Decentralized finance platform Stream Finance says it has paused deposits and withdrawals after an external fund manager overseeing its funds found a $93 million loss in its assets.
The Stream Finance team said in an X post on Monday that the fund manager reported the loss on Sunday and the project has since hired lawyers from Perkins Coie to investigate the incident.
“We are actively withdrawing all liquid assets and expect this process to be completed in the near term,” it said. “We will provide periodic updates as additional information becomes available.”
While Stream Finance investigates the problem, the platform has temporarily suspended withdrawals and will not process any pending deposits.
Stream’s stablecoin drops by half
Stream Finance is a “recursive looping” yield-focused DeFi platform that also has a collateralized stablecoin called Staked Stream USD (XUSD).
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Before Stream Finance posted on X on Monday, XUSD had already started to depeg below a dollar as many users had sensed trouble on Sunday, questioning why deposits and withdrawals had been paused without communication from the team.
Labs founder Omer Goldberg posted on X about 10 hours before Stream’s announcement that XUSD had “began to depeg materially below its target range” after an over $100 million exploit on the automated market maker Balancer.
At the time of writing, XUSD has dropped to as low as $0.51, according to data from CoinGecko.
On Friday, Stream Finance posted to X in response to community questions about discrepancies between the platform’s total value locked (TVL) reported on its website and what was listed on the popular data service DefiLlama.
“DefiLlama has decided that recursive looping is not TVL per their own definitions. We disagree with this, but to be transparent to users the website now makes a distinction between user deposits (~$160M) and total assets deployed across strategies. (~%$520M),” it said.
“This underscores the critical importance of understanding exactly how protocols generate yield and the significant risks involved in complex DeFi strategies, especially those that disagree with standard metrics like DefiLlama’s TVL,” said CoinDCX’s head of DeFi Ecosystem Growth, Minal Thurkal.
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