assets suggest that at least $284.9 million in overall debt is owed to lenders in various markets. This excludes indirect exposure through secondary flips and other lending strategies.

According to the post, DeFi funds and curators include TelosC, Elixir, MEV Capital, Varlamore and Re7 Labs. The post showed that TelosC has about $123 million in material exposure, while Elixir has lent $68 million to Stream, which is estimated at 65% of its stablecoin support.

YAM said more vaults and stalls were “likely to be affected”

Elixir claimed to have contractual redemption rights at $1 per deUSD. However, Stream Finance said repayment must wait until lawyers determine “who owes what”.

The findings reinforce existing concerns regarding transparency in the high-performance infrastructures of the DeFi ecosystem.

The protocols involved had exposures layered across the loan markets and derivative stablecoins, making it difficult to identify who ultimately bears the losses.

“This is not an extensive list; there are likely more stalls/vaults affected, and the information presented here is not guaranteed to be accurate,” YAM wrote.

Related: Crypto Sentiment Drops to ‘Extreme Fear’ as Bitcoin Falls Below $106K

Stream Finance’s $93 million loss

The exhibition map follows Stream Finance’s announcement which had paused deposits and withdrawals after finding a $93 million loss attributed to an outside fund manager.

The project stated that it had employed the services of the attorney Perkins Coie to investigate and recover the assets. However, it did not provide a timetable for resuming its normal operations.

Before the announcement, traders noticed unusual delays and discrepancies between the total value of the blocked project (TVL) and the figures listed by the DefiLlama aggregator.

After the announcement, Staked Stream USD (xUSD) quickly depegged to around $0.50, striking fear among users. At the time of writing, CoinGecko data indicated that asset was trading at $0.33.