Core Insights - Stream Finance's external fund manager lost approximately $93 million in user assets, leading to a 77% crash in the price of its stablecoin, Staked Stream USD (xUSD) [1][2] - The protocol has suspended all withdrawals and deposits while engaging a law firm to investigate the incident [1][2] - The loss has exposed vulnerabilities in the interconnected lending ecosystem of DeFi [1] Financial Impact - The price of xUSD plummeted to approximately $0.50 shortly after the loss, and as of the latest data, it is trading at $0.26, marking a 77% drop in 24 hours [2] - Direct debt exposure across multiple lending protocols is estimated at nearly $285 million, with significant exposure from various curators [3] Market Dynamics - The incident raises concerns about the settlement process between xUSD/xBTC/xETH holders and lenders, as these tokens were used as collateral in DeFi lending markets [4] - Indirect exposure includes stablecoins like Elixir's deUSD, which lent $68 million USDC to Stream, representing 65% of its backing [4] Risk Factors - The collapse is attributed to a leverage ratio exceeding 4x, with borrowing reaching $530 million against supporting assets of only $170 million [5] - The use of rehypothecation chains, where collateral is used multiple times across different platforms, has created a cascading effect in the market [5]

RT yohaan.sonic (@YJN58)Here is how the pool works 👇1. Users can deposit either $scUSD, $USDC or both $scUSD and $USDC into this pool2. 100% of the $USDC and $scUSD in this pool are then "BOOSTED" by supplying into a yield vault managed by @stabilitydao3. The strategies undertaken by this vault ensure that there is no impermanent loss (only lending) so that LP will always be made wholeWhat happens during a swap?Assume a trader wants to swap 100 scUSD for $USDCThe current trading fee for this pool is 0.0025% ...