- Stream’s stablecoin, Staked Stream USD (XUSD), has fallen to $0.2975, according to CoinGecko data.
- The depegging followed a $100 million exploit on Balancer, an automated market maker.
- Stream Finance also faced questions about TVL discrepancies compared with DefiLlama’s figures.
Stream Finance, a decentralized finance (DeFi) platform focused on yield-generating strategies, has paused all deposits and withdrawals after an external fund manager reported a $93 million loss in assets under management.
The incident has triggered close scrutiny across the DeFi ecosystem, raising questions about risk exposure and transparency among platforms that pursue high yields using complex strategies.
The Stream Finance team confirmed the loss in an X post on Monday, noting that the fund manager had disclosed the issue a day earlier.
The project has retained Perkins Coie to conduct an independent investigation into the matter.
Withdrawals halted as Stream works to recover assets
According to Stream Finance, the team is currently liquidating all available assets and expects this process to be completed shortly.
They said periodic updates will be provided as more information becomes available.
While the investigation continues, the platform has suspended withdrawals and stopped processing pending deposits, effectively freezing user funds until clarity is achieved.
Stream Finance’s statement on X read: “We are actively withdrawing all liquid assets and expect this process to be completed soon.”
The platform said users will be kept informed through regular updates.
Stream stablecoin XUSD loses peg
Stream Finance operates a yield-focused protocol that uses recursive looping strategies and issues a collateralized stablecoin called Staked Stream USD (XUSD).
Before the team’s public announcement, XUSD had already begun diverging from its $1 peg, signaling growing concern among users.
On Sunday, community members noted that deposits and withdrawals had been paused without prior communication from the team.
As speculation mounted, XUSD fell below its target range and dropped as low as $0.51, according to CoinGecko data.
At the time of writing, XUSD is priced at $0.2975, down 76.4% over the past 24 hours — one of the steepest single-day declines among stablecoins this year.
Source: CoinGecko
Omer Goldberg, founder at Labs, wrote on X roughly 10 hours before Stream Finance’s official statement that XUSD had begun trading “substantially below its target range.”
Goldberg linked the development to an exploit exceeding $100 million on Balancer, an automated market maker platform.
The timing between the Balancer exploit and Stream Finance’s reported loss has led observers to draw parallels between liquidity-management vulnerabilities and asset exposure risks on DeFi platforms.
TVL discrepancies raise transparency concerns
On Friday, before the loss announcement, Stream Finance addressed community concerns about differences between its total value locked (TVL) figures shown on its website and those reported by DefiLlama.
Stream Finance explained on X that DefiLlama excludes recursive looping from its TVL calculations, saying, “DefiLlama has decided that recursive looping is not TVL according to their own definitions.
We disagree, but to be transparent to users the website now distinguishes between user deposits (~$160 million) and total assets deployed across strategies (~$520 million).”
This clarification highlighted how differences in data methodology can create uncertainty when assessing exposure for DeFi protocols.
Analysts note that inconsistent reporting standards across DeFi platforms can obscure the true leverage levels within yield-generating models.
Minal Thurkal, head of DeFi Ecosystem Growth at CoinDCX, said the case underscores “the critical importance of understanding exactly how protocols generate yield and the significant risks involved in complex DeFi strategies.”
She added that projects that deviate from widely used metrics, such as DefiLlama’s TVL calculations, can exacerbate transparency challenges for both users and investors.
Wider DeFi implications
The Stream Finance incident arrives amid increasing regulatory attention on DeFi protocols and stablecoin risk management.
Depegging events, like XUSD’s recent collapse, often erode market confidence and prompt liquidity withdrawals from decentralized platforms.
As DeFi expands beyond early adopters, incidents like this expose the fragility of complex yield structures and the urgent need for standardized transparency frameworks.
With Stream Finance’s investigation ongoing, the broader ecosystem will closely monitor how the project handles asset recovery and user compensation.