Elixir Retires deUSD Stablecoin After Stream Finance’s $93M Loss

TLDR

• Elixir has decided to retire its deUSD stablecoin following Stream Finance’s $93 million loss.
• The platform will compensate deUSD holders with USDC instead of the now-devalued stablecoin.
• About 80% of deUSD holders have already received compensation, excluding Stream Finance’s holdings.
• Stream Finance still holds around 90% of the remaining deUSD supply in circulation.
• Elixir has halted minting and redeeming of deUSD as part of the stablecoin’s retirement process.

Elixir has decided to retire its deUSD stablecoin after Stream Finance’s $93 million loss. The platform announced the move on Nov. 6, stating that the stablecoin holds no value. Elixir’s decision comes after Stream borrowed deUSD to stabilize its own troubled stablecoin.

Elixir Halts deUSD Minting and Redeeming

Elixir confirmed that it will no longer mint or redeem the deUSD stablecoin. The platform assured that it will compensate deUSD holders with USDC instead. The compensation process began immediately, although it is not available for users holding deUSD on platforms like Sui and Sei.

Elixir claims that it has already compensated about 80% of the deUSD holders. However, the remaining 20% includes Stream Finance, which holds a large portion of deUSD. As of now, more than 91 million deUSD remain in circulation, with Stream holding around 90% of the supply.

Despite the halt in minting, Elixir promised to fully compensate users who held deUSD in Automated Market Makers (AMMs) or lending markets. “Any affected LPs in AMM pools or lending markets will be able to claim the full value of their position,” the platform added.

Stream’s Losses Impact deUSD and XUSD

Stream Finance has been hit by a $93 million loss in net assets, according to its external fund manager. Stream borrowed deUSD to stabilize its own stablecoin, Staked Stream USD (XUSD). However, the value of XUSD dropped drastically from $1 to $0.17 in just a few days.

Stream’s troubles have forced it to halt withdrawals and deposits on its platform. The company owes around $285 million to various creditors, including $68 million to Elixir. Stream is also struggling to repay its outstanding debts, which complicates its position.

According to Elixir, Stream still holds about $75 million in deUSD. Elixir also retains a similar amount of deUSD backed by a Morpho loan. The platform is now working with Euler, Morpho, and Compound to manage the loan repayment process.

Stream’s failure to close or repay its positions has left the majority of on-chain lending positions unresolved. Elixir stated that it remains hopeful Stream’s debts will be repaid 1 for 1. The situation remains in flux as the parties continue their efforts to resolve the issue.

Elixir’s decision to sunset deUSD follows Stream’s financial troubles. The platform is offering compensation to deUSD holders and working to resolve Stream’s debt.

The post Elixir Retires deUSD Stablecoin After Stream Finance’s $93M Loss appeared first on CoinCentral.