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Elixir has decided to shut down its synthetic dollar stablecoin, deUSD, after a $93 million loss at Stream Finance, its largest borrower.
Author: Sahil Thakur
7th November 2025 – Elixir has decided to shut down its synthetic dollar stablecoin, deUSD, after a $93 million loss at Stream Finance, its largest borrower. The protocol said it has already processed redemptions for 80% of holders and has snapshotted the remaining balances.
These users will be able to redeem 1:1 for USDC when a claims portal goes live.
On November 4, Stream Finance halted withdrawals. The move followed a disclosure from an external fund manager about a $93 million loss. Stream now owes at least $285 million to various lenders , including over $68 million to Elixir.
Elixir had loaned deUSD to Stream to support xUSD, Stream’s own stablecoin. That token has now collapsed below $0.20, triggering ripple effects across the DeFi ecosystem. One notable victim: Stable Labs’ USDX, which has also sharply depegged.
In response, Elixir disabled deUSD’s mint and redeem functions. The goal was to stop further liquidations and avoid Stream dumping deUSD before repaying its debt.
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Elixir maintains that deUSD remains fully backed. The team said it’s working with Morpho, Euler, Compound, and vault curators to unwind its loan positions and recover funds.
Even though withdrawals have been halted, Elixir has promised that all users will be made whole. According to the team, the entire remaining supply has been snapshotted. A claims portal is under development.
The team added that “affected LPs in AMMs and lending markets” will also be able to claim the full value of their position.
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Launched in mid-2024, it pitched itself as a “truly decentralized” synthetic stablecoin, rivaling Ethena’s USDe. It quickly gained traction. It was even used as collateral by Hamilton Lane’s tokenized HLSCOPE fund.
But the collapse of Stream Finance – which held about 90% of the deUSD supply, has effectively ended deUSD’s growth story.
Stream, meanwhile, has refused to repay or close positions, according to Elixir. The protocol described itself as the only lender with “full $1 redemption rights.” Still, it now faces the challenge of recovering loans from a counterparty unwilling to pay.
So far, the damage appears limited to synthetic stablecoin and credit circles. But some liquidity pools have already seen outflows. And market watchers are pointing to growing distrust in synthetic dollars backed by cross-protocol leverage.
This event has sparked comparisons to previous failures like Terra’s UST and Iron Finance, though the scale remains more contained, for now.
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