Stream Finance Loses $93 Million as Stablecoin XUSD Collapses

Core Insights - Stream Finance is facing a crisis after an external fund manager lost approximately $93 million of the platform's assets, leading to a significant sell-off and a nearly 77% drop in its stablecoin, XUSD [1][3] - The incident has raised concerns about the vulnerability of decentralized finance (DeFi) protocols that rely on third-party fund managers and aggressive investment strategies [5] Group 1: Financial Impact - The loss resulted in XUSD, which was intended to maintain a $1 peg, plummeting to around $0.30 [3] - The total value locked in the platform decreased from about $204 million at the end of October to just $98 million [3] Group 2: Operational Response - In response to the crisis, Stream Finance froze all deposits and withdrawals to mitigate further losses [2] - The platform has engaged law firm Perkins Coie LLP to conduct an independent investigation into the loss and has committed to recovering as many assets as possible [7][8] Group 3: Industry Implications - The crisis has highlighted the fragility of DeFi systems, particularly when transparency is lacking and reliance on external managers is high [4][5] - Other DeFi projects are expected to face increased scrutiny regarding their risk management practices and reserve transparency in the aftermath of this incident [6]