The DeFi ecosystem continues to see more incidents at the beginning of November, with more protocols totalling $222 million in losses. A higher potential exposure was recently analyzed.
After the Balancer DeFi protocol’s exploit on November 3, Stream Finance also disclosed the loss of approximately $93 million in Stream fund assets.
DeFi analysts highlighted that following the incident, the overall debt to lenders on various lending markets is almost $285 million.
Stream Finance is a DeFi app specialized in vault-style strategies, including yield farming, delta-neutral strategies, and market making for users to earn rewards on their crypto. The app has a collateralized stablecoin, Staked Stream USD (XUSD). Following the November 3 events, the app froze deposits and withdrawals, and XUSD depegged.
XUSD is now down by over 73% in the past 24 hours, trading at approximately $0.32, after reaching $0.24 earlier.
Here’s what happened, according to Stream Finance and DeFi analysts.
Stream Finance’s Statement on November 4
Today, Stream Finance shared a statement on X, revealing that on November 3, an external fund manager that was overseeing Stream funds disclosed the loss of approximately $93 million in Stream fund assets.
The team said that, as a response, the project is working with Keith Miller and Joseph Cutler of law firm Perkins Coie LLP to investigate the incident.
Stream Finance said that they’re actively withdrawing all liquid assets and expect to complete the process soon, promissing to deliver periodic updates. The project also suspended all withdrawals and deposits. This is the only official statement from Stream Finance.
DeFi Analysts Highlight Almost $285 Million in Debt to Lenders
Yields and More (known as YAM on X) addressed the latest events, saying that there are massive losses involved, and it’s not yet clear how this will be settled in between XUSD/XBTC/XETH holders and lenders against these tokens.
The team at YAM analysed all stablecoins/vaults that are directly or indirectly linked to Stream, revealing an overall debt to lenders on various lending platforms of almost $285 million, excluding indirect exposure.
They highlighted the following stablecoins with indirect exposure to Stream:
- Elixir’s deUSD – Elixir is lending $68 million to Stream, representing 65% of deUSD backing, and the main Stream wallet is borrowing these funds against XUSD collateral.
- Treeve’s scUSD – eliteRingsScUSD is backed by veUSD, and veUSD is backed by locked stkscUSD; stkscUSD is backed by staked scUSD, and that specific scUSD is rehypothecated to Mithras; currently, about $13 million in Mithras scUSD is borrowed by XUSD collateral on Silo and Euler.
YAM says that there are likely more stables and vaults affected, also offering a list of markets that lend to XUSD/XBTC/XETH directly. Assets tied to the three tokens were rehypothecated across multiple protocols, including Euler, Silo, Morpho, Gearbox, and Enclabs.
The largest curators linked to Stream-backed lending markets include TelosC with over $123 million, Elixir with more than $68 million, MEV Capital with more than $25 million, and others.
This is a massive loss. It’s unclear how this will be settled in between xUSD/xBTC/xETH holders and lenders against these tokens, so let’s go over all stablecoins/vaults that have (in)direct exposure to Stream.
Best we can tell, these stablecoins have indirect exposure:
Elixir’s… https://t.co/QEPsWf1fM2— YAM 🌱 (@yieldsandmore) November 4, 2025
What Really Happened?
The data provided by YAM builds a clearer image of what happened after Stream suspended all withdrawals and deposits after announcing the $93 million loss across its synthetic asset markets.
Stream Finance is operating a synthetic asset protocol that issues XUSD, XBTC, and XETH. Each asset is backed by onchain collateral like BTC, ETH or stablecoins to mint xAssets, which can be traded, staked, or used as collateral on other DeFi platforms.
This model relies on overcollateralization and rehypothecation to maximize capital efficiency. Rehypothecation refers to the reuse of collateral across multiple lending loops.
This design has the following effects:
- Boosts yield
- Increases systemic risk – if xAsset collateral values fall or counterparties fail, losses can cascade via a contagion to the interconnected protocols that rely on them
The analysis from YAM reveals:
- A liquidity mismatch
- Collateral devaluation among Stream’s xAssets, which were re-lent across other protocols
The widespread rehypothecation involved the fact that the failure of one vault could become contagious to others as well, leading to uncertainty among creditors about recovery.
The unfortunate event added more problems to the DeFi ecosystem, which saw a bumpy November start.
DeFi Protocols Lost Over $222 Million
The Stream Finance event follows another incident in the DeFi ecosystem marked by Balancer’s exploit on November 3. While SpotOnChain highlighted losses of over $116 million, blockchain security firm Peckshield estimated losses of over $128 million in assets drained from Balancer’s vaults.
Also, there was an oracle manipulation attack on Moonwell DeFi, which led to $1 million being drained from lending pools on Base and Optimism, as revealed by the security firm CertiK.
Together with the Stream Finance issue, these three events totalled approximately $222 million erased from DeFi protocols at the beginning of November.
All these point out the strong link between liquidity and collateral systems across chains.
The general crypto market is experiencing high volatilty, and it’s down by over 4% in 24 hours. However, BTC is showing slight signs of an upward reversal, climbing above $104,000 after an earlier drop below the level.
