The damage extends far beyond the stream itself, as some stablecoins and lending vaults show signs of indirect damage.
While the situation remains fluid, the numbers already show that debt and counterparty risk are deeply intertwined.
DeFi stablecoins caught in the crossfire
According to YAM, one of the projects most at risk appears to be Elixir’s deUSD. This is a stablecoin that has lent Stream Finance $68 million in USDC, which is approximately 65% of Stream Finance’s total reserves. The main Stream wallet borrows these funds using xUSD as collateral, which means Elixir’s stability is directly related to Stream’s solvency. Elixir said it had full redemption rights for the loan position at $1, but Stream’s team said payments would be withheld until lawyers determine creditor priority. This uncertainty forces lenders and customers to wait for clarity in an already fragile environment.
Another affected token is Treeve’s scUSD. It has complex exposure through multiple tiers of collateralized financing. Its backing includes veUSD and staked scUSD, much of which will be rehypothesized, or reused as collateral, by Mithras Finance. Currently, approximately 92% of Mithras scUSD (approximately $13 million) is borrowed with xUSD as collateral in lending protocols such as Silo and Euler. These interconnected layers highlight how stress in one protocol cascades across the broader DeFi ecosystem.
This is a huge loss. It is unclear how this will be resolved between xUSD/xBTC/xETH holders and lenders for these tokens, so let’s take a look at all the stablecoins/vaults that are directly (indirectly) exposed to Stream.
As far as we know, these stablecoins have indirect exposure.
Elixir’s…— Yam🌱 (@yieldsandmore) November 4, 2025
These examples are among the most notable, but other vaults may also be affected. Total debt across various lending platforms related to Stream assets is estimated at $285 million, excluding indirect exposure through other stablecoins. The largest curators involved include TelosC ($123.6 million), Elixir ($68 million), and MEV Capital ($25.4 million).
Lending Protocol Face Mount Pressure
Several major DeFi lending platforms (Euler, Silo, Morpho, Gearbox) indicate exposure to xUSD, xBTC, or xETH. At Euler alone, the TelosC-backed marketplace holds nearly $30 million in borrowed assets across the Ethereum and Plasma networks. Silo’s Avalanche Market adds another $12 million in debt related to xUSD and xBTC, while Morpho’s Elixir Market owes $68 million in USDC. Each of these platforms relies on collateralized lending, and the borrowed funds depend on the value of the collateralized token, such as xUSD. If these tokens lose value or liquidity, the entire structure will be under stress.
Yesterday, the external fund manager that oversees the Stream Fund disclosed a loss of approximately $93 million in Stream Fund assets.
In response, Stream is collaborating with law firm Perkins Coie LLP’s Keith Miller and Joseph Cutler to lead a comprehensive plan.
— Stream Finance (@StreamDefi) November 4, 2025
The stream finance crisis has highlighted a recurring theme in DeFi: transparency and risk management often lag behind innovation. Complex rehypothecation loops and leverage make it difficult for investors to assess their true exposure until it is too late. According to DefiLlama, DeFi’s Total Value Locked (TVL) decreased by more than 5% in the 48 hours following the event.
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