Stream Finance Launches Probe After Reporting $93M Loss

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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.ย 

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.

โ€œWe are actively withdrawing all liquid assets and expect this process to be completed in the near term,โ€ it said. โ€œWe will provide periodic updates as additional information becomes available.โ€

Source: Stream Finance

While Stream Finance investigates the problem, the platform has temporarily suspended withdrawals and will not process any pending deposits.ย 

Streamโ€™s stablecoin drops by halfย ย 

Stream Finance is a โ€œrecursive loopingโ€ yield-focused DeFi platform that also has a collateralized stablecoin called Staked Stream USD (XUSD).ย ย 

Related: Balancer audits under scrutiny after $100M+ exploit

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.ย ย 

Labs founder Omer Goldberg posted on X about 10 hours before Streamโ€™s announcement that XUSD had โ€œbegan to depeg materially below its target rangeโ€ 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.ย 

XUSDโ€™s price over the last 24 hours. Source: CoinGecko

On Friday, Stream Finance posted to X in response to community questions about discrepancies between the platformโ€™s total value locked (TVL) reported on its website and what was listed on the popular data service DefiLlama.ย 

โ€œDefiLlama 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),โ€ it said.