DeFi Contagion: $1B Stablecoin Outflow After $93M Stream Finance Hack

Just after the $128 million Balancer exploit, the first major domino has fallen, triggering a market-wide liquidity panic.

Stream Finance, a yield-generation protocol, confirmed a $93 million loss in user funds following a targeted exploit. In response, the team has suspended all deposits and withdrawals.

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The market’s reaction was instant.

Stream’s native stablecoin, xUSD, lost its peg and collapsed to zero, wiping out holders overnight.

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The Bank Run Has Begun

The collapse of xUSD has ignited a full-blown bank run across interconnected DeFi protocols. On-chain data shows the largest weekly stablecoin outflow since the Terra/LUNA crash, with $1 billion exiting the sector in less than 48 hours.

Protocols that had exposure to Stream’s “looping” yield strategies are now facing cascading liquidity crises:

• Coinshift’s csUSDL: Total Value Locked (TVL) down 95%.
• Elixir’s deUSD and sdeUSD: severe liquidity drain as users race for exits.

What began with the Balancer exploit was the spark. The hidden leverage between these protocols is the gunpowder. And now, the DeFi market is watching that powder ignite - live, on-chain.