Decentralized finance protocol Elixir has announced the sunset of its synthetic stablecoin, deUSD, following severe ripple effects from Stream Finance’s $93 million loss earlier this week. In a series of updates on X, Elixir said it has been working “tirelessly over the previous 48 hours” and has “successfully processed redemptions of 80% of all deUSD holders thus far (not including Stream).”
Elixir has worked tirelessly over the previous 48 hours and has successfully processed redemptions of 80% of all deUSD holders thus far (not including Stream).
— Elixir (@elixir) November 6, 2025
As it stands now, Stream holds roughly 90% of the deUSD supply (~$75m), while Elixir holds a similar proportion of its…
Stream Finance halted withdrawals on November 4 after an external fund manager disclosed the $93 million loss, revealing a $285 million debt owed to several decentralized lending protocols. Of that amount, $68 million was owed specifically to Elixir.
The liquidity crisis quickly forced Elixir to act. The company confirmed that “as it stands now, Stream holds roughly 90% of the deUSD supply (~$75m), while Elixir holds a similar proportion of its remaining backing as a Morpho loan to Stream.”
Elixir turns off minting, redemption infrastructure
As part of the wind-down, Elixir said it has disabled the mint/redeem infrastructure for deUSD and will retire the asset permanently. “All remaining holders of deUSD and sdeUSD will be able to redeem for a dollar,” the project stated, adding that it has already taken a snapshot of all remaining balances.
To “protect the interest of these holders and remove any risk of Stream liquidating deUSD before repaying their loan,” Elixir said a claim page has gone live, where users can redeem their holdings in USDC.
The claim page is now live, access it via the link here: https://t.co/gd3KysZeAg
— Elixir (@elixir) November 7, 2025
Only use this official claim link. Any other links are scams.
The protocol emphasized that holders, including AMM liquidity providers and lenders on platforms such as Euler, Morpho, and Compound, will be able to claim “the full value of their position.” It also issued a warning:
“deUSD holds no value and the stablecoin has been sunset. Please do not buy or make investments into deUSD, including through AMMs.”
Market impact and knock-on effects
The decision to sunset deUSD follows a sharp depeg, with the stablecoin falling to 1.5 cents, according to CoinGecko data. The loss of peg coincided with Stream’s own solvency issues and its xUSD stablecoin dropping as low as $0.10.
Stream had previously borrowed deUSD to stabilize its Staked Stream USD (xUSD) token, but after the fund manager disclosed unexpected losses, the protocol was forced to pause user withdrawals and unwind its leveraged positions.
The turmoil spread to other DeFi projects as well, the collapse of Stream and its associated stablecoins triggered declines in related tokens, including Stable Labs’ USDX, which also suffered a sharp depeg.
Elixir’s next steps and cooperation with lenders
Despite winding down deUSD, Elixir maintains confidence that all redemptions will be honored fully. The protocol stated,
“We still believe this will be honored 1 for 1.”
Elixir is now coordinating with Euler, Morpho, Compound, and other curators to facilitate the liquidation of Stream’s positions and distribute repayments fairly.
“Given that Stream comprised of 99%+ of the lending positions (and has decided to not repay or close positions), we will work with Euler, Morpho, Compound and the curators moving forward to help distribute repayment of the Stream loan to liquidate these positions,” the protocol said.
Elixir also reassured users that any affected LPs in automated market maker (AMM) pools or lending markets “will be able to claim the full value of their position.”
End of an experiment in synthetic dollars
Launched in July 2024, deUSD was designed as a decentralized, overcollateralized synthetic stablecoin, aiming to rival Ethena Labs’ USDe. The token reached a market capitalization of roughly $150 million before its depeg this week.
The asset had gained traction across lending protocols and even as a collateral type for tokenized funds. But the collapse of its largest borrower, Stream Finance, dealt a significant blow to its stability and trust.
The deUSD wind-down marks another reminder of the risks tied to interconnected DeFi credit markets, where large-scale leverage and shared exposure can quickly cascade across projects.
With deUSD now officially sunset, Elixir says its focus is on ensuring all holders are made whole through USDC redemptions and on completing the unwinding of its loan positions with Stream.
The team plans to share additional follow-up updates related to the claims process and liquidation status later this week.
Roman Zaika
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