DeFi Multiple Flash Loan Attacks Cast a Shadow, More Crises May Lurk Beneath the Surface

BlockBeats News, November 7th, concerns about a recent DeFi cascading liquidation causing a further liquidity crisis have been spreading in the crypto community. On November 3rd, Stream Finance suddenly announced a suspension of deposits and withdrawals, bringing a storm sweeping through the DeFi world to a climax. One of its external fund managers was liquidated during the market's intense volatility on October 11th, resulting in approximately $93 million in fund asset losses. The entire DeFi ecosystem may face a systemic crisis with an $8 billion Total Value Locked (TVL), with only around $100 million in losses reported so far.

The DeFi liquidity protocol Elixir has encountered a $68 million risk exposure due to this incident, while Morpho Cofounder responded to a part of the liquidity pool as "insufficient liquidity," stating it is not a systemic vulnerability. Yield stablecoins experienced the largest single-week outflow since the Luna thunder, totaling $1 billion, and the market capitalization of the star stablecoin product USDe issued by Ethena Labs has also dropped below $9 billion, decreasing by about 45% in the past month. To address the liquidity crisis, Compound has temporarily paused several stablecoin borrowing markets on Ethereum, and the stablecoin USDX under Stables Labs plummeted to $0.314 in the early hours of today. The crisis brought about by asset leverage cascade and opaque management may only be the tip of the iceberg. For more detailed coverage, see "DeFi's Potential $80 Billion Thunder, Only $1 Billion Exploded So Far".