When Trust Breaks: A Look at Stream Finance's Big Oops

A Devastating Day for Stream Finance

Stream Finance had a really bad day. A fund manager they trusted lost a huge $93 million. That's a lot of money! This mistake caused a big problem for their stablecoin, xUSD. Stablecoins are supposed to stay at $1, but xUSD dropped to just $0.26. That's a 77% drop! Not good.

Withdrawals and Deposits Halted

Because of this, Stream Finance had to stop all withdrawals and deposits. They're working with lawyers to figure out what happened. They're also trying to get their money back. But it's not easy. Other companies that lent money to Stream are also in trouble. About $285 million is at risk. That's a lot of money!

A Warning Sign Ignored

This isn't the first time something like this has happened. A trader named Cbb0fe warned about Stream's risky moves. They were borrowing way more than they had. This is like spending money you don't have. It's risky business.

Secret Fund and Lack of Transparency

Stream Finance also had a secret fund. They called it an "insurance fund". But some people think they weren't honest about it. They kept 60% of the profits for themselves. That's not fair! Stream says they wanted to use the money for insurance, but they weren't clear about it.

Elixir Demands Repayment

One of the biggest lenders, Elixir, is trying to get their money back. They want their $1 back for every $1 they lent. It's a mess. Stream Finance needs to fix this. But it's not going to be easy.