Decentralized finance platform Elixir has taken the drastic step of suspending its synthetic stablecoin, deUSD, following a significant financial setback affecting competitor Stream Finance. Stream halted withdrawals earlier this week after a substantial loss was disclosed by an external fund manager, triggering ripple effects across various DeFi protocols. 80% of deUSD holders have been successfully redeemed by Elixir, resulting in the token’s depegging from the US dollar to just 1.5 cents per unit as per CoinGecko data. Stream Finance, which used deUSD to stabilize its own Staked Stream USD (XUSD) stablecoin, faced a major liquidity crisis after the loss was revealed. This ultimately forced Elixir to engage other decentralized lenders like Euler, Morpho, and Compound to ensure full repayment of deUSD holders, despite a lack of response from Stream regarding their loan repayments. Elixir took action to mitigate potential further losses by disabling deUSD withdrawals, aiming to prevent any liquidation strategies.