Elixir Completes Major deUSD Redeem Amidst Stream Finance Crisis

Elixir Protocol announced on November 6 that it has redeemed 80% of deUSD holders after Stream Finance’s losses, which left Stream holding 90% of the deUSD supply.

This move aims to safeguard remaining deUSD holders by ensuring a 1:1 USDC redemption and signifies a crucial phasing out of the troubled stablecoin from the market.

Elixir Redeems 80% deUSD Amid Stream’s $75M Debt Crisis

Elixir announced that it has redeemed 80% of deUSD holders, excluding Stream. This action resulted from the financial difficulties faced by Stream, which holds approximately $75 million in deUSD. Amid Stream’s financial turmoil, Elixir took steps to protect deUSD holders by ensuring they could redeem their deUSD holdings at a 1:1 ratio with USDC. As noted in their official communication, “To keep our stakeholders informed, we will provide periodic updates as additional information becomes available regarding the redemption process.” This initiative involved suspending the minting and redemption of deUSD and gradually phasing it out of the market.

The official announcements from Elixir emphasized their confidence in recovering value proportionately. With Perkins Coie LLP involved, Stream pauses withdrawals and engages in detailed investigations to understand the loss cascade. Community sentiment remains active, demanding better risk disclosures as anticipation surrounds Elixir’s subsequent recovery and winding-down strategies.

Market Dynamics and DeFi Community Response to deUSD Withdrawal

Did you know? The deUSD collapse echoes past DeFi stablecoin failures like Terra/UST, showcasing the systemic risks posed by insufficient collateralization and excessive leverage within DeFi protocols.

CoinMarketCap reports Elixir’s deUSD currently trades at $0.99, maintaining a market cap and fully diluted market cap of approximately $90.90 million. With a trading volume dropping 75.37% to around $17,849, the deUSD capture and phase-out represent substantial shifts in the cryptocurrency landscape, illustrating both economic volatility and strategic recalibration efforts.

According to analysis by CoinCu, Elixir’s handling of deUSD’s decline could influence future stablecoin protocols, highlighting the necessity for robust collateral management. It also stresses potential regulatory scrutiny as DeFi investments draw heightened attention, aiming for more secure and transparent measures within the crypto space.