Elixir Protocol announced on November 6 that it has redeemed 80% of deUSD holders following significant losses incurred by Stream Finance. Stream Finance, which held approximately 90% of the deUSD supply, faced financial difficulties amounting to around $75 million in deUSD. This redemption move aims to protect the remaining deUSD holders by ensuring a 1:1 USDC redemption rate and marks a critical step in phasing out the troubled stablecoin from the market.
### Elixir Redeems 80% of deUSD Amid Stream’s $75M Debt Crisis
Elixir confirmed that it redeemed 80% of deUSD holders, excluding Stream Finance itself. This decision came in response to Stream’s financial turmoil and was designed to safeguard the interests of deUSD holders by allowing them to redeem their holdings at a 1:1 ratio with USDC.
In their official communication, Elixir stated:
“To keep our stakeholders informed, we will provide periodic updates as additional information becomes available regarding the redemption process.”
As part of this initiative, Elixir suspended both the minting and redemption of deUSD and began gradually phasing the stablecoin out of circulation. The company expressed confidence in recovering value proportionately for holders during this process.
Legal support for Stream’s situation involves Perkins Coie LLP, and Stream has paused withdrawals while engaging in detailed investigations to identify the cause and scope of the loss cascade. Meanwhile, community sentiment remains strong, with ongoing demands for improved risk disclosures as anticipation builds around Elixir’s recovery and winding-down strategies.
### Market Dynamics and DeFi Community Response
The deUSD collapse echoes previous DeFi stablecoin failures, such as the Terra/UST incident, highlighting systemic risks associated with insufficient collateralization and excessive leverage within decentralized finance protocols.
According to CoinMarketCap, Elixir’s deUSD currently trades at around $0.99, with a market capitalization and fully diluted market cap near $90.90 million. Despite this, trading volume has plummeted by 75.37%, dropping to approximately $17,849.
The capture and phase-out of deUSD mark significant developments in the cryptocurrency sector, showcasing both economic volatility and strategic recalibration efforts by protocol developers and stakeholders.
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This situation serves as an important case study on the vulnerabilities in DeFi stablecoins and underscores the need for transparency, risk management, and proactive measures to protect investors in rapidly evolving markets.
https://bitcoinethereumnews.com/tech/elixir-completes-major-deusd-redeem-amidst-stream-finance-crisis/
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