DeFi’s High-Stakes Rehypothecation: $284M Turmoil Reveals Deep-Rooted Systemic Weakness
- Stream Finance's collapse exposed $284M in DeFi loans and stablecoin risks via rehypothecated collateral across platforms like Euler and Silo. - Key counterparties include Elixir ($68M), TelosC ($123.6M), and MEV Capital ($25.4M), highlighting systemic fragility in interconnected DeFi markets. - xUSD stablecoin faces liquidity crunches as rehypothecated assets amplify contagion risks across Arbitrum and Plume chains. - Recent exploits at Balancer and Moonwell erased $222M, prompting calls for regulatory
DeFi experts have identified $284 million in outstanding loans and stablecoin liabilities linked to the downfall of Stream Finance, a synthetic asset platform that reported a $93 million deficit in early November. The interconnected structure of decentralized finance has heightened vulnerabilities, as assets associated with Stream's
Stream Finance, which enables users to mint synthetic assets using on-chain collateral, has halted all deposits and withdrawals while Perkins Coie LLP leads an ongoing investigation, according to
The root of the systemic threat lies in the repeated lending of Stream's collateral across multiple protocols to enhance returns. For instance, Elixir’s deUSD stablecoin provided $68 million in
The Stream Finance debacle follows a volatile week for DeFi, which also saw a $128 million breach at
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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