Collateral Damage from Stream Finance Hack Estimated at $285 Million

The attack on the DeFi protocol Stream Finance could result in collateral losses amounting to approximately $285 million, affecting collateral and lending positions. This conclusion was reached by analysts at YieldsAndMore (YAM).
On November 4, the platform suspended operations following a $93 million hack. The incident caused the Staked Stream USD (xUSD) token to lose its peg, plummeting from $1.3 to $0.3.

“This is a colossal loss. It is unclear how issues between xUSD/xBTC/xETH holders and lenders using these tokens will be resolved,” noted YAM.

According to researchers, the collapse of xUSD affected several “stablecoins” and treasuries. Among the stablecoins, two projects could be impacted:

• deUSD: The token issuer Elixir provides Stream with a loan of 68 million USDC. This amount constitutes 65% of deUSD’s collateral. Stream’s main wallet uses these funds as collateral for xUSD. Elixir claims to have “full redemption rights at $1 from Stream within the credit position.” However, the hacked protocol’s team cannot repay the funds “until lawyers determine who owes what.”
• scUSD from Treeve: eliteRingsScUSD is backed by veUSD → veUSD is backed by stkscUSD → stkscUSD is backed by scUSD, which are in a “collateral loop” on the Mithras, Silo, and Euler platforms backed by xUSD.

Stream Finance’s total debt of $285 million to DeFi lenders is distributed across the following platforms:

• TelosC — $123.6 million;
• Elixir (in question) — $68 million;
• MEV Capital — $25.4 million;
• Varlamore — $19.1 million;
• Re7 — $14.2 million;
• Enclabs — $2.5 million;
• Mithras — $2.3 million;
• TiD — $0.3 million;
• Invariant Group — $720,000.

Also at risk are “synthetic” tokens xUSD, xBTC, and xETH. They are used as collateral on Euler, Silo, Morpho, and Sonic.

“The picture is still incomplete. We expect more affected treasuries to be identified as positions are closed and credit contracts are reviewed,” noted YAM.