The damage extends well beyond Stream itself, as several stablecoins and lending vaults show signs of indirect exposure.
While the situation remains fluid, the numbers already point to a vast web of interconnected debt and counterparty risks.
DeFi Stablecoins caught in the crossfire
According to YAM, one of the most exposed projects appears to be Elixir’s deUSD, a stablecoin that loaned $68 million in USDC to Stream Finance, representing approximately 65% of its total reserves. The Stream main wallet borrowed these funds against xUSD collateral, meaning that the stability of Elixir is directly linked to the creditworthiness of Stream. Elixir said it held full $1 redemption rights for its loan position, but the Stream team said payments were on hold until lawyers determine creditors’ priorities. This uncertainty leaves lenders and users waiting for more clarity in an already fragile environment.
Another affected token is Treeve’s scUSD, which features complex exposure across multiple layers of collateralized lending. Its backing involves staked veUSD and scUSD, much of which is rehypothecated, i.e. reused as collateral, to Mithras Finance. Currently, around 92% of Mithra’s scUSD (around $13 million) is borrowed against xUSD collateral on lending protocols such as Silo and Euler. These interconnected layers highlight how stress on one protocol can ripple out into the broader DeFi ecosystem.
It’s a huge loss. It is unclear how this will be settled between xUSD/xBTC/xETH holders and lenders against these tokens, so let’s review all stablecoins/vaults that have (in)direct exposure to Stream.
As far as we can tell, these stablecoins have indirect exposure:
The elixir…– IGAM 🌱 (@yieldsandmore) November 4, 2025
Although these examples are among the most visible, other safes may also be affected. Total debt across various lending platforms tied to Stream assets is estimated at $285 million, excluding indirect exposure via other stablecoins. Among the largest custodians involved are TelosC ($123.6 million), Elixir ($68 million), and MEV Capital ($25.4 million).
Lending Protocols Face Growing Pressure
Several key DeFi lending platforms – Euler, Silo, Morpho and Gearbox – feature exposure to xUSD, xBTC or xETH. On Euler alone, TelosC-backed marketplaces hold nearly $30 million in borrowed assets across the Ethereum and Plasma networks. Silo’s Avalanche Markets add another $12 million in debt tied to xUSD and xBTC, while Morpho’s Elixir Market has $68 million in borrowed USDC. Each of these platforms relies on collateralized lending, where the funds borrowed depend on the value of the pledged tokens like xUSD. When these tokens lose value or liquidity, the entire structure comes under strain.
Yesterday, an external fund manager overseeing the Stream funds revealed the loss of approximately $93 million in assets from the Stream fund.
In response, Stream is hiring Keith Miller and Joseph Cutler of the law firm Perkins Coie LLP, to lead a comprehensive study…
– Flux Finance (@StreamDefi) November 4, 2025
The Stream Finance crisis highlights a recurring theme in DeFi: transparency and risk management often lag behind innovation. Complex remortgage loops and leverage make it difficult for investors to assess true exposure until it is too late. According to DefiLlama, the total value locked (TVL) in DeFi fell by more than 5% within 48 hours of the event.
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