Analysts Map $285M in DeFi Exposure Following Stream Finance’s $93M Collapse

Web of interconnected loans and collateral reveals deeper systemic risks in decentralized finance

Independent analysts have traced more than $285 million in potential exposure across the decentralized finance (DeFi) ecosystem following Stream Finance’s $93 million loss, highlighting how interconnected lending markets are amplifying risk across multiple blockchains.

The breakdown, released by YieldsAndMore (YAM) — a network of DeFi researchers and onchain analysts — shows Stream’s liabilities spread across at least seven networks, implicating major counterparties such as Elixir, MEV Capital, Varlamore, TelosC, and Re7 Labs.

According to YAM’s data, Stream’s synthetic assets — xUSD, xBTC, and xETH — were rehypothecated across protocols like Euler, Morpho, Silo, and Sonic, creating a layered web of interdependencies that could magnify contagion if redemptions fail.

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

YAM’s preliminary mapping lists TelosC ($123.6M), Elixir ($68M), and MEV Capital ($25.4M) as the largest entities linked to Stream-related lending activity. Elixir’s deUSD stablecoin reportedly lent $68 million in USDC to Stream — accounting for nearly 65% of its total reserves. Despite Elixir’s claim that it retains “full redemption rights at $1,” YAM reports that Stream’s repayments are on hold pending legal review.

Other protocols, including Treeve’s scUSD, appear entangled through multi-layered lending loops involving Mithras, Silo, and Euler, suggesting further ripple effects as positions unwind.

“This map is still incomplete,” YAM noted. “We expect more affected vaults to surface once lending contracts are fully audited.”

The Stream incident follows a turbulent week for decentralized finance, marked by the $128 million Balancer exploit and Moonwell’s $1 million oracle attack on Base and Optimism networks. Combined, these three events have wiped out over $220 million in total value, underscoring the fragility of DeFi’s interconnected liquidity systems.

#CertiKInsight 🚨

We have detected multiple exploit transactions on @MoonwellDeFi lending contract.

The exploiter was able to repeatedly borrow over 20 wstETH with only ~0.02 wrstETH flashloaned and deposited due to the faulty oracle that returns wrst price of ~5.8M$ and… pic.twitter.com/130RHsUe4J

— CertiK Alert (@CertiKAlert) November 4, 2025

Collateral Mismatch Sparks Liquidity Crisis

The crisis began when Stream Finance halted all deposits and withdrawals after disclosing a $93 million shortfall across its synthetic asset markets. The protocol issues tokenized assets such as xUSD, xBTC, and xETH, each backed by onchain collateral pegged to real-world assets.

Stream’s model relies heavily on overcollateralization and rehypothecation, mechanisms meant to improve capital efficiency but which can amplify systemic risk. A drop in collateral value or a failure in one lending loop can trigger cascading liquidations throughout connected protocols.

While Stream has not yet released a full post-mortem, early analysis points to collateral devaluation and liquidity mismatches between its xAssets and their onchain counterparts. It remains unclear whether user funds will be recovered or if insurance mechanisms are in place.

Disclaimer

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